Case 1:16-cv-01221-LPS Document 160 Filed 07/06/20 Page 1 of 4 PageID #: 1319
`
`ANTHONY RAUCCI
`(302) 351-9392
`(302) 498-6201 FAX
`araucci@mnat.com
`
`M O R R I S , N I C H O L S , A R S H T & T U N N E L L L L P
`1201 NORTH MARKET STREET
`P.O. BOX 1347
`WILMINGTON, DELAWARE 19899-1347
`
`(302) 658-9200
`(302) 658-3989 FAX
`Redacted -- Public Version
`Original Filing Date: June 29, 2020
`Redacted Filing Date: July 6, 2020
`
`VIA ELECTRONIC FILING
`The Honorable Leonard P. Stark
`U.S. District Court for the District of Delaware
`844 North King Street
`Wilmington, DE 19801
`
`Re:
`
`Bayer HealthCare LLC, et al. v. Apotex Inc. et al.,
`C.A. No. 16-1221-LPS (Consolidated)
`
`Dear Chief Judge Stark:
`
`Plaintiff Bayer respectfully moves to strike Defendant Apotex’s belated non-enablement
`defense regarding U.S. Patent No. 9,458,107, which Apotex first raised just three days before the
`close of expert discovery. Apotex’s untimely disclosure fails to satisfy any of the Pennypack
`factors, including because (1) as an invalidity theory for which Apotex cannot adduce any
`evidence in its case-in-chief, it cannot survive a Rule 52(c) motion for judgment, and (2) the
`alleged new “evidence” Apotex cites does not come close to supporting its theory, rendering it
`futile. Even if Apotex could overcome such defects, Bayer would be substantially prejudiced—
`both because it would need to take further discovery at this late juncture and because it would
`need to devote valuable trial time to respond. Apotex’s late-raised theory should be stricken.
`
`Apotex’s Untimely Non-Enablement Defense. On October 22, 2019, after watching its
`existing defenses crumble during expert discovery, Apotex announced for the first time that it
`wished to advance a non-enablement theory that the “asserted claims of the ’107 patent are
`invalid for lack of enablement because the specification fails to enable the full scope of the
`claims.” Haché E-Mail (Oct. 22, 2019) (Ex. A). At the time, the parties’ chemistry experts for
`the ’107 patent had already been deposed, and fact discovery had long since been closed.
`
`Apotex does not—and cannot—contend that its new non-enablement defense is based on
`any theory that Apotex disclosed in its expert reports, invalidity contentions, or interrogatory
`responses. Indeed, Apotex has represented that it does “not intend to submit any of its own
`expert evidence” on the issue. Soderstrom E-mail (Oct. 25, 2019) (Ex. B). Rather, Apotex
`asserts that its belated defense “is borne directly from, and because of” the deposition testimony
`of Dr. Allan Myerson, Bayer’s expert chemist for the ’107 patent. D.I. 153, at 2. According to
`Apotex, Dr. Myerson purportedly admitted at his deposition that the asserted claims were invalid
`for lack of enablement because he testified that (1) the specification did not expressly state
`whether the synthesis method described in the patent could be used to make regorafenib
`comprising “1 ppm versus 100 ppm’s [sic]” (0.0001% to 0.01%) of the claimed impurities; and
`
`

