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`UNITED STATES DISTRICT COURT
`SOUTHERN DISTRICT OF INDIANA
`INDIANAPOLIS DIVISION
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`ELI LILLY AND COMPANY,
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` Plaintiff,
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` v.
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`DR. REDDY’S LABORATORIES, LTD., and
`DR. REDDY’S LABORATORIES, INC.,
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` Defendants.
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` Case No. 1:16-cv-00308-TWP-MPB
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`ENTRY ON PLAINTIFF’S OBJECTION AND DEFENDANTS’ MOTION TO STRIKE
`NEW ARGUMENTS IN PLAINTIFF’S REPLY
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`This matter is before the Court on Defendants Dr. Reddy’s Laboratories, LTD’s and Dr.
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`Reddy’s Laboratories, Inc.’s (collectively, “DRL”) Motion to Strike Portions of Plaintiff’s Expert
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`Reports Served On Defendants On March 21, 2017 (Filing No. 74), and Plaintiff Eli Lilly and
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`Company’s (“Lilly”) Objections to Order on Motion to Strike Portions of Plaintiff’s Expert
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`Reports (“the Order”) (Filing No. 97). Also before the Court is a Motion to Strike New Arguments
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`in Plaintiff's Reply That Were Neither Raised in its Objections nor Made to the Magistrate Judge
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`(Filing No. 112). For the following reasons, the Court sustains Lilly’s objections, reverses the
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`Order, and denies DRL’s motion to strike portions of Lilly’s expert report. The Court also denies
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`DRL’s motion to strike alleged new arguments in Lilly’s reply.
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`I. BACKGROUND
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`On August 10, 2010, U.S. Patent No. 7,772,209 (“the ‘209 patent”) was issued to Lilly.
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`The ‘209 patent covers the method of administering ALIMTA® (pemetrexed for injection)—an
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`anti-cancer drug that requires physicians to co-administer the drug with folic acid and vitamin B12
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`to reduce the incidence of patient toxicity. This case surrounds a patent dispute. DRL filed a New
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`Case 1:16-cv-00308-TWP-MPB Document 154 Filed 09/06/17 Page 2 of 11 PageID #: 4883
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`Drug Application (NDA) with the United States Food and Drug Administration seeking approval
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`to manufacture and sell its pemetrexed products (“NDA Products”)—a similar1 anti-cancer
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`injection that requires physicians to co-administer the drug with folic acid and vitamin B12. On
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`February 5, 2016, Lilly filed a Complaint against DRL, asserting DRL’s NDA Products will be
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`marketed as competing products to ALIMTA® and the use of the NDA Products infringe on the
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`‘209 patent. (Filing No. 1.)
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`Several months later, on June 20, 2016, the Magistrate Judge held an Initial Pretrial
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`Conference, discussing discovery, case management, and other matters. The Magistrate Judge
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`approved as amended the parties’ Case Management Plan (“CMP”), setting September 6, 2016 as
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`the deadline for Lilly’s infringement contentions and DRL’s invalidity contentions. (Filing No.
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`45 at 5.) On September 6, 2016, Lilly filed infringement contentions, asserting:
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`The use of DRL’s NDA Products meets all limitations of [claims 1-22 of the ‘209
`patent], either literally or under the doctrine of equivalents. DRL is liable as a
`direct infringer based on the filing of its NDA, as well as for active inducement of
`infringement and/or for contributory infringement.
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`(Filing No. 48 at 1-2).
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`On March 21, 2017, Lilly provided DRL with the expert reports of Bruce A. Chabner,
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`M.D. (“Dr. Chabner”), and Rodolfo Pinal, Ph.D. (“Dr. Pinal”). Ten days after receiving the expert
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`reports, DRL filed a Motion to Strike large portions of the reports, asserting they violated the CMP
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`by raising new theories of infringement not disclosed in Lilly’s infringement contentions. (Filing
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`No. 74.) The Court referred the Motion to Strike to the Magistrate Judge and, on April 28, 2017,
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`the Magistrate Judge granted DRL’s Motion to Strike. (Filing No. 96.) The Magistrate Judge
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`specifically concluded that Lilly alleged only infringement under the doctrine of equivalents in its
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`1 The only difference between the ‘209 patent and DRL’s NDA Products is: the ‘209 patent requires administration of
`pemetrexed disodium and DRL’s NDA Products require administration of pemetrexed ditromethamine.
