Case 2:20-cv-00337-JRG Document 101 Filed 06/02/21 Page 1 of 8 PageID #: 3514
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`IN THE UNITED STATES DISTRICT COURT
`EASTERN DISTRICT OF TEXAS
`MARSHALL DIVISION
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`SEAGEN INC.,
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`v.
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`Plaintiff,
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`DAIICHI SANKYO CO., LTD.,
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`Defendant.
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`Civil Action No. 2:20-CV-00337-JRG
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`SEAGEN INC.’S SUPPLEMENTAL OPPOSITION TO DAIICHI SANKYO CO.,
`LTD.’S RULE 12(B) MOTION TO DISMISS FOR LACK OF SUBJECT MATTER
`JURISDICTION AND LACK OF PERSONAL JURISDICTION
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`Case 2:20-cv-00337-JRG Document 101 Filed 06/02/21 Page 2 of 8 PageID #: 3515
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`I.
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`INTRODUCTION
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`The additional jurisdictional discovery that Daiichi Sankyo Co., Ltd. (“DSC”) produced
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`pursuant to the Court’s order confirms that the Court should deny the Motion to Dismiss. DSC
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`delivered Enhertu into the stream of commerce with the expectation that it will be purchased by
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`consumers in Texas. DSC’s additional documents also confirm that Enhertu is indeed sold in
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`Texas, resulting in substantial sales in Texas since October 20, 2020. Newly disclosed
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`information also shows that DSC has been negotiating with a manufacturer in Texas to produce
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`the antibody used in Enhertu.
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`II.
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`ARGUMENT
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`A.
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`New Evidence Confirms This Court May Exercise Specific Personal
`Jurisdiction Over DSC Under The “Stream of Commerce” Theory
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`DSC is subject to personal jurisdiction because it purposefully avails itself of this forum.
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`The Court ordered DSC to produce documents showing DSC’s revenues from sales of Enhertu in
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`Texas. (Dkt. 81 at 3-4.) DSC’s production shows substantial sales of Enhertu in Texas. DSC
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`also confirmed its efforts to import Enhertu into the United States and place it into the stream of
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`commerce with the expectation and knowledge that it be available for purchase in Texas. See
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`Semcon IP Inc. v. TCT Mobile Int’l Ltd., No. 2:18-CV-00194-JRG, 2019 WL 2774362, at *3–4
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`(E.D. Tex. July 2, 2019).
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`New Data Show Substantial Sales in Texas: Newly obtained sales data confirm that
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`DSC—through its U.S. subsidiary Daiichi Sankyo, Inc. (“DSI”) and its distributors—makes
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`consistent and significant sales of Enhertu in Texas. From October 20, 2020 to May 3, 2021,
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`DSC sold 3,940 units of Enhertu to end purchasers in Texas. (Ex. 30.) At a per unit price of
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`$2,295.97, this amounts to revenues of $9,046,121.80 in less than seven months. (Id.; Ex. 31
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`(showing unit price of $2,295.97).) The sales volume of Enhertu in Texas is the fourth highest of
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`Case 2:20-cv-00337-JRG Document 101 Filed 06/02/21 Page 3 of 8 PageID #: 3516
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`any state, behind only California, New York, and Florida. (Ex. 30.) Third-party discovery also
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`confirms sales of Enhertu to end customers in Texas. Sales data produced by non-party ASD
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`Specialty Healthcare, LLC, one of DSC’s U.S. distributors based in Carrollton, Texas, show it
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`made $1,009,274.08 in sales of Enhertu in Texas from November 2020 to April 2021. (Ex. 32.)
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`The exercise of personal jurisdiction over DSC is fair because DSC derives significant
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`benefit from the sale of Enhertu in Texas, and based on those sales figures, DSC knew or
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`reasonably could have foreseen that Texas was a likely termination point when it manufactured
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`and imported Enhertu. See AGIS Software Dev. LLC v. HTC Corp., No. 2:17-CV-00514-JRG,
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`2018 WL 4680557, at *2, *4 (E.D. Tex. Sept. 28, 2018).
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`New Evidence Confirms DSC Control of Supply Chain: Where it previously
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`equivocated, DSC now confirms through newly supplemented discovery responses that it
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`imports Enhertu into the United States. DSC now confirms that:
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`• DSC is “responsible for delivering Bulk Vials ordered under this Agreement to DSI
`or its nominee at the location(s) within the United States designated by DSI.” (Ex.
`33 [Suppl. Resp. to Rog 2].)
`• DSC is “responsible for all transportation costs for the supply of Bulk Vials.” (Id.)
`• DSC “shall bear the risk of loss for the shipped Bulk Vials until delivery to DSI or its
`nominee.” (Id.)
`• DSC or its designee “shall inform DSI by e-mail of the delivery schedule for every
`shipment of the Bulk Vials from Daiichi Sankyo [Japan] or its designated
`manufacturer prior to shipping.” (Id.)
