Case 1:18-cv-00924-CFC-SRF Document 192 Filed 05/13/19 Page 1 of 4 PageID #:
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`GENENTECH, INC. and CITY OF HOPE,
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`Plaintiffs,
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE DISTRICT OF DELAWARE
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`C.A. No.: 17-1407-CFC
`(CONSOLIDATED)
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` C.A. No.: 18-924-CFC
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`v.
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`AMGEN INC.,
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`Defendant.
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`AMGEN INC.’S OPENING LETTER
`IN ADVANCE OF MAY 16, 2019 DISCOVERY HEARING
`C.A. No. 17-1407-CFC:
`C.A. No. 18-924-CFC:
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`YOUNG, CONAWAY, STARGATT &
`SMITH, KATZENSTEIN & JENKINS, LLP
`TAYLOR LLP
`Neal C. Belgam (No. 2721)
`Melanie K. Sharp (No. 2501)
`Eve H. Ormerod (No. 5369)
`James L. Higgins (No. 5021)
`1000 West Street, Suite 1501
`Michelle Marie Ovanesian (No. 6511)
`Wilmington, DE 19801
`Rodney Square
`P (302) 652-8400
`1000 North King Street
`nbelgam@skjlaw.com
`Wilmington, DE 19801
`eormerod@skjlaw.com
`P (302) 571-6600
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`msharp@ycst.com
`Attorneys for Defendant Amgen Inc.
`jhiggins@ycst.com
`movanesian@ycst.com
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`Attorneys for Defendant Amgen Inc.
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`Dated: May 13, 2019
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`Case 1:18-cv-00924-CFC-SRF Document 192 Filed 05/13/19 Page 2 of 4 PageID #:
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`Dear Judge Connolly:
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`We write on behalf of Amgen Inc. (“Amgen”) in these actions to respectfully request that
`the Court compel Plaintiffs Genentech, Inc. and City of Hope (collectively, “Plaintiffs”) to
`produce certain licensing and settlement agreements and related documents sought by Amgen.
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`I.
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`Factual Background
`In both the Avastin Case (C.A. No.: 17-1407-CFC) and the Herceptin Case (C.A. No.:
`18-924-CFC), Amgen propounded discovery seeking documents and things relating to any
`licenses or potential licenses to the patents-in-suit and 30(b)(6) deposition topics relating thereto.
`See Avastin Case, Amgen’s Request for Production Nos. 12, 13, and 63 (and Responses) and
`30(b)(6) Topic Nos. 52-54 (responses forthcoming) (Ex. A); Herceptin Case, Amgen’s Request
`for Production Nos. 27, 31, 32 and 65 (and Responses) and 30(b)(6) Topic Nos. 29 and 30 (and
`responses) (Ex. B). Plaintiffs’ response in the Avastin Case was that they “will produce the
`Licensing Agreements” subject to various objections including that Plaintiffs’ licensing partners
`should be given the opportunity to object. (Ex. A). Plaintiffs’ responses in the Herceptin Case
`contained various objections and concluded by stating their willingness to meet and confer on the
`discovery requests, but refusing to designate a witness to testify on deposition topics relating to
`the license and settlement agreements. (Ex. B).
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` A
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` hearing on Amgen’s prior motion to compel (D.I. 290) in the Avastin Case was
`scheduled for March 12, 2019. However, days before the hearing, third party Pfizer submitted
`an undocketed email to the Court in which it requested “the opportunity to be heard and to
`submit a brief in support of a protective order . . . .” (Ex. C). The Court thereafter entered an
`Oral Order on March 11 that it would not hold oral argument on Amgen’s motion in the Avastin
`Case as scheduled on March 12, but would instead discuss procedures to “allow for the third
`parties in question to be heard on the merits of the disputed issue.” (Ex. D). The Court
`scheduled a hearing in the Avastin Case for May 16 to address this issue, and on April 24, 2019,
`after Amgen informed the Court that a similar issue with third party agreements would need to
`be resolved in the Herceptin Case, the Court agreed to address the issue in both cases at the May
`16 hearing.