`2
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`Case 1:16-cv-00308-TWP-MPB Document 154 Filed 09/06/17 Page 3 of 11 PageID #: 4884
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`infringement contentions; however, Lilly’s expert reports address literal infringement, as well as
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`inducement and contributory infringement. Accordingly, the Magistrate Judge excluded the
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`following portions of Dr. Chabner’s eight-six (86) paragraph report:
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`(1)
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`(2)
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`(3)
`(4)
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`literal
`in paragraphs 38-59, and
`infringement analysis
`literal
`the
`infringement-related statements in the report in paragraphs 60, 63, and 80;
`the “Inducement of and Contribution to Infringement” section at paragraphs
`81 and 82, as well as a portion of paragraph 60;
`portions of the Claims Chart attached as Exhibit C to the report; and
`the theories under the doctrine of equivalents in paragraphs 60-61, 64-73,
`and 77-80.
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`Id. at 20; see also Filing No. 75 at 19-40; 42-44. The Magistrate Judge also excluded the following
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`portions of Dr. Pinal’s report:
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`(1)
`(2)
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`the partial doctrine of equivalents analysis in paragraphs 15 and 16; and
`the section entitled, “DRL’s NDA Products Administered with Saline
`Literally Meets the Pemetrexed Disodium Limitation in the Claims of the
`‘209 Patent,” in paragraphs 72 and 73.
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`(Filing No. 96 at 20; Filing No. 75 at 122-23; 148.)
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`II.
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`LEGAL STANDARD
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`A district court may refer a non-dispositive pretrial motion to a magistrate judge under
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`Federal Rule of Civil Procedure 72(a). Rule 72(a) provides:
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`When a pretrial matter not dispositive of a party’s claim or defense is referred to a
`magistrate judge to hear and decide, the magistrate judge must promptly conduct
`the required proceedings and, when appropriate, issue a written order stating the
`decision. A party may serve and file objections to the order within 14 days after
`being served with a copy. A party may not assign as error a defect in the order not
`timely objected to. The district judge in the case must consider timely objections
`and modify or set aside any part of the order that is clearly erroneous or is contrary
`to law.
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`Fed. R. Civ. P. 72(a). The clear error standard is highly deferential, permitting reversal only when
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`the district court “is left with the definite and firm conviction that a mistake has been made.”
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`Weeks v. Samsung Heavy Indus. Co., Ltd., 126 F.3d 926, 943 (7th Cir. 1997).
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`3
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`III. DISCUSSION
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`Lilly objects to the Order, contending the Magistrate Judge erred by: 1) excluding evidence
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`disclosed in Lilly’s infringement contentions; 2) sanctioning Lilly for violating the CMP; and 3)
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`misapplying the four-factor test that determines when to exclude expert testimony.
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`A. Motion to Strike New Arguments in Reply (Filing No. 112).
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`As an initial matter, the Court addresses DRL’s request to strike two arguments included
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`in Lilly’s Reply Brief, specifically that: 1) Lilly disclosed its “equivalence” contentions in a
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`November 29, 2016 letter to DRL, and 2) subsequent events cured DRL of prejudice. DRL
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`contends that these arguments are new and were not presented to the Magistrate Judge. See Silver
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`Streak Indus., LLC v. Squire Boone Caverns, Inc., No. 4:13-CV-00173-RLY, 2014 WL 220682,
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`at *1 (S.D. Ind. Jan. 21, 2014) (“New arguments and evidence may not be raised for the first time
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`in a reply brief. Reply briefs are for replying, not raising new arguments or arguments that could
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`have been advanced in the opening brief”); see also United States v. Melgar, 227 F.3d 1038, 1040
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`(7th Cir. 2000) (“district courts should not consider arguments not raised initially before the
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`magistrate judge”).
