United States District Court, D. Delaware
D. Smith II, Michael J. Flynn, MORRIS, NICHOLS, ARSHT &
TUNNELL LLP, Wilmington, DE; Bradford J. Badke, Sona De,
Ching-Lee Fukuda, Caroline Bercier, Julie L. Hsia, SIDLEY
AUSTIN LLP, New York, NY; Kevin O'Brien, Sue Wang,
Saurabh Prabhakar, SIDLEY AUSTIN LLP, San Francisco, CA; Gwen
Hochman Stewart, Grace L.W. St. Vincent, SIDLEY AUSTIN LLP,
Chicago, IL. Attorneys for Plaintiff.
Frederick L. Cottrell, III, Kelly E. Farnan, Nicole K. Pedi,
RICHARDS, LAYTON & FINGER, P.A., Wilmington, DE; Edgar H.
Haug, Angus Chen, Porter F. Fleming, Richard F. Kurz, Erika
V. Selli, Elizabeth Murphy, HAUG PARTNERS LLP, New York, NY.
Attorneys for Defendants.
ANDREWS, U.S. DISTRICT JUDGE.
before the Court are Plaintiffs motion for attorneys'
fees (D.I. 420) and Defendants' related motion to strike
(D.I. 473), and Plaintiffs motion pursuant to Federal Rule of
Civil Procedure 59 (D.I. 437). I have reviewed the
parties' briefing. (D.I. 421, 438, 440, 450, 457, 459,
473, 480, 481). For the following reasons, Plaintiffs motion
for attorneys' fees is DENIED,
Defendants' motion to strike is
DISMISSED as moot, and Plaintiffs motion
pursuant to Rule 59 is GRANTED with respect
to supplemental damages, pre-judgment interest, and
post-judgment interest, and DENIED with
respect to indirect and willful infringement.
December 5, 2016, Plaintiff Bayer Healthcare LLC filed suit
against Defendants Baxalta Inc. and Baxalta U.S. Inc.
(collectively, "Baxalta") and Nektar Therapeutics
for infringement of U.S. Patent No. 9, 364, 520 ("the
'520 patent"). (D.I. 1). I held a jury trial from
January 25 to February 1, 2019. The jury found each asserted
claim valid and infringed and that Bayer was entitled to
$155, 190, 264 in damages, based on a 17.78% royalty rate and
$872, 836, 128 royalty base. (Id.). I granted
judgment as a matter of law with respect to induced,
contributory, and willful infringement by Nektar, and willful
infringement by Baxalta. Tr. at 1134:24-1135:3; (D.I. 412
¶¶ 2-3). Bayer has no remaining claims against
court in exceptional cases may award reasonable attorney fees
to the prevailing party." 35 U.S.C. § 285.
"[A]n 'exceptional' case is simply one that
stands out from others with respect to the substantive
strength of a party's litigating position (considering
both the governing law and the facts of the case) or the
unreasonable manner in which the case was litigated. District
courts may determine whether a case is 'exceptional'
in the case-by-case exercise of their discretion, considering
the totality of the circumstances." Octane Fitness,
LLC v. ICON Health & Fitness, Inc., 572 U.S. 545,
554 (2014). In assessing the totality of the circumstances,
the Court may consider "frivolousness, motivation,
objective unreasonableness (both in the factual and legal
components of the case) and the need in particular
circumstances to advance considerations of compensation and
deterrence." Id. at 554 n.6. The party seeking
fees must show that a case is exceptional by a preponderance
of the evidence. Id. at 557-58.
following reasons, Bayer's motion for attorneys' fees
is DENIED. Thus, Baxalta's motion to
strike a portion of Bayer's corresponding reply brief is
DISMISSED as moot.
Fair Estimate of Fees
argues that Bayer's motion is barred because it fails to
provide a fee estimate as required under Federal Rule of
Civil Procedure 54(d). (D.I. 440 at 2-3). Rule
54(d)(2)(B)(iii) provides that a motion for attorney's
fees must, among other things, "state the amount sought
or provide a fair estimate of it."
time to provide a fee estimate has not run. (See
D.I. 457 at 9). Rule 54(d)(2)(B)(i) requires a motion for
fees to be filed within "14 days after the entry of
judgment." Rule 54(a) defines "judgment" as
"a decree and any order from which an appeal lies."
Where there are multiple claims:
[A]ny order or other decision, however designated, that
adjudicates fewer than all the claims or the rights and
liabilities of fewer than all the parties does not end the
action as to any of the claims or parties and may be revised
at any time before the entry of a judgment adjudicating all
the claims and all the parties' rights and liabilities.
Fed. R. Civ. P. 54(b). The judgment entered on February 8,
2019 did not adjudicate the parties' post-trial claims
under Rules 50(b) and 59(a). Therefore, I have yet to enter a
final judgment that would trigger the deadline on Bayer's
motion for fees. See Fed. R. App. P. 4(a)(4)(A)(i),
(v). Had I granted Bayer's present motion, Bayer would
have had ample opportunity to provide an accounting of fees
consistent with Rule 54(d). (D.I. 457 at 10).