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`These admissions are consistent with the “DDP” or “Delivery Duty Paid” designation on
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`the shipments of Enhertu to DSI, where DSI does not take possession of the Enhertu until it
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`arrives in Allentown, Pennsylvania, after it arrives in the U.S. through John F. Kennedy
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`International Airport. (Dkt. 67-9; Ex. 34 at 265:2-14; Ex. 33 [Suppl. Resp. to Rog 2].)
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`The evidence establishes that DSC does not merely place Enhertu in the stream of
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`commerce, with the Enhertu “fortuitously reaching” Texas. Polar Electro Oy v. Suunto Oy, 829
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`Case 2:20-cv-00337-JRG Document 101 Filed 06/02/21 Page 4 of 8 PageID #: 3517
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`F.3d 1343, 1351 (Fed. Cir. 2016). In fact, the Supply Chain functional unit is led by a DSC
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`employee. (Ex. 34 at 294:4–12.) DSC “act[s] in consort” with its wholly-owned subsidiary DSI
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`and third-party distributors to deliberately ship Enhertu to Texas, where it sells millions of
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`dollars of product. See Semcon, 2019 WL 2774362, at *4.
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`B.
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`New Evidence Confirms This Court May Exercise Specific Personal
`Jurisdiction Over DSC Under An Agency Theory
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`Jurisdictional discovery has further revealed a lack of corporate separation and DSC’s
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`control of its wholly-owned subsidiary, DSI, as it relates to Enhertu.
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`Organization Structure: Newly produced organization charts demonstrate the extent to
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`which the operations of DSC and DSI are closely intertwined. For example, Ken Keller is the
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`President and CEO of DSI, “amongst other titles.” (Ex. 33 [Suppl. Resp. to Rog 2]; Ex. 34 at
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`249:18–21.) One of those other titles is Head of Oncology Business Unit, a role in which he
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`reports directly to Sunao Manabe, CEO of DSC. (Ex. 35 at DSC_ENHERTU_00056205; Ex. 34
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`at 249:8–17.) In Mr. Keller’s capacity as Head of Oncology Business Unit, his direct reports
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`include both DSI and DSC employees. For example, Mr. Keller’s direct reports include Daniel
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`Switzer, the Head of US Oncology Business Division and employee of DSI, as well as Kenji
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`Shigeta, the Head of Oncology Alliance Management, and an employee of DSC. (Ex. 35 at
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`DSC_ENHERTU_00056205; Ex. 36 at 264:12–25.)
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`These organization charts further show DSC’s control over DSI as it relates to the supply
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`chain for Enhertu. As of April 1, 2021, DSI’s Supply Chain & Technical Operations is part of
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`the global “Supply Chain” functional unit. (Ex. 34 at 292:16–293:9; Ex. 37.) The Supply Chain
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`functional unit is led by a DSC employee, Mr. Fukutai (Ex. 34 at 294:4–12.)
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`JRCC-US: In addition to the evidence of DSC’s oversight of the US Joint Regional
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`Commercialization Committee (“JRCC-US”) noted in Seagen’s prior briefing, DSC confirmed
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`Case 2:20-cv-00337-JRG Document 101 Filed 06/02/21 Page 5 of 8 PageID #: 3518
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`an additional point of oversight during its recent 30(b)(6) deposition. In the event of a tie vote
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`on an action of the JRCC-US, an issue would escalate to the Joint Commercialization
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`Committee. (Ex. 36 at 336:16–24.) As discussed in Seagen’s sur-reply, DSC makes up half the
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`members of the Joint Commercialization Committee, and that committee is the creation of DSC
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`and AstraZeneca UK. (See Sur-reply at 5; Dkt. 67-26 at DSC_ENHERTU_00025386–387, -
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`397.) Thus, DSC personnel retain ultimate oversight over decisions made by the JRCC-US.
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`DSC’s exercise of control over DSI, as well as its comingling of corporate roles and
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`responsibilities, demonstrate that DSC’s actions go beyond that of a typical parent-subsidiary
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`relationship, such that the exercise of jurisdiction is proper. Cf. Fellowship Filtering Techs., LLC
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`v. Alibaba.com, Inc., No. 2:15-cv-2049-JRG, 2016 WL 6917272, at *2 (E.D. Tex. Sept. 1, 2016).
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`C.
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`This Court Has Personal Jurisdiction Over DSC As An Indirect Infringer
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`The evidence establishes that DSC intends acts to occur that result in infringement in
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`Texas. (Opp’n at 12–13; Sur-reply at 6–7.) This is further supported by the substantial sales of
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`Enhertu in Texas. See supra, Section II.A.
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`D.
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`This Court Has Personal Jurisdiction Over DSC Under Rule 4(k)(2)
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`As Seagen previously argued, this Court can exercise personal jurisdiction over DSC
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`under Rule 4(k)(2). (Opp’n at 16–17; Sur-reply at 7–8.) No new evidence shows otherwise.
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`E.
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`DSC’s Newly Disclosed Planned Manufacturing Ties to Texas
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`Finally, DSC disclosed for the first time on May 14 that it is currently in the process of
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`negotiating a commercial supply agreement with Fujifilm Diosynth Biotechnologies Texas, LLC
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`(“Fujifilm”) regarding the manufacture of the antibody used in Enhertu, MAAL-9001:
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`Trastuzumab. (Ex. 33 [Suppl. Resp. to Rog 5].) Fujifilm’s principal place of business is in
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`College Station, Texas and the manufacturing would take place there. (Id.; Ex. 38.)