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`Upon review of the parties’ briefing, the Court determines that Lilly’s Reply Brief did not
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`inject new evidence, arguments, or issues. Instead, the Reply Brief provided Lilly’s response to
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`the arguments advanced by DRL in its Response Brief. Specifically, Lilly asserts that DRL
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`maintained notice of Lilly’s claims and DRL will not suffer prejudice by the inclusion of Lilly’s
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`expert reports. Accordingly, the Court denies DRL’s Motion to Strike arguments in Lilly’s reply
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`brief. See Lady Di’s, Inc. v. Enhanced Servs. Billing, Inc., 2010 U.S. Dist. LEXIS 29463, at *4
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`(S.D. Ind. Mar. 25, 2010) (The “purpose for having a motion, response and reply is to give the
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`movant the final opportunity to be heard and to rebut the non-movant’s response, thereby
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`4
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`Case 1:16-cv-00308-TWP-MPB Document 154 Filed 09/06/17 Page 5 of 11 PageID #: 4886
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`persuading the court that the movant is entitled to the relief requested by the motion”) (emphasis
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`added).
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`B.
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`Lilly’s Infringement Contentions.
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`Regarding the merits of the motion to strike portions of its expert report, Lilly argues that
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`the Magistrate Judge erred in excluding paragraphs 38-47, 60-61, 63-73, and 77-82 of Dr.
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`Chabner’s report, as well as paragraphs 15 and 16 of Dr. Pinal’s report because the issues addressed
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`in those paragraphs were disclosed on September 6, 2016 in Lilly’s infringement contentions.
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`The Court agrees. The Magistrate Judge erred in striking paragraphs 38 through 47, as
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`well as certain sections in paragraph 63 of Dr. Chabner’s report, which address DRL’s
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`infringement on the ‘209 patent with respect to the administration of folic acid and vitamin B12.
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`(See Filing No. 76 at 21-22.) The Magistrate Judge concluded that these paragraphs regard literal
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`infringement and that Lilly did not disclose literal infringement in its infringement contentions.
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`To the contrary, Lilly’s infringement contentions make clear that, “the use of DRL’s NDA
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`Products meets all limitations of each of the asserted claims, either literally or under the doctrine
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`of equivalents” because, among other things, “the labeling for DRL’s NDA Products directs
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`administration of…folic acid” and “vitamin B12.” (Filing No. 48 at 1; 5-10; 11-14) (emphasis
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`added).
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`The Court also finds error in striking paragraphs 60-61, 64-73, and 77-80 of Dr. Chabner’s
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`report, as well as paragraphs 15 and 16 of Dr. Pinal’s report. These paragraphs explain that DRL’s
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`administration of pemetrexed ditromethamine amounts to infringement under the doctrine of
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`equivalents because it performs in substantially the same way as Lilly’s administration of
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`pemetrexed disodium under the ‘209 patent. The Magistrate Judge concluded that the experts’
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`analyses amount to new theories under the doctrine of equivalents and are outside the scope of
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`5
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`Lilly’s infringement contentions. The Court disagrees and notes that, similar to the expert reports,
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`Lilly’s infringement contentions state verbatim that:
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`DRL’s NDA Products contain “pemetrexed ditromethamine.” DRL0000171. There
`is an insubstantial difference between administering pemetrexed ditromethamine
`and administering pemetrexed disodium in accordance with claim 1; pemetrexed
`ditromethamine performs substantially the same function in substantially the same
`way to achieve substantially the same result as the pemetrexed disodium as claimed
`in claim 1.
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`(Filing No. 48 at 4) (emphasis added).
