Case 2:20-cv-00337-JRG Document 271 Filed 01/26/22 Page 1 of 10 PageID #: 10555
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`FILED UNDER SEAL PURSUANT TO PROTECTIVE ORDER
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`IN THE UNITED STATES DISTRICT COURT
`EASTERN DISTRICT OF TEXAS
`MARSHALL DIVISION
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`Civil Action No. 2:20-CV-00337-JRG
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`FILED UNDER SEAL
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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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`ASTRAZENECA PHARMACEUTICALS LP, and
`ASTRAZENECA UK LTD,
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` Intervenor-Defendants.
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`SEAGEN’S RENEWED MOTION FOR SANCTIONS
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`sf-4662792
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`Case 2:20-cv-00337-JRG Document 271 Filed 01/26/22 Page 2 of 10 PageID #: 10556
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`FILED UNDER SEAL PURSUANT TO PROTECTIVE ORDER
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`I.
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`INTRODUCTION
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`Seagen renews its motion for sanctions for DSC’s discovery malfeasance. DSC has
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`repeatedly flouted its obligation to produce relevant documents pursuant to this Court’s orders
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`and misrepresented its discovery compliance to Seagen and the Court. At the outset of this case,
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`Seagen requested from DSC documents reflecting the development of the accused product,
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`Enhertu (also known as DS-8201
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`). DSC refused to produce them. Seagen was
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`thus forced to seek the Court’s assistance to obtain these relevant documents, not once, not twice,
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`but three separate times. Seagen only withdrew its first two motions upon DSC’s representations
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`to the Court, in April 2021, that it would search for and produce these documents, and in
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`November 2021, that it had searched for them and its production was complete. As we now
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`know, both representations were false.
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`After the close of fact discovery, DSC scientist Dr. Koji Morita revealed in his Court-
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`ordered deposition that lab notebooks—containing the very information Seagen had sought—
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`exist and had not been produced. Seagen immediately requested them, but DSC still did not
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`produce them. Only after Seagen filed its third motion to compel did DSC finally produce these
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`documents—documents which it should have produced a year ago. What motivation would DSC
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`have to withhold these documents? The answer is clear: the notebooks show that DSC scientists
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`directly referenced Seagen technology in the development of the accused product. DSC’s failure
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`to comply with its discovery obligations and its misrepresentations are blatant violations of this
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`Court’s rules and put its compliance with the discovery process more generally into doubt. This
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`conduct should not go unpunished.
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`II.
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`BACKGROUND
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`After nearly a year of extensive motion practice, DSC produced, from December 16 to 19,
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`eleven laboratory notebooks, including those belonging to DSC scientists Drs. Hideki Miyazaki,
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`Yuji Kasuya, and Koji Morita. Drs. Miyazaki, Kasuya, and Morita are named inventors on the
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`patents that DSC acknowledges cover the accused product, Enhertu® or DS-8201. (See Ex. A at 4
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`[Lambert Rebuttal Report].) Their notebooks describe
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`Morita acknowledged in his deposition,
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` The notebooks confirm
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` As Dr.
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`From the outset of this case, Seagen requested all documents related to DSC’s development
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`of DS-8201, which DSC should have already been collecting pursuant to the Court’s Discovery
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`Order and Local Rule CV-26(d). (See Ex. A at 5 [Seagen Disc. Letter].) Seagen also specifically
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`requested development documents that refer to Seagen. (See id.) DSC refused to produce them.
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`On April 16, 2021, Seagen filed a motion to compel their production. (Dkt. 79.) DSC negotiated
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`for the withdrawal of the motion, agreeing in a Court filing to search for and produce documents
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`“that reflect the research and development work for Enhertu, which includes the linker used in
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`Enhertu.” (Dkt. 92.) DSC also agreed to search for and produce “documents created through
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`December 2015 from Toshinori Agatsuma, Toshiaki Ohtsuka, Kimihisa Ichikawa, Koji Morita,
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`Hideki Miyazaki, Yuji Suzuki, and Toshimasa Jindo that reflect their work, if any, relating to ADC
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`linkers” and documents that “refer to Seattle Genetics, SGI, Seagen, or any other name used within
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`Daiichi Sankyo Japan to refer to Seagen or any of Seagen’s ADC research and development work,
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`including documents that refer to information obtained from Seagen.” (Id. (emphasis added).)