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`In advance of the May 16 hearing, Amgen proposed to the third parties that they file an
`opening letter seeking a protective order to which Amgen would respond, consistent with
`Pfizer’s earlier request of the Court (Ex. C) and the Court’s invitation to the third parties to “be
`heard on the merits of the disputed issue.” The third parties refused, however, and said that
`absent a present Court order it would make no sense for them to seek a protective order.
`Instead, they demanded that Amgen re-file its motion to compel, at which time they would
`respond, leaving Amgen no opportunity to respond in writing to their concerns. Although
`Amgen is filing an opening letter, the third parties’ failure to move for a protective order should
`result in waiver of any objection in the Avastin Case.
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`Legal Standards
`Parties may obtain discovery regarding nonprivileged matter that is relevant and
`proportional to the needs of the case. Fed. R. Civ. P. 26(b)(1); Sciele Pharma, Inc. v. Lupin, No.
`09-37-RBK/JS, 2013 WL 12161442, at *2 (D. Del. Jan. 31, 2013) (explaining that the Rules
`promote a broad and liberal policy of discovery to enable fullest possible knowledge of the
`issues and facts before trial).Courts routinely compel discovery of settlement agreements, while
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`II.
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`Case 1:18-cv-00924-CFC-SRF Document 192 Filed 05/13/19 Page 3 of 4 PageID #:
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`adhering to the tradition of construing the requirement of relevancy “liberally and with common
`sense, rather than in terms of narrow legalism.” Key Pharms., Inc. v. ESI-Lederle, Inc., No. 96-
`1219, 1997 WL 560131, at *3 (E.D. Pa. Aug. 29, 1997). In patent litigation, “[c]ourts have
`frequently ordered the production of such agreements.” Allergan, Inc. v. Teva Pharms. USA,
`Inc., No. 15-1455-WCB, 2017 WL 132265, at *1-2 (E.D. Tex. Jan. 12, 2017); see also Wyeth v.
`Orgenus Pharma. Inc., No. 09-3235-FLW, 2010 WL 4117157, at *4 (D.N.J. Oct. 19, 2010)
`(ordering production of settlement agreements) (collecting cases).
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`III. The Agreements and Related Documents are Relevant and Should be Produced
`The licensing and settlement agreements are directly relevant to the claims and defenses
`asserted in these lawsuits,1 including the reasonable royalty analysis, the irreparable harm prong
`of the injunction analysis, whether permanent or preliminary, and Plaintiffs’ rebuttal of Amgen’s
`obviousness defense (secondary considerations of obviousness, including commercial success).
`Courts have ordered the production of settlement agreements where they are relevant to these
`issues. See Blue Gentian, LLC v. Tristar Prods., Inc., No. 13-1758, 2017 WL 5451745, at *4-6
`(D.N.J. Nov. 14, 2017) (cited by Plaintiffs) (finding that the terms of the plaintiff’s settlement
`agreement with another litigant “as a whole, is relevant to determining a reasonable royalty rate
`here”); High Tech Med. Instrumentation, Inc. v. New Image Indus., Inc., 49 F.3d 1551, 1557
`(Fed. Cir. 1995) (“The evidence shows that HTMI offered a license to New Image, so it is clear
`that HTMI is willing to forgo its patent rights for compensation. That evidence suggests that any
`injury suffered by HTMI would be compensable in damages assessed as part of the final
`judgment in the case.”) Allergan, 2017 WL 132265, at *2 (agreements were “at least minimally
`relevant to the secondary consideration of commercial success”). Because the requested
`documents are relevant, the Court should grant Amgen’s request. See In re MSTG, Inc., 675
`F.3d 1337, 1348 (Fed. Cir. 2012) (approving order compelling production of negotiation
`documents underlying settlement agreements, and commenting that “[o]ur cases appropriately
`recognize that settlement agreements can be pertinent to the issue of reasonable royalties.”).
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`During the meet and confer on this issue, the third parties’ counsel suggested that these
`agreements are irrelevant because they include patents and products other than those in suit.
`That argument is not only incorrect, see Ex. E (identifying the many overlapping patents), but it
`also misses the point. Regardless of what biosimilar products were the subject of the licenses
`and settlement agreements, Plaintiffs elected to settle claims relating to the process patents that
`they alleged were practiced in connection with manufacturing those products that would compete
`with Plaintiffs’ branded products. The monetary value Plaintiffs place on allowing one
`biosimilar competitor to practice Plaintiffs’ process patents is clearly relevant to the value
`Plaintiffs would place on another biosimilar competitor practicing the same patents, regardless of
`the product at issue. At the very least, the agreements demonstrate a willingness by Plaintiffs to
`license the overlapping patents, indicating that monetary damages are sufficient compensation.