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`Lastly, the Magistrate Judge erred when concluding paragraphs 81 and 82 of Dr. Chabner’s
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`report assert new theories. In those paragraphs, Dr. Chabner explains that the NDA Products’
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`label induces and contributes to infringement of the ‘209 patent. Lilly’s infringement contentions
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`state “DRL is liable as a direct infringer based on the filing of its NDA, as well as for active
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`inducement of infringement and/or for contributory infringement.” (Filing No. 48 at 3-4.) The
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`contentions go on to state that “the labeling for DRI’s NDA Products directs” administration of
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`certain drugs in a way that infringes on the ‘209 patent. See id. at 4-6 (emphasis added). The
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`parties concede that DRL is a pharmaceutical company, rather than a physician. Therefore, the
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`Court finds it reasonably clear from the infringement contentions that the term “directs” refer to
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`Lilly’s claim that DRL induces and contributes to physicians and others administering DRL’s
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`NDA Products in a way that infringes on the ‘209 patent. See Dawson Chem. Co. v. Rohm & Haas
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`Co., 448 U.S. 176, 188 (1980) (noting the purpose of the contributory infringement statute is “to
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`protect patent rights from subversion by those who, without directly infringing the patent
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`themselves, engage in acts designed to facilitate infringement by others”); see also PharmaStem
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`Therapeutics, Inc. v. ViaCell, Inc., 491 F.3d 1342, 1357 (Fed. Cir. 2007) (“a person who provides
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`a service that assists another in committing patent infringement may be subject to liability under
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`section 271(b) for active inducement of infringement”).
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`6
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`Although “[e]xpert infringement reports may not introduce theories not previously set forth
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`in infringement contentions”, “[i]nfringement contentions are generally considered adequate if
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`they provide fair notice of the scope of the plaintiff’s infringement theory.” Trading Techs. Int'l,
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`Inc. v. CQG, Inc., No. 05-CV-4811, 2014 WL 4477932, at *2 (N.D. Ill. Sept. 10, 2014) (emphasis
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`added). Accordingly, the Court reverses the Magistrate Judge’s Order with respect to paragraphs
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`38-47, 60-61, 63-73, and 77-82 of Dr. Chabner’s report, as well as paragraphs 15 and 16 of Dr.
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`Pinal’s report because Lilly’s infringement contentions disclosed the information in those
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`paragraphs. See Weeks, 126 F.3d at 943 (the clear error standard permits reversal when the district
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`court “is left with the definite and firm conviction that a mistake has been made.”).
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`The Court notes, and Lilly concedes, that its infringement contentions did not disclose its
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`claim that the administration of DRL’s pemetrexed ditromethamine in conjunction with cisplatin
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`amounts to administration of Lilly’s pemetrexed disodium. This information is included in
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`paragraphs 48 through 59 of Dr. Chabner’s report and paragraphs 72 and 73 of Dr. Pinal’s report.
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`For the reasons discussed below, however, the Court reverses the Order striking those paragraphs.
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`C.
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`The Case Management Plan.
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`The Magistrate Judge granted DRL’s Motion to Strike large portions of Lilly’s expert
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`reports after concluding Lilly violated the CMP’s infringement contentions deadline. Lilly argues
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`that the Court should reverse the sanction because Lilly did not have notice that “final”, rather than
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`“preliminary”, infringement contentions were due September 6, 2016. Lilly points to the language
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`directly preceding the CMP’s deadline for infringement contentions, which states:
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`Given that many of documents and witnesses concerning the DRL Defendants’
`proposed NDA product are in India, and given the degree of complexity of the
`scientific issues involved (and the concomitant need for expert testimony, including
`from clinicians), the parties anticipate that both fact and expert discovery
`concerning infringement will take longer than for most cases.
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`7
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`Case 1:16-cv-00308-TWP-MPB Document 154 Filed 09/06/17 Page 8 of 11 PageID #: 4889
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`Accordingly, all liability discovery—both fact and expert—must be completed by
`May 15, 2017…The parties should focus their early discovery in a manner that
`prepares them to respond timely to discovery requests concerning their preliminary
`infringement and invalidity contentions.
