The opinion of the court was delivered by: Hon. Dennis M. Cavanaugh
DENNIS M. CAVANAUGH, U.S.D.J.
This matter comes before the Court upon five motions in limine filed by Sanofi Aventis Deutschland Gmbh, Aventis Pharma S.A., Abbott Gmbh, Abbott Laboratories and Abbott Laboratories, Inc. ("ALI") (collectively, "Abbott")(collectively, "Plaintiffs"), and seven motions in limine filed by Defendants Glenmark Pharmaceuticals, Inc., USA and Glenmark Pharmaceuticals, Ltd. (collectively, "Defendants") to dismiss pursuant to Fed. R. Civ. P. 12(b)(1). Pursuant to Fed. R. Civ. P. 78, no oral argument was heard. After considering the submissions of all parties, it is the decision of this Court for the reasons herein expressed that Plaintiffs' motion in limine #1 is granted in part and denied in part, motions in limine #2 and #4 are granted, and motions in limine #3 and #5 are denied, and Defendants' motions in limine #1, #2, #3, #4,#6, and #7 are denied and motion in limine #5 is granted.
A. Federal Rule of Evidence 402 provides: "All relevant evidence is admissible, except as otherwise provided by the Constitution of the United States, by Act of Congress, by these rules, or by other rules prescribed by the Supreme Court pursuant to statutory authority. Evidence which is not relevant is not admissible."
B. Federal Rule of Evidence 403 provides: "Although relevant, evidence may be excluded if its probative value is substantially outweighed by the danger of unfair prejudice, confusion of the issues, or misleading the jury, or by considerations of undue delay, waste of time, or needless presentation of cumulative evidence."
C. Federal Rule of Evidence 702 provides: "If scientific, technical, or other specialized knowledge will assist the trier of fact to understand the evidence or to determine a fact in issue, a witness qualified as an expert by knowledge, skill, experience, training, or education, may testify thereto in the form of an opinion or otherwise, if
(1) the testimony is based upon sufficient facts or data, (2) the testimony is the product of reliable principles and methods, and (3) the witness has applied the principles and methods reliably to the facts of the case."
D. Federal Rule of Evidence 703 provides: "The facts or data in the particular case upon which an expert bases an opinion or inference may be those perceived by or made known to the expert at or before the hearing. If of a type reasonably relied upon by experts in the particular field in forming opinions or inferences upon the subject, the facts or data need not be admissible in evidence in order for the opinion or inference to be admitted. Facts or data that are otherwise inadmissible shall not be disclosed to the jury by the proponent of the opinion or inference unless the court determines that their probative value in assisting the jury to evaluate the expert's opinion substantially outweighs their prejudicial effect."
E. 35 U.S.C. § 284 provides: "Upon finding for the claimant the court shall award the claimant damages adequate to compensate for the infringement, but in no event less than a reasonable royalty for the use made of the invention by the infringer, together with interest and costs as fixed by the court. When the damages are not found by a jury, the court shall assess them. In either event the court may increase the damages up to three times the amount found or assessed. Increased damages under this paragraph shall not apply to provisional rights under section 154(d) of this title. The court may receive expert testimony as an aid to the determination of damages or of what royalty would be reasonable under the circumstances."
F. Federal Rule of Civil Procedure 26(a)(2)(B)(i) provides: "(2) Disclosure of Expert Testimony...(B) Witnesses Who Must Provide a Written Report. Unless otherwise stipulated or ordered by the court, this disclosure must be accompanied by a written report--prepared and signed by the witness--if the witness is one retained or specially employed to provide expert testimony in the case or one whose duties as the party's employee regularly involve giving expert testimony. The report must contain: (i) a complete statement of all opinions the witness will express and the basis and reasons for them."
G. Federal Rule of Civil Procedure 37(c)(1) provides: "If a party fails to provide information or identify a witness as required by Rule 26(a) or (e), the party is not allowed to use that information or witness to supply evidence on a motion, at a hearing, or at a trial, unless the failure was substantially justified or is harmless."
III. PLAINTIFFS' MOTIONS IN LIMINE
A. Plaintiffs' Motion in Limine #1 to Exclude References to Patent Monopoly and Relative Prices of Generic v. Brand Name Drugs Pursuant to Fed. R. Evid. 702 and 703 and Fed. R. Civ. P. 37(c).
Plaintiffs ask this Court to preclude Defendant from informing jury (1) that generic drugs are less expensive, (2) the purpose of Hatch-Waxman is to balance the rights of the innovator with those of generic drug manufacturers, (3) Plaintiff has a patent monopoly, and (4) the expected role of generic drugs in the healthcare reform.
