Case 1:07-cv-00551-GMS Document 163 Filed 06/26/09 Page 1 of 74 PageID #: 3240
`
`1
`
`IN THE UNITED STATES DISTRICT COURT
`IN AND FOR THE DISTRICT OF DELAWARE
`-
`- -
`
`SANTARUS, INC., a Delaware
`corporation, and THE
`CURATORS OF THE UNIVERSITY
`OF MISSOURI, a public
`corporation and body
`Politic of the State
`of Missouri,
`
`Plaintiffs,
`
`v.
`PAR PHARMACEUTICAL, INC.,
`a Delaware corporation,
`Defendant.
`
`1 2 3 4 5 6 7 8 9
`
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`
`:
`- - -
`Wilmington, Delaware
`Monday, June 22, 2009
`9:30 a.m.
`Conference
`- - -
`BEFORE: HONORABLE GREGORY M. SLEET, Chief Judge
`APPEARANCES:
`JACK B. BLUMENFELD, ESQ., and
`JAMES WALTER PARRETT, JR., ESQ.
`Morris, Nichols, Arsht & Tunnell
`-and-
`MORGAN CHU, ESQ.,
`GARY FRISCHLING, ESQ.,
`ELLISEN SHELTON TURNER, ESQ., and
`BENJAMIN T. WANG, ESQ.
`Irell & Manella LLP
`(Los Angeles, CA)
`
`Civil Action
`
`No. 07-551(GMS)
`
`:
`:
`:
`:
`:
`:
`
`::
`
`::
`
`::
`
`:
`
`::
`
`UA-1020.001
`
`
`
`1
`
`IN THE UNITED STATES DISTRICT COURT
`IN AND FOR THE DISTRICT OF DELAWARE
`-
`- -
`
`SANTARUS, INC., a Delaware
`corporation, and THE
`CURATORS OF THE UNIVERSITY
`OF MISSOURI, a public
`corporation and body
`Politic of the State
`of Missouri,
`
`Plaintiffs,
`
`v.
`PAR PHARMACEUTICAL, INC.,
`a Delaware corporation,
`Defendant.
`
`1 2 3 4 5 6 7 8 9
`
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`
`:
`- - -
`Wilmington, Delaware
`Monday, June 22, 2009
`9:30 a.m.
`Conference
`- - -
`BEFORE: HONORABLE GREGORY M. SLEET, Chief Judge
`APPEARANCES:
`JACK B. BLUMENFELD, ESQ., and
`JAMES WALTER PARRETT, JR., ESQ.
`Morris, Nichols, Arsht & Tunnell
`-and-
`MORGAN CHU, ESQ.,
`GARY FRISCHLING, ESQ.,
`ELLISEN SHELTON TURNER, ESQ., and
`BENJAMIN T. WANG, ESQ.
`Irell & Manella LLP
`(Los Angeles, CA)
`
`Civil Action
`
`No. 07-551(GMS)
`
`:
`:
`:
`:
`:
`:
`
`::
`
`::
`
`::
`
`:
`
`::
`
`UA-1020.001
`
`
`
`Case 1:07-cv-00551-GMS Document 163 Filed 06/26/09 Page 2 of 74 PageID #: 3241
`
`2
`
`Counsel for Plaintiff
`Santarus
`
`APPEARANCES CONTINUED:
`FREDERICK L. COTTRELL, III, ESQ., and
`STEVEN J. FINEMAN, ESQ.
`Richards, Layton & Finger
`-and-
`JANINE A. CARLAN, ESQ.,
`AZIZ BURGY, ESQ.,
`AMY E.L. SCHOENHARD, ESQ.,
`TIMOTHY W. BUCKNELL, ESQ., and
`JOSHUA T. MORRIS, ESQ.
`Arent Fox LLP
`(Washington, D.C.)
`
`Counsel for Defendant
`
`- - -
`
`THE COURT:
`
`Good morning. Please, take your
`
`seats.
`
`(Counsel respond "Good morning.")
`This is, we have found, over time, the best
`place to convene these, because it gets a little cramped in
`the largest conference room that I have.
`Counsel, let's begin.
`MR. BLUMENFELD: Good morning, Your Honor. At
`plaintiffs' table, Morgan Chu, Gary Frischling, Ellisen
`Turner, from Irell & Manella.
`James Parrett. And Carey
`Fox, who is in house at Santarus.
`THE COURT:
`Good morning.