`

`Case 1:16-cv-01221-LPS Document 160 Filed 07/06/20 Page 2 of 4 PageID #: 1320
`
`June 29, 2020
`Page 2
`
`(2) the POSA would not have “reasonably expected” to reduce the amount of the claimed
`impurities in regorafenib from 1,000 ppm—ten times the upper limit of the claim—to 100
`ppm—the upper limit of the claim (i.e., from 0.1% to 0.01%). Apotex Stmt. of Fact ¶¶ 179-80
`(Ex. C); Myerson Dep. Tr. 80:13-18, 81:17-82:6, 82:13-20, 83:2-17, 83:22-85:14. (Ex. D).1
`
`Here, the factors set forth in Meyers v. Pennypack Woods Home Ownership Ass’n, 559
`F.2d 894, 904-05 (3d Cir. 1977), warrant that Apotex’s non-enablement defense be stricken.
`
`Importance of the Excluded Evidence. The only factor that could in theory justify
`permitting Apotex to proceed with its new non-enablement defense—the importance of the
`excluded evidence—does not support that result. By Apotex’s own admission, Apotex’s defense
`“is borne directly from, and because of” Dr. Myerson’s deposition testimony. D.I. 153, at 2.
`However, under Third Circuit law, which applies here, Apotex cannot rely on Dr. Myerson’s
`testimony in its case-in-chief, because it is inadmissible hearsay. See Pfizer, Inc. v. Ranbaxy
`Labs., Ltd., 2005 WL 2296613, at *2 (D. Del. Sept. 20, 2005) (citing Kirk v. Raymark Indus.,
`Inc., 61 F.3d 147 (3d Cir. 1995)); Fed. R. Civ. P. 32. Absent any admissible affirmative
`evidence in its case-in-chief, Apotex’s defense is doomed to failure. See Fed. R. Civ. P. 52(c).
`
`Moreover, even if Apotex could rely on Dr. Myerson’s deposition testimony, it is plainly
`insufficient to prevail on non-enablement—i.e., the defense is futile. The asserted claims require
`that the compound or composition contain 0.0001% (1 ppm) to 0.01% (100 ppm) of certain
`impurities. To prove non-enablement, Apotex must do more than allege that the ’107 patent fails
`to disclose expressly how to achieve impurity levels of 100 ppm versus 1 ppm. It must prove
`that the patent fails to provide a “reasonable enablement of the scope of the range.” See AK Steel
`Corp. v. Sollac & Ugine, 344 F.3d 1234, 1244 (Fed. Cir. 2003). In the testimony Apotex cites,
`Dr. Myerson merely acknowledged that because the patent’s experimental examples did not
`report the final impurity amount, Ex. D, at 81:14-82:21, the patent did not expressly state what
`changes, if any, the POSA would need to make to the disclosed synthesis method to achieve
`impurity levels of “1 ppm versus 100 ppm.” Ex. C ¶ 179; Ex. D, at 81:17-82:6; 82:13-20.
`
`That testimony comes nowhere close to establishing that the POSA would need to make
`any changes to the disclosed synthesis method for the claims to be enabled—much less to
`proving that the POSA, armed with both the benefit of the patent and the POSA’s own
`“knowledge and skill,” could not practice the full scope of the claimed range without undue
`experimentation. N. Telecom Inc. v. Datapoint Corp., 908 F.2d 931, 941 (Fed. Cir. 1990).
`Indeed, Dr. Myerson could not have conceded—and plainly did not concede—that any
`experimentation was needed or that, if needed, such experimentation would have been undue.
`Because Apotex did not timely raised this non-enablement defense, Dr. Myerson had neither
`performed experiments, Ex. D, at 130:8-11, nor reviewed documents—such as materials from
`Bayer reflecting impurity levels achieved with the patent’s method—pertinent to the questions of
`whether and how much experimentation would be required to practice the claims using that
`method. Without such evidence, Apotex’s defense fails. See Alcon Research Ltd. v. Barr Labs.,
`Inc., 745 F.3d 1180, 1188-92 (Fed. Cir. 2014) (reversing non-enablement finding where the court
`compared only the claims to the relevant disclosures rather than determining whether
`
`1For consistency with Defendants’ proposed statement, Plaintiffs’ cite Dr. Myerson’s rough
`transcript. The final version is not materially different, and Plaintiffs will provide it, if needed.
`
`