Violation of the Markman Order
argues that Baxalta repeatedly disregarded the
Markman order, which indicates the unreasonable
manner in which Baxalta litigated this case. (D.I. 421 at
points to several actions leading up to trial. (Id.
at 4-6). During claim construction, Bayer relied on the
phrase "[a]ny conjugation with [amines] is random"
in the prosecution history to argue that the patentees
defined any conjugation with amines as random. I rejected
that theory in my Markman opinion, but in the
context of finding no clear and unmistakable disclaimer.
(D.I. 195 at 16). Baxalta raised a variation of the same
argument on summary judgment. I clarified that the argument
failed on claim construction and again on summary judgment
because Baxalta was reading the phrase out of context. (D.I.
319 at 7-8). Although Baxalta raised the same argument on
motions in limine, those motions were prepared and
exchanged before I issued the summary judgment opinion. (D.I.
440 at 5). I explicitly stated in my order on the motions
in limine that "Defendants should not raise
this argument again in their filings or at trial." (D.I.
335 at 2).
not think Baxalta's pretrial behavior amounts to
"unreasonable" litigation conduct. I did not
clearly reject Baxalta's interpretation of my claim
construction until resolving the motions for summary
judgment. (See D.I. 440 at 4-5). Therefore, the fact
that Baxalta continued to raise the "[a]ny
conjugation" argument after claim construction does not
make this an exceptional case.
also argues that Baxalta presented evidence at trial based on
the rejected claim construction argument. (D.I. 421 at 7-8).
Bayer asserts that Baxalta tried to elicit testimony from
'520 patent inventor Dr. Pan that random conjugation is
equivalent to amine pegylation. (D.I. 421 at 7). I disagree.
Dr. Pan was a fact witness. Baxalta focused on the pegylation
done by Nektar and Bayer that Dr. Pan was involved in, not
pegylation generally. E.g., Tr. at 959:16-960:1,
969:12-970:5. I overruled Bayer's objection that
Baxalta was "coming very close to violating" the
Markman order. Id. at 980:6-982:5.
Bayer asserts that Baxalta's experts, Drs. Walensky and
Zalipsky, testified contrary to the Markman order.
(D.I. 421 at 7-8). Bayer did not object to any of the cited
testimony at trial. Regardless, I do not think either expert
violated the Markman order. Both discussed the
lysine pegylation described in the '520 patent, which the
patent characterizes as a "random approach." Tr. at
1041:7-17, 1199:5-10. Dr. Walensky also discussed the lysine
pegylation used to make Adynovate and determined that it was
random. Id. at 1047:11-1048:7, 1058:13-1059:8.
Neither expert opined on amine conjugation generally. Rather,
both limited their testimony to discussion of particular
reactions described in the '520 patent or in making
I do not think Baxalta violated the Markman order.
Baxalta was sometimes "close to the line," but that
does not make its litigation conduct unreasonable.
Bad Faith in Disclosure of Supplemental Financials
originally produced worldwide financials showing about 80%
profits. (D.I. 421 at 9). About two months after the close of
fact discovery, Baxalta produced supplemental financials
showing lower profits and including additional costs. (D.I.
440 at 7).
addressed the late-disclosed financials in relation to
Bayer's motion to strike. (D.I. 362 at 4). I found that
Baxalta engaged in bad faith or willfulness in failing to
disclose the supplemental financials during fact discovery,
but that, on balance, the Pennypack factors weighed
against exclusion. (Id. at 4-5). I also noted that
it was unclear if the supplemental financials were
"litigation-inspired documents," as Bayer had
suggested. (Id. at 6).
continues to argue that Baxalta falsified the supplemental
financials. (D.I. 421 at 9-10). I do not think Bayer's
argument is supported by the record. The original profit
figures were based on the "cost of goods"
("COGs"), which included manufacturing costs and
royalties. Tr. at 773:18-774:3. Baxalta's Rule 30(b)(6)
witness, Mr. Hackel, testified that "other costs of
sales" ("OCOS") were not included because
Baxalta did not track those costs on the product level.
Id. at 717:15-25. Baxalta asserts that the
supplemental financials incorporated additional costs
obtained from its parent company, Shire. (D.I. 440 at 7).
Shire's employee, Mr. Dewan, testified that Shire keeps
such records on an internal system, which is accurate and
maintained in the ordinary course of business. Tr. at
1182:22-1184:10. There is no evidence that Baxalta altered or
falsified the Shire data when producing the supplemental
has only shown that Baxalta acted in bad faith by its late
disclosure of the supplemental financials. As discussed in my
order denying Bayer's motion to strike, Bayer was not
substantially prejudiced by the late disclosure and the
supplemental financials had a limited scope of relevance.
(D.I. 362 at ...