`MR. FINEMAN: Good morning, Your Honor. Steve
`
`1 2 3 4 5 6 7 8 9
`
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`
`UA-1020.002
`
`
`
`Case 1:07-cv-00551-GMS Document 163 Filed 06/26/09 Page 44 of 74 PageID #: 3283
`44
`
`We will see. We will see. I tend to doubt it.
`I didn't formally rule on plaintiffs' motion. I
`am going to deny it without prejudice.
`I am going to deny
`this motion without prejudice to you renewing your
`contentions subsequently, both of you.
`When I say
`"subsequently," I mean both at trial and posttrial.
`That is my instinct as to the other two defense
`motions as well. Whoever has got responsibility for them,
`please, tell me why that wouldn't make sense.
`MR. BUCKNELL: Your Honor, Tim Bucknell. I was
`going to address the commercial success motion in limine.
`THE COURT: My favorite one. Okay.
`MR. BUCKNELL: Your Honor has mentioned judicial
`economy a couple of times. This motion is really --
`I want
`THE COURT:
`Let's get the docket item.
`to make sure I have the motion in front of me, counsel.
`This is Docket Item 131.
`That is the brief. Go
`
`ahead.
`
`MR. BUCKNELL: This is really directed towards
`judicial economy, Your Honor. As you are aware, in patent
`litigation, commercial success of a product may be an
`appropriate way for a party to rebut the showing --
`THE COURT:
`I had a reaction to this. Tell me
`why I am wrong about that. I have this phrase I use,
`"stealth motions" for summary judgment. Why shouldn't I
`
`1 2 3 4 5 6 7 8 9
`
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`
`UA-1020.003
`
`
`
`Case 1:07-cv-00551-GMS Document 163 Filed 06/26/09 Page 45 of 74 PageID #: 3284
`45
`
`view this as a motion for summary judgment, just sort of
`running along the surface in disguise, attempting to
`disguise itself?
`MR. BUCKNELL: Because we are not asking Your
`Honor to find either that there is no commercial success or
`that there is no nexus. This is really an evidentiary
`issue.
`
`That's what they should be directed
`
`The plaintiffs have produced nothing that should
`suggest a nexus. They have three experts who could have
`opined on it, none of which have.
`There is nothing there.
`It is an evidentiary issue, which is what motions in limine
`are directed towards.
`THE COURT:
`towards. I agree.
`MR. BUCKNELL: You mentioned Daubert previously.
`This is, in essence, a Daubert on this issue with regard to
`all three of their experts.
`THE COURT:
`I am listening.
`MR. BUCKNELL: The applicable case law doesn't
`spell out exactly how a party must go about establishing the
`nexus, simply that you must establish one in order for the
`substantive evidence about commercial success to be relevant
`in the matter.
`And of the three experts that could have
`opined on this issue --
`THE COURT:
`
`That is the point that they make in
`
`1 2 3 4 5 6 7 8 9
`
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`
`UA-1020.004
`
`
`
`Case 1:07-cv-00551-GMS Document 163 Filed 06/26/09 Page 46 of 74 PageID #: 3285
`46
`
`their opposition brief where they write, "There is no
`requirement in the law that testimony about commercial
`success must be delivered in its entirety from a single
`witness with expertise in both technology and economics."
`MR. BUCKNELL: Right. We never suggested as
`much, Your Honor.
`But, as I am sure you have encountered, this
`type of evidence generally comes from the economics expert
`that a party proffers. In this case, that would have been
`Ms. Julie Davis, who is an economist. Not only did she not
`opine on the required nexus, she admitted in her deposition
`she doesn't even know how one would go about establishing
`that.
`
`Did she rely on other expertise to
`
`THE COURT:
`offer her opinion?
`MR. BUCKNELL: She states she relies on the work
`of Dr. Fennerty and Dr. Banker.
`THE COURT:
`Is that not appropriate?
`MR. BUCKNELL: It wouldn't necessarily be. In
`this instance it is, because, one, Dr. Banker has done
`nothing with regard to commercial success, given at his
`deposition that he was offering no opinions in that regard,
`and none of plaintiffs' pretrial submissions suggest he is
`offering an opinion about commercial success.
`That leaves Dr. Fennerty. Ms. Carlan is going
`
`1 2 3 4 5 6 7 8 9
`
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`
`UA-1020.005
`
`
`
`Case 1:07-cv-00551-GMS Document 163 Filed 06/26/09 Page 47 of 74 PageID #: 3286
`47
`
`to go into detail more regarding Dr. Fennerty's
`qualifications. But in his report he doesn't offer any
`analysis of the issues.