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`(Filing No. 45 at 4-5) (emphasis added). Lilly contends, based on the CMP’s “preliminary
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`infringement and invalidity contentions” language, it mistakenly thought that the infringement
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`contentions due on September 6, 2016 were “preliminary”, hence Lilly filing Preliminary
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`Infringement Contentions on September 6, 2016. (See Filing No. 48.) Lilly also points to the
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`following passage from the CMP when arguing that it reasonably believed “final” infringement
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`contentions were due by May 30, 2017:
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`Within 14 days after the liability discovery deadline (i.e., by May 30, 2017), and
`consistent with the certification provisions of Fed. R. Civ. Proc. 11(b), the party
`with the burden of proof must file a statement of the claims or defenses it intends to
`prove at trial, stating specifically the legal theories upon which the claims or
`defenses are based.
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`(Filing No. 45 at 7) (emphasis added).
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`After reviewing the CMP, the Court finds Lilly did not have actual notice that the
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`September 6, 2016 deadline amounted to a “final” rather than “preliminary” deadline. Although
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`September 6, 2016 is the only deadline that specifically states “infringement contentions,” the
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`CMP appears to anticipate both “preliminary” and “final” infringement contentions. (See Filing
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`No. 45 at 4-5 “[t]he parties should focus their early discovery in a manner that prepares them to
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`respond timely to discovery requests concerning their preliminary infringement and invalidity
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`contentions”) (emphasis added). The Court also notes that the September 6, 2016 deadline was
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`very early in the discovery process—nearly eight months prior to the liability discovery deadline.
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`Accordingly, the Court finds it reasonable for Lilly to believe that only preliminary infringement
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`contentions were due at such an early date in discovery. See id. Because the CMP did not give
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`sufficient notice that final infringement contentions were due on September 6, 2016, the Court
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`8
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`Case 1:16-cv-00308-TWP-MPB Document 154 Filed 09/06/17 Page 9 of 11 PageID #: 4890
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`sustains Lilly’s objection as to each excluded paragraph of Lilly’s expert reports. See Fed. R. Civ.
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`P. 83 (“No sanction or other disadvantage may be imposed for noncompliance with any
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`requirement not in federal law, federal rules, or the local rules unless the alleged violator has been
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`furnished in the particular case with actual notice of the requirement”); see also Massachusetts
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`Inst. of Tech. & Elecs. For Imaging, Inc. v. Abacus Software, 462 F.3d 1344, 1359 (Fed. Cir. 2006)
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`(concluding the district court erred in barring plaintiff’s claim against Windows as an infringing
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`product because plaintiff was not given sufficient notice that its preliminary contentions would be
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`deemed final or that plaintiff could update the contentions only after a showing of good cause).
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`D.
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`Four-Factor Expert Exclusion test
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`The Court briefly discusses the four-factor expert exclusion test. In deciding whether to
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`impose sanctions for a discovery violation, the Court considers: 1) the prejudice to DRL; 2) the
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`ability of Lilly to cure the prejudice; 3) the likelihood of disruption to the trial; and 4) the bad faith
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`or willfulness involved in not disclosing the evidence at an earlier date. Judson Atkinson Candies,
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`Inc. v. Latini-Hohberger Dhimantec, 529 F.3d 371, 386 (7th Cir. 2008) (quoting David v.
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`Caterpillar, Inc., 324 F.3d 851, 857 (7th Cir. 2003)); Eli Lilly & Co. v. Teva Parenteral Medicines,
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`Inc., No. 1:10-CV-01376-TWP, 2015 WL 735724, at *3 (S.D. Ind. Feb. 20, 2015).
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`The Magistrate Judge concluded that the inclusion of certain paragraphs in Lilly’s expert
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`reports will cause DRL to suffer substantial prejudice because: “DRL will be forced to choose
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`between rushed discovery related to the new contentions… [and] will require DRL to find and
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`retain additional experts and conduct other appropriate discovery.” (Filing No. 96 at 18.) The
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`Order goes on to state “that the only way for DRL to accomplish this within the current discovery
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`deadline would be with undue haste, posing a risk of reduced quality of expert opinions.” Id.