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`Seagen’s withdrawal of its April 16 motion and this Court’s Order granting that withdrawal
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`were predicated on DSC’s compliance with its commitment to produce these documents. (See Dkt.
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`92; Dkt. 93.) But despite months of delays and substantial further meet and confer, DSC continued
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`to withhold relevant documents responsive to these requests. Seagen renewed its motion to compel
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`on October 29, 2021. (Dkt. 187.) DSC then produced some documents Seagen identified by name,
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`but a gap in the production record from 2009 through January 2012 still remained. Seagen
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`suspected there were unproduced documents from this timeframe. DSC’s lead counsel, however,
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`certified in writing to Seagen and the Court that DSC had “searched the files of Drs. Masuda,
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`Morita, Miyazaki, and Kasuya, and produced all responsive documents to Seagen’s revised
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`requests, including to the extent any such documents exist: (1) documents that show how DSC
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`developed its protocols for conjugating the DS-8201 linker to cysteine amino acids and (2) how it
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`selected the components in the DS-8201 linker from December 2009 until January 2012.” (See Ex.
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`A at 5 [DSC Email]; Dkt. 225.) Based on this certification, Seagen withdrew its renewed motion.
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`DSC’s certification was false, as revealed in the Court-ordered deposition of Dr. Morita.
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`(Dkt. 230.) Contrary to DSC’s narrative (Dkt. 198 at 1), Dr. Morita testified
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` He further testified that,
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` He explained that
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`All of these notebooks fell within the gap period and had not been produced. Seagen
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`immediately requested them from DSC and was rebuffed. (Dkt. 234 at Ex. B.) Thus, Seagen was
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`forced to again seek the Court’s assistance in compelling the production of these documents. DSC
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`continued to withhold them until the day of the Court’s scheduled hearing. (Dkt. 245.) Why?
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` As noted above,
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`The Court ordered a further deposition of Dr. Morita.2 (Dkt. 251.)
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`III.
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`ARGUMENT
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`Rule 37 permits a court to sanction a party that “fails to obey an order to provide or permit
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`discovery.” Fed. R. Civ. P. 37(b)(2)(A). Sanctions “must be applied diligently both ‘to penalize
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`those whose conduct may be deemed to warrant such a sanction, and to deter those who might be
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`tempted to such conduct in the absence of such a deterrent’.” Pers. Audio, LLC v. Apple, Inc., No.
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`9:09CV111, 2011 WL 6148587, at *2, 6 (E.D. Tex. June 16, 2011) (“While a court must
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`scrupulously avoid abusive sanctions, when a pattern of obstructionist conduct emerges the court
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`2
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`should not hesitate to act.”) (cleaned up). Rule 37 requires an award of fees absent a showing that
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`the party’s position was “substantially justified.” Fed. R. Civ. P. 37(b)(2)(C). Rule 26 provides
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`that a court must sanction party if it provides a false certification. Fed. R. Civ. P. 26(g)(3). This
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`Court also has inherent authority to sanction a party for failing to follow its orders. Ceats, Inc. v.
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`TicketNetwork, Inc., No. 2:15-CV-01470-JRG, 2021 WL 3738847, at *2 (E.D. Tex. Aug. 24, 2021)
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`(“The Court may use its inherent authority to sanction conduct that is ‘in direct defiance of
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`the sanctioning court’ or constitutes ‘disobedience to the orders of the Judiciary’.”).
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`DSC’s failure to produce the lab notebooks of Drs. Miyazaki and Morita violated this
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`Court’s Discovery Order. That Order mandates that all parties “produce or permit the inspection of
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`all documents, electronically stored information, and tangible things in the possession, custody, or
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`control of the party that are relevant to the pleaded claims or defenses involved in this action.”