`The third parties’ argument ultimately relates, at best, to the weight to be afforded the
`agreements, which is a subject for experts to address in discovery and at trial.
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`The third parties expressed a willingness to produce the agreements if Amgen agreed to
`certain redactions and access restrictions. Specifically, they suggested redaction of party names,
`all launch dates, and ex-U.S. terms, in addition to production on an outside counsel eyes only
`basis, provided the outside counsel viewing the agreements does not participate in settlement
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`1 See Ex. E, which shows that the majority of the licensed patents are asserted against Amgen.
`2
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`Case 1:18-cv-00924-CFC-SRF Document 192 Filed 05/13/19 Page 4 of 4 PageID #:
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`negotiations. Amgen agreed to the redaction of party names, and solely ex-U.S. terms that do not
`impact an understanding of corresponding U.S. terms, but the third parties rejected this offer.
`U.S. Launch dates and ex-U.S. terms that influence the U.S. terms are critical to Amgen’s ability
`to understand and evaluate the agreements.
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`The concerns of the third parties are adequately addressed by the Protective Orders in
`both cases. See, e.g., Wyeth v. Orgenus Pharma Inc., No. 09-3235-FLW, 2010 WL 4117157, at
`*4 (D.N.J. Oct. 19, 2010), (“other courts have routinely recognized that license agreements
`relating to the patent-in-suit, and entered into in connection with settlement, are discoverable and
`that Plaintiff’s third party confidentiality concerns do not outweigh legitimate grounds to compel
`production”); Allergan, 2017 WL 132265, at *3 (“the case law is clear that no such
`confidentiality agreement can bind a court and bar the court from ordering production of the
`agreement. Otherwise, parties could, by agreement, effectively create new privileges against
`discovery orders, no matter how relevant the material in question may be.”); Sciele Pharma,
`2013 WL 12161442, at *1 n.1 (“To the extent Lupin argues non-production is warranted because
`the requested documents are confidential, the argument is also denied. The Confidentiality Order
`in effect adequately protects Lupin’s interests.”).
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`Amgen’s designated in-house counsel are bound by the terms of the Protective Orders
`and cannot use information produced under the Protective Orders outside of these litigations for
`any purpose. See Avastin Case Protective Order (D.I. 209) at ¶ 28; Herceptin Case Protective
`Order (D.I. 47) at ¶ 24 & ¶ 28(b). The third parties’ insistence on an outside counsel-only
`limitation combined with a bar that prohibits any of the recipients from participating in
`settlement negotiations is far too broad. Courts have held that parties cannot restrict the ability
`of their attorneys to advise their client in the course of the litigation without a showing of
`“exceptional need.” Allergan, 2017 WL 132265, at *2; see also Barnes & Noble, Inc., v. LSI
`Corp., No. 11-2709, 2012 WL 1564734, at *4 (N.D. Cal. May 2, 2012) (citing cases) (“Simply
`put, the parties’ in-house counsel should have access to executed license agreements, and any
`drafts of them, that involve the patents-in-suit.”). Allowing the third parties to restrict Amgen’s
`designated in-house counsel from having such access here would deprive Amgen from being
`fully involved in case-critical activities including, by way of example, reviewing, fully
`understanding potential injunction briefs, and working directly with experts on damages and
`irreparable harm issues. It would also have a chilling effect on discussions between in-house
`counsel aimed at resolving the matter. Maintaining open channels of communication between
`the parties is an important part of any case and should be encouraged, rather than restricted. If
`faced with this choice, Amgen would have to reevaluate whether and how to expend resources
`on settlement negotiations.
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`Respectfully submitted,
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`/s/ Neal C. Belgam
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`Neal C. Belgam (No. 2721)
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`All Counsel of Record (via CM/ECF and email)
`cc:
`Counsel for Third Parties (via email)
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`Enclosures
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`James L. Higgins (No. 5021)
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`Respectfully submitted,
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`/s/ James L. Higgins
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