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`9
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`Case 1:16-cv-00308-TWP-MPB Document 154 Filed 09/06/17 Page 10 of 11 PageID #: 4891
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`The Court previously found that Lilly did not violate any discovery deadlines with respect
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`to paragraphs 38-47, 60-61, 63-73, and 77-82 of Dr. Chabner’s report, as well as paragraphs 15
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`and 16 of Dr. Pinal’s report. Accordingly, DRL is not prejudiced by the inclusion of those
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`paragraphs. The Court also concludes, despite the Magistrate Judge’s holding, the inclusion of
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`Lilly’s expert reports will not prejudice DRL because DRL recently conducted discovery and
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`served responsive expert reports regarding each and every infringement theory discussed in Lilly’s
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`expert reports. Because any prejudice to DRL is cured and the trial remains scheduled for January
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`29, 2018, the Court sustains Lilly’s objection.
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`IV. CONCLUSION
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`For the above-mentioned reasons, the Court SUSTAINS Lilly’s Objection to Order to
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`Strike Portions of Plaintiff’s Expert Reports (Filing No. 97) in its entirety. In addition, the Court
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`DENIES DRL’s Motion to Strike New Arguments in Plaintiff’s Reply Brief (Filing No. 112). The
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`Court specifically concludes that Lilly disclosed in its infringement contention the information
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`contained in paragraphs 38-47, 60-61, 63-73, and 77-82 of Dr. Chabner’s report, as well as
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`paragraphs 15 and 16 of Dr. Pinal’s report. The Court also concludes that DRL is not prejudiced
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`by the inclusion of Lilly’s expert reports and that the CMP did not provide sufficient notice that
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`September 6, 2016 amounted to the “final” contentions’ deadline.
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`SO ORDERED.
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`Date: 9/6/2017
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`10
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`Case 1:16-cv-00308-TWP-MPB Document 154 Filed 09/06/17 Page 11 of 11 PageID #: 4892
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`Bruce Roger Genderson
`WILLIAMS & CONNOLLY LLP
`bgenderson@wc.com
`
`Christopher T Berg
`WILLIAMS & CONNOLLY LLP
`cberg@wc.com
`
`Galina I. Fomenkova
`WILLIAMS & CONNOLLY LLP
`gfomenkova@wc.com
`
`David M. Krinsky
`WILLIAMS & CONNOLLY, LLP
`dkrinsky@wc.com
`
`Dov P. Grossman
`WILLIAMS & CONNOLLY, LLP
`dgrossman@wc.com
`
`DISTRIBUTION:
`
`Anne N. DePrez
`BARNES & THORNBURG LLP
`(Indianapolis)
`adeprez@btlaw.com
`
`Jan M. Carroll
`BARNES & THORNBURG, LLP
`(Indianapolis)
`jan.carroll@btlaw.com
`
`Rory O’Bryan
`HARRISON & MOBERLY (Indianapolis)
`robryan@harrisonmoberly.com
`
`Stephen E. Arthur
`HARRISON & MOBERLY (Indianapolis)
`sarthur@harrisonmoberly.com
`
`Charles A. Weiss
`HOLLAND & KNIGHT LLP
`charles.weiss@hklaw.com
`
`Jeffery B. Arnold
`HOLLAND & KNIGHT LLP
`jeffery.arnold@hklaw.com
`
`Merri C Moken
`HOLLAND & KNIGHT LLP
`merri.moken@hklaw.com
`
`Eric H. Yecies
`HOLLANDS & KNIGHT LLP
`eric.yecies@hklaw.com
`
`Adam L. Perlman
`WILLIAMS & CONNOLLY LLP
`aperlman@wc.com
`
`Alec T. Swafford
`WILLIAMS & CONNOLLY LLP
`aswafford@wc.com
`
`
`
`
`
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`11
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