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`(Dkt. 51.)
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` Thus, there is no doubt that the notebooks are relevant and should
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`have been produced, even without a request from Seagen.3 See Weatherford Tech. Holdings, LLC
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`v. Tesco Corp., No. 2:17-CV-00456-JRG, 2018 WL 4620634, at *2 (E.D. Tex. Apr. 27, 2018);
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`ICON Health & Fitness, Inc. v. Horizon Fitness, Inc., No. 5:08CV26, 2009 WL 10677745, at *3
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`(E.D. Tex. Mar. 16, 2009) (finding “research and development documents relevant”).
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`3 The lab notebooks are relevant for other reasons. They directly rebut DSC’s narrative that Dr. Naito was the only
`scientist responsible for the development of DS-8201 and DSC’s defense that it had independently developed its ADCs
`without relying on Seagen. DSC’s copying of Seagen’s technology is also relevant to Seagen’s claims of willful
`infringement. See, e.g., Barry v. Medtronic, Inc., 250 F. Supp. 3d 107, 112, 114 (E.D. Tex. 2017) (explaining that
`copying of “the ideas or design of another” is relevant to willfulness and enhanced damages “regardless of when [the]
`patents might have issued.”); see also X-Tra Light MFG Inc. v. Acuity Brands, Inc., No. CIVA H-04-1413, 2007 WL
`7117888, at *3 (S.D. Tex. Feb. 13, 2007) (admitting evidence of pre-issuance copying because “copying is relevant to
`the willfulness determination.”).
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`DSC also failed to abide by its commitment to search for and produce these documents that
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`predicated the Court-ordered withdrawal of Seagen’s first motion to compel. That makes two Court
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`orders DSC violated. But DSC’s misconduct continued. It certified to Seagen and this Court that it
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`had searched the files of Drs. Morita and Miyazaki and produced “all responsive documents . . . that
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`show how DSC developed its protocols for conjugating the DS-8201 linker to cysteine amino acid.”
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`(see Ex. A at 5 [DSC Email].) At that time DSC may have searched for responsive documents, but
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`it certainly had not produced them. This false certification alone warrants sanctions.4 Weatherford
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`Tech. Holdings, 2018 WL 4620634, at *2-*3 (granting sanctions against Tesco for misrepresenting
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`that “all documents responsive to the document request and that answered Weatherford’s
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`interrogatories have been produced”) (cleaned up); see also Imperium IP Holdings (Cayman), Ltd.
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`v. Samsung Elecs. Co., 203 F. Supp. 3d 755, 764 (E.D. Tex. 2016). And the pattern of obstruction
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`did not end there, as Seagen had to file a third motion to compel before DSC finally produced the
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`notebooks. DSC’s misconduct persisted even through the deposition of Dr. Morita last week.5
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`There is no excuse for how this all unfolded. Seagen suspected documents like these
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`4 DSC’s counsel may claim that they did not know these lab notebooks existed before Dr. Morita’s deposition.
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` v. Admin. Rev. Bd., 423 F.3d 483, 497 (5th Cir. 2005) (“[A] party may not use privileged information
`both offensively and defensively at the same time.”) Moreover, any such claim should be greeted with suspicion. Drs.
`Morita and Miyazaki are inventors on patents relating to DS-8201 and individuals from whom Seagen specifically
`requested documents.
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` Even if DSC’s counsel somehow missed these notebooks, the
`discovery obligation is DSC’s and DSC should have provided these documents to its counsel for production in the first
`place. See, e.g., Cummins-Allison Corp. v. Glory Ltd., No. 2:03-CV-358 (TJW), 2006 WL 8441019, at *1 (E.D. Tex.
`Jan. 23, 2006) (“Glory’s response is full of representations that Glory’s counsel was not purposefully delinquent and the
`Court accepts those statements as true. However, Glory itself has offered no explanation for not providing these
`documents earlier.”) (emphasis in original).
