Case 2:20-cv-00337-JRG Document 464 Filed 09/16/22 Page 1 of 8 PageID #: 19697
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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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`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 REPLY IN SUPPORT OF ITS MOTION FOR AN EXCEPTIONAL
`CASE FINDING AND ATTORNEY FEES
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`Case 2:20-cv-00337-JRG Document 464 Filed 09/16/22 Page 2 of 8 PageID #: 19698
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`Defendants do not controvert Seagen’s primary basis for arguing exceptionality: that
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`DSC engaged in repeated litigation misconduct to prevent Seagen from obtaining evidence of
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`DSC’s misuse of Seagen’s material. Defendants’ attempt to absolve themselves by pointing at
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`Seagen’s conduct misstates the record, and in any event, cannot excuse DSC’s repeated
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`violations of the Federal Rules of Civil Procedure, the Local Rules, and the Court’s Discovery
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`Order.
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`Defendants’ assertion that “the undisputed record demonstrates that Daiichi Sankyo
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`Japan independently invented and developed the accused product Enhertu®” merely perpetuates
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`DSC’s obscurantism. (Dkt. 447 at 1.) The record amply demonstrates—and the jury implicitly
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`found—that DSC scientists exploited the close collaboration with Seagen and copied protocols
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`from confidential Seagen documents to arrive at the accused product. (See, e.g., Dkt. 380 at
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`84:04–99:16; Dkt. 382 at 105:19–114:17; Dkt. 369 at 6.) Repeating the same false narrative
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`does not make it true, and it certainly does not excuse DSC of the litigation misdeeds and clear
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`evidence of willfulness that warrant an award of attorney fees here.
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`I. ARGUMENT
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`A.
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`DSC’s Litigation Misconduct Renders This Case Exceptional
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`Defendants do not refute that DSC’s obstructionist litigation conduct aimed to prevent
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`Seagen from obtaining evidence that DSC scientists used Seagen’s confidential information in
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`the development of the accused product. This is quintessential exceptional conduct. See, e.g.,
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`ReedHycalog UK, Ltd. v. Diamond Innovations Inc., No. 6:08-cv-325, 2010 WL 3238312, at *7
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`(E.D. Tex. Aug. 12, 2010) (finding exceptionality when the defendant attempted to conceal
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`“relevant and discoverable but damaging documents”). Their only defense for deliberately
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`withholding relevant information is that DSC has already been sanctioned for failing to produce
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`lab notebooks, leaving unanswered why DSC’s general obstructionist conduct—of which the
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`Case 2:20-cv-00337-JRG Document 464 Filed 09/16/22 Page 3 of 8 PageID #: 19699
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`notebook withholding was only one piece—should now be condoned.
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`Defendants’ deposition misconduct is indefensible. Defendants take refuge in an
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`inaccurate recitation of Seagen’s 30(b)(6) deposition topics, but that justification does not
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`withstand scrutiny. DSC agreed to produce “one or more witnesses” not only on the “invention”
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`but also the “research and development” of Enhertu. (Dkt. 447, Ex. 3 at 2, 8, 12.) Defendants
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`concede that Dr. Gormley was “designated to testify on the research and development of
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`Enhertu.” (Id. at 8.) And even assuming DSC designated Dr. Naito to discuss only the
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`“invention of [Enhertu]” in response to Seagen’s Topic 1, DSC further designated him
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`specifically to “testify generally about the formulation, development, or manufacture of
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`[Enhertu]” in response to Seagen’s Topic 2 and the “research and development of [Enhertu]” in
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`response to Seagen’s Topics 8 and 13. (Dkt. 447, at Ex. 3 at 2, 8, 12 (emphasis added); see also
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`Chivvis Decl. at ¶ 3; Ex. A at 6.) Seagen’s questions to Dr. Gormley and Dr. Naito about the
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`role of other DSC scientists in the development of Enhertu were therefore well within the scope
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`of their designated topics. DSC’s preparation of them to give obstructive and misleading
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`answers is inexcusable.1
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`DSC’s reliance on the narrower “invention” topical designation for its witnesses does not
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`save them either. On that subject, Dr. Naito and Dr. Gormley should have testified to at least the
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`roles of Dr. Morita and Dr. Miyazaki. Because they were the scientists responsible for
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`establishing the conjugation chemistry of Enhertu, both Dr. Morita and Dr. Miyazaki are clearly
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`“inventors” under Defendants’ own definition of the term. They are individuals involved with
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`“bringing ideas and technologies together in a novel way to create something new,” and more
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`specifically, with the “step that first resulted in the complete structure of Enhertu as a whole
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`1 Defendants claim that Dr. Gormley had spoken to Dr. Ogitani in preparation for his deposition but Dr. Gormley
`actually testified that he could not definitively recall whether he had and that it was just Dr. Ogitani’s name that he
`recognized. (Chivvis Decl. ¶ 5; Ex. C.)