`Essentially, the closest he comes
`is just a simple statement that the commercial success is
`related to the patents. When he was asked about it at his
`deposition, he said, I wouldn't call this an analysis. I
`would call this rendering an opinion.
`He simply hasn't done that. We have had no
`opportunity to analyze it.
`So the three experts that are being put forward,
`none establishes a connection between the asserted
`commercial success and the claims of the patent.
`We think the plaintiffs' briefing on this issue,
`they kind of like say Santarus's witnesses will explain how
`the commercial success is due to the patented claims. They
`don't say they have done so or there is any evidence that
`Par has been able to analyze that shows that.
`THE COURT:
`How big a deal is this issue of
`commercial success in the nonobviousness analysis in this
`case?
`
`MR. BUCKNELL: Contrary to plaintiffs'
`representations, I think that the substance of their
`commercial success argument is rather weak.
`This drug is,
`it's the sixth drug -- it has the lowest sales of any of its
`competitors. By all objective means, it is not very
`
`1 2 3 4 5 6 7 8 9
`
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`
`UA-1020.006
`
`
`
`Case 1:07-cv-00551-GMS Document 163 Filed 06/26/09 Page 48 of 74 PageID #: 3287
`48
`
`successful. It has approximately one percent of the
`relevant market. That's something that both their expert
`and our expert agree about, is that the sales are rather
`minor. They simply dispute what the relevance of those
`sales are.
`
`Plaintiffs in their briefing point to, they have
`six bullet points that allegedly establish the nexus. But
`when you look at those, only one that is even directed to
`nexus. The others are either directed to the practice of
`the patent or to their substantive argument that the drug is
`commercially successful.
`When you break down the one bullet point that is
`about the nexus, you will see the one citation is to a page
`in Ms. Davis's deposition transcript where she is explaining
`why commercial success is not mentioned on her curriculum
`vitae. Another one is two pages of testimony from Mr.
`Proehl, Santarus's executive, describing the marketing for
`the products at issue. And lastly, it is a page from Dr.
`Fennerty's expert report, which again says nothing about the
`nexus. Even when they had the opportunity to show that they
`could establish a nexus, they don't do so.
`Given that the testimony on this issue would
`likely be four hours of the Court 's time --
`THE COURT:
`You think this will take four hours?
`MR. BUCKNELL: I think, between the direct and
`
`1 2 3 4 5 6 7 8 9
`
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`
`UA-1020.007
`
`
`
`Case 1:07-cv-00551-GMS Document 163 Filed 06/26/09 Page 49 of 74 PageID #: 3288
`49
`
`the cross and the rebuttal, it will take four hours, and
`additionally, at a substantial expense to Par to have their
`economics expert here to listen to the other witnesses and
`to prepare for his own testimony.
`THE COURT:
`Okay. Is that it?
`MR. BUCKNELL: Unless Your Honor has additional
`
`questions.
`
`Not at the moment.
`THE COURT:
`MR. TURNER: Your Honor, I was surprised to hear
`that the case law doesn't establish how to show nexus,
`because it most certainly does. We cited the case Brown &
`Williamson, it's 229 F.3d, 1120, Federal Circuit decision:
`Nexus is presumed where the product encompassed the claim
`features.
`
`That is how our experts have established nexus.
`Dr. Banker has provided claim charts showing that Par's
`proposed products practice the claims.
`He has also opined
`that those products in all material respects are identical
`to Zegerid, the plaintiffs' product. So it is certain that
`Zegerid embodies the claims. And, therefore, nexus is
`presumed.
`
`Our experts don't need to do anything more than
`that, but they have. Dr. Fennerty has gone beyond that. He
`has explained how the claimed features enable certain unique
`properties and enable this product to meet long-felt needs
`
`1 2 3 4 5 6 7 8 9
`
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`
`UA-1020.008
`
`
`
`Case 1:07-cv-00551-GMS Document 163 Filed 06/26/09 Page 50 of 74 PageID #: 3289
`50
`
`that other PPIs were not able to fully meet. And he links
`that back to the claim features, to the lack of enteric
`coating and the small amount of sodium bicarbonate used in
`our product. And he shows that those, and the testimony of
`our others witnesses will also show, that those features are
`what constitute the majority of Santarus's marketing for
`Zegerid, the plaintiffs' product.
`So this will more than establish that there is a
`nexus between what is claimed and what was sold.
`Now, as to whether commercial success is a
`significant issue in this case...