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` But as Seagen reminded DSC, the date of this awareness,
`and whether DSC and its counsel were aware are legitimate lines of inquiry. In re Norplant Contraceptive Prods. Liab.
`Litig., No. MDL 1038, 1996 WL 42053, at *3 (E.D. Tex. Jan. 19, 1996) (“When a privilege is claimed, the witness
`should nevertheless answer questions relevant to the existent, extent, or waiver of the privilege, such as the date of a
`communication, who made the statement, to whom and in whose presence the statement was made, and the identity of
`other persons to whom the contents of the statement have been disclosed.”); see also Motorola Sols., Inc. v. Hytera
`Commc'ns Corp., No. 17 C 1973, 2019 WL 2774126, at *2 (N.D. Ill. July 2, 2019) (“Courts have consistently held that
`the facts surrounding attorney-client communications, including the fact that they occurred, their dates, topics and
`subject matter are discoverable and not privileged.”).
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`existed, and requested them early in this case, but was only able to obtain them after repeated
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`motion practice, well after the fact discovery deadline. The Court should not let this type of
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`misconduct go unpunished. Pers. Audio, 2011 WL 6148587, at *6 (Sanctions are proper where a
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`party has engaged “a pattern of failing to meet its obligations to search its records and files and
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`question those employees known to have information); see also Cummins-Allison Corp., 2006 WL
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`8441019, at *1 (sanction appropriate where relevant documents were produced “nearly two months
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`after the discovery deadline,” as such delay “indicates a willing and purposeful violation of this
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`Court’s Discovery Orders and the Patent Rules.”).
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`While Rule 37 requires payment of fees and costs to Seagen under these circumstances,
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`DSC’s repeated violations warrant more significant sanctions. Here, a jury instruction on DSC’s
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`discovery failures is appropriate. z4 Techs., Inc. v. Microsoft Corp., No. 6:06-CV-142, 2006 WL
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`2401099, at *18 (E.D. Tex. Aug. 18, 2006), aff'd, 507 F.3d 1340 (Fed. Cir. 2007) (“The Court
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`properly instructed the jury . . . as a sanction against [defendant] for not producing [an] email,
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`which should have been produced much earlier.”). And because neither Seagen nor this Court can
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`have confidence that DSC has not withheld other documents that refer to Seagen, the Court should
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`also probe DSC’s discovery compliance. Hence, Seagen requests the following sanctions:
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`1) an instruction that, in the discovery phase of the case, DSC withheld evidence on the
`use of Seagen information in the development of the accused product, and that the
`jury may consider this in determining whether the accused product infringes, the
`value of the invention, and whether DSC knew it would infringe;6
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`2) testimony before the Court from a DSC representative to explain DSC’s search and
`review process for relevant documents responsive to Seagen’s requests, including
`when DSC first became aware of the notebooks and whether DSC has now produced
`all relevant documents reflecting reference to or use of Seagen technology in its
`ADC linker development; and
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`3) Seagen’s fees and costs for its three motions compelling production of linker
`development documents, the motion to compel the deposition of Dr. Morita, the
`depositions of Dr. Morita, and this motion.
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`6 Alternatively, the Court could permit Seagen to inform the jury of DSC’s withholding of the laboratory notebooks at
`trial. Pers. Audio, 2011 WL 6148587, at *7.
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`Dated: January 21, 2022
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`By: /s/ Michael A. Jacobs
`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
`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
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`Of Counsel:
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`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
`Attorneys for Plaintiff Seagen Inc.
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`CERTIFICATE OF SERVICE
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`The undersigned hereby certifies that all counsel of record who are deemed to have consented
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`to electronic service are being served with a copy of the foregoing document via the Court’s CM/ECF
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`system per Local Rule CV-5(a)(3) this 21st day of January, 2022.
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`/s/ Melissa R. Smith
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`CERTIFICATE OF AUTHORIZATION TO FILE UNDER SEAL
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`I hereby certify that the foregoing document is authorized to be filed under seal pursuant to
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`the Protective Order entered in this case.
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`/s/ Melissa R. Smith
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