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`Case 2:20-cv-00337-JRG Document 464 Filed 09/16/22 Page 4 of 8 PageID #: 19700
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`ADC.” (Dkt. 447 at 10 n. 15 (emphasis added).) Both are also listed as inventors on patents that
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`Defendants’ own expert admits cover Enhertu. (Dkt. 381 at 68:22–70:08; DX-691–DX-693.)
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`Contrary to DSC’s inaccurate portrayal, Dr. Naito was not the “sole inventor” of Enhertu.
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`Nor can Defendants defend DSC’s obstructive use of privilege. Defendants’ claim that
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`Seagen sought the substance of privileged information from Dr. Morita ignores the actual
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`questions Seagen counsel asked, such as when Dr. Morita first informed DSC counsel about his
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`notebooks—a non-privileged line of inquiry. (Dkt. 435 at 10–11.) Seagen’s other questions
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`were also directed to non-privileged information. (Id.) The clear purpose behind DSC’s
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`instructions was thus not to preserve privilege, but to prevent Dr. Morita from testifying that he
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`had long ago informed DSC counsel about the existence of his notebooks.2
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`Defendants also fail to confront DSC’s other instances of obstructionist deposition
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`behavior, and instead, seek to justify DSC’s litigation tactics by accusing Seagen of misconduct.
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`But Seagen’s conduct in the litigation stands in stark contrast to DSC’s. As Seagen explained in
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`its opening motion—and Defendants have not denied—DSC counsel intentionally made lengthy
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`improper speaking objections in depositions to obstruct Seagen’s questioning and to coach its
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`witnesses. (Dkt. 435 at 7–8.) By contrast, Seagen’s conduct, including counsel’s deposition
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`behavior, promoted transparency and full discovery. For example, Seagen encouraged witnesses
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`to be forthcoming (instead of coaching them to obstruct), produced Dr. Peter Senter for two full
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`days of deposition (much more time than DSC allowed for Dr. Naito after accounting for
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`translation), and provided additional witnesses for damages-related discovery even after the close
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`of fact discovery (rather than refusing to produce witnesses until compelled to do so). (Chivvis
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`2 Defendants assert that Dr. Gormley could not review lab notebooks because DSC did not know about them until
`Dr. Morita’s deposition. (Dkt. 447 at 9 n. 12.) By inappropriately preventing Seagen’s inquiry into when the
`notebooks were first disclosed to counsel, however, DSC has no basis to establish that it had not known about the
`lab notebooks before Dr. Morita’s deposition. DSC cannot now seek to excuse one instance of misconduct
`(Dr. Gormley’s inadequate preparation) with another (inappropriate privilege objections).
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`Case 2:20-cv-00337-JRG Document 464 Filed 09/16/22 Page 5 of 8 PageID #: 19701
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`Decl. at ¶¶ 2–4; Exs. A, B.) Seagen also readily acknowledged that it drafted its claims to cover
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`the accused product. (Dkt. 378 at 178:19–179:01.) Regardless, as this Court has held, a party
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`cannot defend against a charge of exceptionality by pointing to the prevailing litigant’s alleged
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`misdeeds. See, e.g., Tinnus Enters., LLC v. Telebrands Corp., 369 F. Supp. 3d 704, 746 (E.D.
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`Tex. 2019) (Defendant’s conduct warranted exceptional case finding even though plaintiff’s
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`conduct was “not immune from criticism.”).
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`B.
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`Defendants’ Litigation Defenses Were Not “Proper and Reasonable”
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`Defendants’ opposition fails to show that they pursued proper and reasonable defenses.