`It's true that Santarus has had about 366
`million dollars in sales. Santarus is a very small
`pharmaceutical company that brought its PPI into a market
`dominated by pharmaceutical giants. This is an industry
`where one of the competitors has the single biggest selling
`drug of all time, not just in PPIs, the single biggest
`selling drug of all time. That drug started in 1989. Our
`drug started in 2004, a very different, unique formulation
`in 2004. So we need time to convince the market that our
`drug is superior in certain aspects to the other drugs. And
`we have done that. As we have, our sales have increased,
`while our competitors' sales have decreased.
`So certainly, commercial success will be a
`significant issue in this case. Our experts have
`
`1 2 3 4 5 6 7 8 9
`
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`
`UA-1020.009
`
`
`
`Case 1:07-cv-00551-GMS Document 163 Filed 06/26/09 Page 51 of 74 PageID #: 3290
`51
`
`established nexus in multiple ways.
`There is nothing that Par has done to rebut
`They haven't shown that there is not a nexus between
`that.
`Zegerid, plaintiffs' product, and the asserted claims. Once
`we establish our prima facie case of nexus, they have done
`nothing to rebut that.
`THE COURT:
`
`You disagree that there is a prima
`
`facie case?
`
`MR. BUCKNELL: Yes, Your Honor, as explained in
`the briefing, that plaintiffs have misapprehend the law on
`this point.
`
`Brown & Williamson, that case, the language
`cited by plaintiffs discusses a presumption where the patent
`claims are coextensive with the product. And there is no
`evidence or suggestion in this matter that Zegerid is
`coextensive with the patents at issue.
`If this were a new drug that had just been
`discovered, that may be the case. But when you are dealing
`with a combination product, it's never going to be -- I am
`not aware of a situation where it would be coextensive with
`the patent claims -- that the allegations of commercial
`success could be coextensive, because at least in part the
`success of Zegerid is going to be caused by its constituent
`elements, which may or may not be covered by separate
`patents that are not the patents in suit.
`
`1 2 3 4 5 6 7 8 9
`
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`
`UA-1020.010
`
`
`
`Case 1:07-cv-00551-GMS Document 163 Filed 06/26/09 Page 52 of 74 PageID #: 3291
`52
`
`Thus, plaintiffs are not entitled to any
`presumption. And they have not put forward anything to
`establish the connection between the success they see and
`the patents in suit.
`I think plaintiffs have primarily misapprehended
`the law on this point. They are attempting to quote their
`argument and a presumption to which they are not entitled.
`The responsibility of establishing nexus lies solely with
`them.
`There is no basis for suggesting that Par has to
`rebut that presumption.
`THE COURT: We will find out if they can
`establish a nexus at trial. If they can't, in your view,
`after the conclusion of the direct testimony, you should
`move.
`
`I am going to deny the motion without prejudice.
`We have one other motion?
`MS. CARLAN: I will be presenting the motion
`regarding the overbroad testimony of Dr. Fennerty.
`Par asserts two things with respect to Dr.
`either he isn't qualified to opine on a certain
`Fennerty:
`topic, or he did not opine on a certain topic, and
`therefore, he should be precluded from testifying to these
`at trial.
`
`The first one, under the area of not qualified,
`Dr. Fennerty is a medical doctor, and not anything more. He
`
`1 2 3 4 5 6 7 8 9
`
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`
`UA-1020.011
Accessing this document will incur an additional charge of $.
After purchase, you can access this document again without charge.
Accept $ Charge
Still Working On It
This document is taking longer than usual to download. This can happen if we need to contact the court directly to obtain the document and their servers are running slowly.
Give it another minute or two to complete, and then try the refresh button.
A few More Minutes ... Still Working
It can take up to 5 minutes for us to download a document if the court servers are running slowly.
Thank you for your continued patience.
This document could not be displayed.
We could not find this document within its docket. Please go back to the docket page and check the link. If that does not work, go back to the docket and refresh it to pull the newest information.
Your account does not support viewing this document.
You need a Paid Account to view this document. Click here to change your account type.
Your account does not support viewing this document.
Set your membership
status to view this document.
With a Docket Alarm membership, you'll
get a whole lot more, including:
- Up-to-date information for this case.
- Email alerts whenever there is an update.
- Full text search for other cases.
- Get email alerts whenever a new case matches your search.
One Moment Please
The filing “” is large (MB) and is being downloaded.
Please refresh this page in a few minutes to see if the filing has been downloaded. The filing will also be emailed to you when the download completes.
Your document is on its way!
If you do not receive the document in five minutes, contact support at support@docketalarm.com.
Sealed Document
We are unable to display this document, it may be under a court ordered seal.
If you have proper credentials to access the file, you may proceed directly to the court's system using your government issued username and password.
Access Government Site
