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Ortho-McNeil Pharmaceutical Inc. v. Lupin Pharmaceuticals

August 28, 2008

ORTHO-MCNEIL PHARMACEUTICAL INC., ORTH-MCNEIL, INC., AND DAIICHI SANKYO CO., LTD. PLAINTIFFS/COUNTERCLAIM-DEFENDANTS,
v.
LUPIN PHARMACEUTICALS, INC., AND LUPIN LTD., DEFENDANTS/COUNTERCLAIM-PLAINTIFFS.



The opinion of the court was delivered by: Brown, C.J.

MEMORANDUM OPINION

This matter comes before the Court upon the appeal of plaintiffs and counterclaim-defendants Orth-McNeil Pharmaceutical, Inc., Ortho-McNeil, Inc., and Daiichi Sankyo Company, Ltd.'s (collectively "Plaintiffs") of Magistrate Judge Bongiovanni's denial of Plaintiffs' motion to compel discovery. Plaintiffs seek an order: (1) overturning Magistrate Judge Bongiovanni's denial of Plaintiffs' motion to compel discovery from defendants and counterclaim-plaintiffs Lupin Pharmaceutical, Inc. and Lupin Ltd. (collectively "Lupin" or "Defendants"); and (ii) compelling Lupin to respond Plaintiffs' outstanding discovery requests. The Court has reviewed the parties' submissions and decided the motion without oral argument pursuant to Federal Rule of Civil Procedure 78. For the reasons set forth below, the Court will deny Plaintiffs' appeal.

I. BACKGROUND

Plaintiffs assert that this matter is a Hatch-Waxman pharmaceutical litigation. In July, 2006, Defendants submitted an Abbreviated New Drug Application ("ANDA") to the Food and Drug Administration ("FDA") seeking approval to commercially manufacture and sell generic levofloxacin. (Declaration of Robert A. Bourque ("Bourque Decl." ), Ex. A.) In Defendants' ANDA, they certified, pursuant to Paragraph IV of the Hatch-Waxman act, that Defendants' manufacture, marketing and sale of generic levofloxacin would not infringe any valid claim of Plaintiffs' U.S. Patent No. 5,053,407 (the '407 patent"). (Id. at Ex. B; Plaint. Br. at 2.) Defendants notified Plaintiffs of their ANDA filing in a letter of September 29, 2008, after which Plaintiffs commenced this litigation, alleging that Lupin's marketing and sale of generic levofloxacin would infringe the '407 patent. (Id.)

Defendants did not argue in their notice letter that the '407 patent was invalid and therefore unenforceable. Rather, Defendants asserted that the '407 patent was not eligible for the extension it was granted by the FDA and the Patent and Trademark Office ("PTO") pursuant to 35 U.S.C. § 156, and therefore should have expired on its original expiration date in October 2008. (Plaint Br. at 4.) According to Defendants, the '407 patent was not eligible for extension because Plaintiffs' marketing of levofloxacin was not the "first permitted commercial marketing or use" of the "product" or "active ingredient" in the product as defined by the statute. (Id.; Def. Br. at 3.); see 35 U.S.C. § 156(a)(5). Specifically, Defendants assert that the active ingredient in Levaquin (covered by the '407 patent) is () ofloxacin, which is an active ingredient in Floxin*fn1 , a prior product approved by the FDA and commercially marketed in the U.S. (Id.) As such, Defendants assert that the extension for the '407 patent is invalid.

Because of Defendants' theory in this case, the parties entered into a stipulation, stating that the sole issue to be tried is limited to "whether the '407 patent is entitled to the term extension granted to it by the [USPTO] pursuant to 35 U.S.C. § 156." (Borque Decl., Ex. C at ¶ 5.) Defendant further stipulated that it would not contest the validity of the '407 patent. (Id.)

Following the stipulation, Plaintiffs served Defendants with various discovery requests, which they maintain fall into one of three categories: (1) requests directed specifically to levofloxacin (the subject of Lupin's ANDA, the compound claimed in the '407 patent and the active ingredient in Levaquin); (2) requests directed to ofloxacin (the reacemic active ingredient in Floxin upon which Lupin relies in its Notice Letter); and (3) requests directed to Lupin's current and past practices with respect to other enantiomers and racemates that it markets or has sought to market." (Plaint. Br. at 5-6.) Defendants objected to the majority of Plaintiffs' discovery requests. In light of this impasse, Magistrate Judge Bongiovanni instructed Defendants to produce a draft of its motion for summary judgment, with the accompanying expert report, to aid Plaintiffs in further gauging their need for discovery. (Id. at 8; Bourque Decl. at Exs. R, S.)

In Defendants' draft summary motion papers, they argue that the '407 patent extension is invalid because it fails to satisfy 35 U.S.C. § 156(a)(5), which requires that the patent at issue be the "first permitted commercial marketing or use of the product" in order for an extension to be granted. Specifically, Defendants argue that the USPTO did not properly construe the terms "product" and "active ingredient" in the statute. Defendants assert that a proper construction of the statute, when applied to the undisputed facts, will demonstrate that the patent extension is invalid. (Id. at Ex. R, 9-10.)

Following Defendants' filing of their draft summary judgment brief, Plaintiffs moved to compel discovery, which was opposed by Defendants. In denying Plaintiffs' motion to compel, Magistrate Judge Bongiovanni defined "the singular substantive issue underlying [the] motion [to be] whether the marketing of the patent in issue was or was not the first permitted commercial marketing or use of the active ingredient" in the patent. This issue, Judge Bongiovanni deemed to be one of statutory construction -- "whether levofloxacin is an 'active ingredient' as defined by statute." Magistrate Judge Bongiovanni further found that "the parties' dispute is one of congressional intent, to wit, whether Congress intended the term 'active ingredient' to encompass the patent in issue." As such, the court found that "the only type of information relevant would be, at most, evidence considered by the drafters in creating § 156 generally and § 156(2) specifically." The court added that "the subjective nature of the information requested by Plaintiff cannot be considered relevant under the Court's rules in determining whether either the plain language of the statute or the congressional intent behind its creation applies to the patent in issue." To the extent Defendants sought to rely on evidence not possessed by Plaintiffs in the summary judgment motion, the court ordered that Defendants turn over said evidence prior to filing its motion. (Docket No. 48.)

II. DISCUSSION

A. Legal Standard

Local Civil Rule 72.1(c)(1)(A) and Federal Rule of Civil Procedure 72(a) provide that a Magistrate Judge's ruling on a non-dispositive motion will be set aside only if the order is "clearly erroneous or contrary to law." See L. CIV. R. 72.1(c)(1)(A); FED. R. CIV. P. 72(a). Such rulings are "entitled to great deference and [are] reversible only for abuse of discretion." Kresefsky v. Panasonic Communs. & Sys. Co., 169 F.R.D. 54, 64 (D.N.J. 1996).

B. Whether Magistrate Judge Bongiovanni erred in denying Plaintiffs' Motion to Compel Discovery

Plaintiffs argue that Magistrate Judge Bongiovanni erred in denying their motion to compel discovery, as "the discovery sought by Plaintiffs is relevant to interpret the term 'active ingredient.'" (Plaint. Br. at 10.) Plaintiffs further argue that the discovery it seeks is "relevant to several material issues of disputed fact related to ofloxacin, levofloxacin, racemates, and enantiomers that the ...


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