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`At least two DSC employees from the Oncology Development Group have visited
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`Case 2:20-cv-00337-JRG Document 101 Filed 06/02/21 Page 6 of 8 PageID #: 3519
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`Fujifilm’s facilities in Texas in connection with the negotiation.1 (Ex. 36 at 313:9–15, 314:22–
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`315:8.) DSI is not a party to these negotiations or agreement. (Id. at 315:12–15, 318:7–9.)
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`Negotiations with Fujifilm have been proceeding since at least 2019, as evidenced by a letter
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`agreement dated November 26, 2019. (Ex. 38.) The resulting Master Services Agreement was
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`executed by Masayuki Yabuta, the Head of Biologics Division of DSC, on December 22, 2020.
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`(Ex. 39 at DSC_ENHERTU_00289449; Ex. 36 at 319:3–24.) Although these negotiations pre-
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`date the Complaint, DSC did not disclose this business relationship until May 14, 2021.
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`The years-long negotiations and the executed Master Services Agreement for
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`manufacturing activity in Texas—along with the additional ties as described above and in
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`Seagen’s prior briefing—make the exercise of personal jurisdiction fair, reasonable, and
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`foreseeable. See Burger King, 471 U.S. at 479 (1985) (“It is these factors—prior negotiations
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`and contemplated future consequences, along with the terms of the contract and the parties’
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`actual course of dealing—that must be evaluated in determining whether the defendant
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`purposefully established minimum contacts within the forum.”).
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`III. CONCLUSION
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`This Court should deny DSC’s motion to dismiss for lack of subject matter jurisdiction
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`and lack of personal jurisdiction.
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`1 In a correspondence sent at 9:02 PM CT on May 25th, the evening before the due date for this
`brief, counsel for DSC claims its 30(b)(6) witness was “mistaken.” (Chivvis Decl. ¶ 12.) DSC
`has not provided any corrections to the deposition transcript nor provided any evidence to
`support his argument. (Id.) On the morning this brief was due and twelve days after the court-
`ordered deadline to serve supplemental interrogatory responses (Dkt. 90), DSC served
`“amended” supplemental responses that contradict Mr. Switzer’s sworn testimony. (Id. ¶ 13.) If
`DSC attempts to introduce new evidence in its reply papers, that would be improper and should
`not be considered by the Court. See Narvaez v. Wilshire Credit Corp., 757 F. Supp. 2d 621, 633
`n.11 (N.D. Tex. 2010) (“The Court will not consider arguments or evidence raised for the first
`time in a reply brief.”) Nevertheless, negotiations for an ongoing relationship with a business
`headquartered in the Texas constitute contact with the forum state, regardless where they were
`conducted. See Burger King Corp. v. Rudzewicz, 471 U.S. 462, 479 (1985).
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`Case 2:20-cv-00337-JRG Document 101 Filed 06/02/21 Page 7 of 8 PageID #: 3520
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`Dated: May 26, 2021
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`By: /s/ Melissa R. Smith
`Michael A. Jacobs
`MJacobs@mofo.com
`Matthew A. Chivvis
`MChivvis@mofo.com
`MORRISON & FOERSTER LLP
`425 Market Street
`San Francisco, CA 94105
`Telephone: 415.268.7000
`Facsimile: 415.268.7522
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`Bryan Wilson
`BWilson@mofo.com
`Pieter S. de Ganon
`PdeGanon@mofo.com
`MORRISON & FOERSTER LLP
`755 Page Mill Road
`Palo Alto, California 94304-1018
`Telephone: 650.813.5600
`Facsimile: 650.494.0792
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`Melissa R. Smith
`Texas State Bar No. 24001351
`melissa@gillamsmithlaw.com
`GILLAM & SMITH, LLP
`303 South Washington Avenue
`Marshall, Texas 75670
`Telephone: 903.934.8450
`Facsimile: 903.934.9257
`Of Counsel:
`T. John Ward, Jr.
`Texas State Bar No. 00794818
`jw@wsfirm.com
`Charles Everingham IV
`Texas State Bar No. 00787447
`ce@wsfirm.com
`Andrea L. Fair
`Texas State Bar No. 24078488
`andrea@wsfirm.com
`WARD, SMITH & HILL, PLLC
`1507 Bill Owens Parkway
`Longview, Texas 75604
`Telephone: 903.757.6400
`Facsimile: 903.757.2323
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`Attorneys for Plaintiff Seagen Inc.
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`Case 2:20-cv-00337-JRG Document 101 Filed 06/02/21 Page 8 of 8 PageID #: 3521
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`CERTIFICATE OF SERVICE
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`The undersigned certifies that the foregoing document was filed electronically in
`compliance with Local Rule CV-5(a). Plaintiff’s counsel of record were served with a true and
`correct copy of the foregoing document by electronic mail on May 26, 2021.
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`/s/ Melissa R. Smith
`Melissa R. Smith
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