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`They argue that DSC’s “non-infringement position remained strong” even after claim
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`construction. (Dkt. 447 at 5.) But that assertion does not square with the evidence adduced at
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`trial. DSC’s own statements in its FDA submissions, scientific publications, and public
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`presentations show that Enhertu meets the “free drug” and “intracellular cleavage” limitations,
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`because they use precisely those terms to describe Enhertu. (Dkt. 380 at 76:07–80:03; see also
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`PX-0157 at 7; PX-0158; PX-0160 at 5; PX-0161 at 18; PX-0163 at 4; PX-0168 at 6; PX-0256 at
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`38; PX-0978 at 6; PX-1049 at 14; PX-1137 at 7; PX-1139 at 1.) Hairsplitting that these words
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`can mean different things in different contexts does not create a “strong” defense.
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`II. DSC’S “UNDISPUTED” BACKGROUND FACTS ARE IRRELEVANT AND
`INCOMPLETE
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`Defendants’ supposed “Undisputed Background Facts” are irrelevant to the present
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`motion. The question is whether Defendants engaged in conduct that renders this case
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`exceptional—not whether Defendants had a competing narrative that the jury rejected. In any
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`event, Defendants’ background leaves out facts from the Court’s own findings or that the jury
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`implicitly found in Seagen’s favor at trial. For example, Defendants assert that DSC invented
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`and began development of Enhertu “eight years before Seagen filed the ’839 application,” yet
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`they omit that DSC began developing Enhertu during its collaboration with Seagen, (Dkt. 380 at
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`Case 2:20-cv-00337-JRG Document 464 Filed 09/16/22 Page 6 of 8 PageID #: 19702
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`84:12–23), and that Dr. Morita and Dr. Miyazaki—both of whom were directly involved in the
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`collaboration—used Seagen’s confidential information in developing aspects of Enhertu that
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`meet limitations of the asserted claims (see, e.g., Dkt. 380 at 84:04–99:16; Dkt. 382 at 105:19–
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`114:17). Defendants further suggest that the timing of Seagen’s ’839 application was improper,
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`omitting that Seagen regularly prosecuted continuation applications claiming priority to the
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`November 5, 2004 priority application. (Dkt. 380 at 40:07–41:14; Dkt. 431 at ¶¶ [FF 9]–[FF 15],
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`[FF 17]–[FF 21], [CL 17].) DSC’s statement regarding the European Patent Office is also
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`irrelevant as the EPO uses different standards than the USPTO, and the Court properly excluded
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`EPO proceedings as evidence. (Dkt. 406-3 ¶ 50.) Seagen nonetheless disclosed to the USPTO
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`the counterpart EPO proceedings, as well as articles regarding Enhertu that Defendants alleged
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`were prior art, and the examiner expressly considered them before issuing the ’039 patent. (PX-
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`0002 at 59; PX-0001 at 7.) The fuller picture only supports the exceptionality of DSC’s
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`litigation conduct.3
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`As to whether Defendants’ background narrative might be relevant to willfulness, their
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`main argument is that the jury’s finding is erroneous as a matter of law. This is incorrect, as
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`Seagen will argue in its opposition to Defendants’ Rule 50(b) motion on that issue.
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`II.
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`CONCLUSION
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`DSC’s motivation to deny Seagen discovery is now apparent from its tacit concession:
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`DSC intended to prevent Seagen from obtaining evidence of its misuse of Seagen’s material.
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`That obstructionism is simply incompatible with the Federal Rules of Civil Procedure, the Local
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`Rules, and the Court’s Discovery Order. The Court should declare the case exceptional.
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`3 Seagen disagrees with the characterization of its pre-issuance damages claim. But regardless of the merits of that
`claim, Seagen’s decision to focus the litigation by dropping that claim stands in stark contrast to Defendants’
`continual repackaging of its invalidity positions. (Dkt. 435 at 13.)
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`Case 2:20-cv-00337-JRG Document 464 Filed 09/16/22 Page 7 of 8 PageID #: 19703
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`Dated: August 25, 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
`Of Counsel:
`T. John Ward, Jr.
`Texas State Bar No. 00794818
`jw@wsfirm.com
`Wesley Hill
`Texas State Bar No. 24032294
`wh@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 464 Filed 09/16/22 Page 8 of 8 PageID #: 19704
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`CERTIFICATE OF SERVICE
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`The undersigned hereby certifies that counsel of record who are deemed to have
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`consented to electronic services are being served with a copy of this document via the Court’s
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`CM/ECF system per Local Rule CV-5(a)(3) on this the 25th day of August, 2022.
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`/s/ Melissa R. Smith
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