`

`Case 1:16-cv-01221-LPS Document 160 Filed 07/06/20 Page 3 of 4 PageID #: 1321
`
`June 29, 2020
`Page 3
`
`experimentation would be “undue”).
`
`Apparently recognizing this deficiency, Apotex relies on Dr. Myerson’s non-obviousness
`opinions that the POSA, at the priority date, would not have “reasonably expected” to reduce the
`impurities from 1,000 ppm (above the claimed range) to 100 ppm (the upper bound of the range).
`Ex. C ¶ 180. However, as Dr. Myerson’s testimony and report demonstrate, those opinions
`addressed whether the POSA, in light of the prior art, and without the benefit of the patent’s
`teachings, would have “reasonably expected” to achieve the claimed inventions. Ex. D, at 83:2-
`17 (citing Myerson Rep. ¶ 85); Myerson Rep. ¶ 85 (Ex. E). That the POSA would consider the
`claims to be nonobvious says nothing about whether they are enabled—the latter, but not the
`former, concerns what the POSA could do with both the patent and the POSA’s own knowledge
`and skill. See Allergan, Inc. v. Sandoz Inc., 796 F.3d 1293, 1310 (Fed. Cir. 2015) (rejecting
`argument that “if the asserted claims are non-obvious, they cannot possibly be enabled”).
`
`Prejudice and Surprise. Bayer would be prejudiced if Apotex can pursue its theory.
`Although Apotex lacks any affirmative evidence to support its defense, Bayer would be required
`to respond—out of an abundance of caution. That would require Bayer to conduct further fact
`discovery that it had no reason to pursue before Apotex belatedly raised its defense. Given the
`pandemic and the impending trial date, that would impose a great burden on Bayer, as discussed
`below. Bayer also would need to devote a portion of its already-limited trial time to the issue if
`Apotex somehow survived a Rule 52 motion—including offering fact and expert testimony—
`thereby reducing Bayer’s time to address issues that actually were litigated during discovery.
`
`Ability to Cure and Extent of Trial Disruption. Permitting Apotex’s new theory requires
`Bayer to collect, review, and produce additional documents and make additional witnesses
`available for deposition in response. While accomplishing these tasks on an expedited schedule
`would be burdensome even in normal circumstances, they are especially challenging given the
`ongoing pandemic. For example, Bayer’s potential fact witnesses reside in Germany and are not
`native English speakers. Bayer’s counsel—who has never met some of these potential witnesses
`in person—would need to conduct any meetings or depositions with these witnesses remotely
`and may need to rely on interpreters to interview them and to facilitate their testimony. Those
`burdens are wholly disproportionate to any benefit Apotex might obtain from maintaining this
`baseless defense. See Intellectual Ventures I LLC v. AT&T Mobility LLC, C.A. No. 13-1668-
`LPS, 2017 WL 658469, at *3 (D. Del. Feb. 14, 2017) (striking infringement contentions that
`failed to conform to claim construction, citing opposing party’s inability to receive notice).
`
`Bad Faith and Willfulness. Apotex cannot argue credibly that it discovered its new
`defense at Dr. Myerson’s deposition unexpectedly. To the contrary, Apotex appears to have
`entered the deposition with the theory in mind, failed to disclose it, and intentionally elicited the
`inadequate testimony on which it now relies to assert an argument it knew was not in the case.
`The alternative explanation—that Apotex fortuitously happened to ask questions at an expert
`deposition directed to enablement and adduce statements that it now claims provide the only
`support for an invalidity theory it chose not to advance for the first 34 months of the litigation—
`strains credulity. Apotex had every opportunity to develop that enablement theory during the
`first two years of this litigation. The defense involves the disclosures of the patent, not some
`heretofore unknown fact. Apotex opted for litigation by ambush, rather than adhering to the
`Federal and Local Rules. Its gambit should not be countenanced.
`
`

`

`Case 1:16-cv-01221-LPS Document 160 Filed 07/06/20 Page 4 of 4 PageID #: 1322
`
`June 29, 2020
`Page 4
`
`
`
`cc:
`
`All Counsel of Record (by e-mail)
`
`Respectfully,
`
`/s/ Anthony D. Raucci
`
`Anthony D. Raucci (#5948)
`
`