Plaintiffs argue that the above arguments amount to asking the jury to nullify the patent in favor of less expensive generic drugs and that patent exclusivity is unfair, and that the benefits of generic drug pricing are irrelevant to the two issues in the case, namely obviousness and damages. Plaintiffs claim that labeling the patent as a monopoly amounts to asking the jury to nullify the patent statute and find patents are unfair. Plaintiffs claim these arguments are perjorative and misdirected based on case law from the Federal Circuit. Plaintiffs also claim that the process of approval for generic brand drugs, the Hatchman-Waxman balance between innovators and generic, and the alleged role of generic drugs in the healthcare reform are irrelevant.
Defendants make several arguments in opposition to Plaintiffs' Motion in Limine. First, the Defendants contend that the pricing of brand name drugs versus generic drugs is neither prejudicial nor controversial as the difference in pricing is a matter of common sense. Defendants also argue that this information is relevant to the issue of damages as Plaintiffs' expert is expected to testify regarding sales prices of brand name versus generic drugs, price erosion and reasonable royalties. Second, Defendants argue that testimony regarding the Hatch-Waxman regulatory scheme, generic pharmaceutical industry, and the Abbreviated New Drug Application ("ANDA") process provide context and background that is necessary for the case. In support of its position, Defendants cite to a decision of this Court where this Court stated that "testimony concerning Hatch-Waxman and generic drugs likely aid jury in understanding the context." Novartis Pharm. Corp. v. Teva Pharm. USA, Inc., 2009 WL 3754170 (D.N.J. Nov. 5, 2009). In Novartis, this Court allowed an initial and limited presentation on Hatch-Waxman, but did not allow any evidence regarding the effect of generic drugs in healthcare reform because it was totally irrelevant to any issue in the case. Third, Defendants argue that evidence that it acted in compliance with Hatch-Waxman and FDA regulations is required so that Defendants are not portrayed as wrongdoers who disregard patent rights. Fourth, Defendants argue that if Plaintiffs are allowed to present evidence regarding the development and approval of its drug, Defendants should likewise be allowed. Fifth, Defendants argue that Plaintiffs do in fact have a monopoly through which Plaintiffs exclude generic brands and "erect a hurdle" for ANDA.
Based on the parties' arguments, Plaintiffs' motion is granted in part, and denied in part. Specifically, Plaintiffs' motion with regard to precluding references to a patent monopoly or the role of generic drugs in healthcare reform is granted; Defendants are precluded from extolling the benefits of generic drug pricing, but testimony regarding the difference in prices between generic and brand name drugs is allowed since the experts have relied on such costs in their respective damages analysis; and Defendants are allowed to present an initial and limited presentation of Hatch-Waxman and the generic approval process.
B. Plaintiffs' Motion in Limine #2 to Exclude Evidence and References Concerning this Court's Preliminary Injunction Opinion and Abbotts' Request for Injunctive Relief Pursuant to Fed. R. Evid. 402 and 403.
Plaintiffs argue that any finding of fact or conclusion of law made at the preliminary inunction stage is not binding in a subsequent trial. Additionally, this Court's denial of the preliminary injunction is not relevant to any issue that the jury is to decide. Plaintiffs argue that informing the jury of the denial of the preliminary injunction would significantly and unduly prejudice the Plaintiffs. Plaintiffs also argue that the fact Abbott sought a preliminary injunction is not a matter for the jury because whether injunctive relief is appropriate is a matter for the court. Finally, Plaintiffs argue that the jurors could be prejudiced if they are aware their decision at trial could prevent the sales of generic drugs.
In response, Defendants state that it is only going to refer to, and introduce evidence of, the preliminary injunction opinion and order if Plaintiffs introduce evidence, or argue, that Defendants' launch of the generic drug was improper. Based on Plaintiffs' contested facts, Plaintiffs intend to argue that Defendants' launch was at risk and characterize the launch as infringing marketing and sales. However, Defendants cannot infringe if the patent is not valid. Defendants argue it would be prejudicial to characterize Defendants as "bad actors" for launching the generic, especially because the launch occurred after Plaintiffs' motion for preliminary injunction was denied. Defendants' position is that if Plaintiffs are allowed to characterize Defendants in such a way, Defendants should be allowed to rebut by informing the jury that this Court found there were substantial questions as to the patent's validity.
Defendants also state that it is only going to present evidence on the request for the permanent injunction if Plaintiffs raise the issue. Plaintiffs' damages expert is expected to testify about the effects on lost profits of this Court granting a permanent injunction and ordering a recall of the generic drugs.
Based on the parties' arguments and this Court's determination that the denial of the preliminary injunction is irrelevant and prejudicial, Plaintiffs' motion is granted.
C. Plaintiffs' Motion in Limine #3 to Exclude Testimony of Defendant's Damages Expert, Ivan Hoffman, Pursuant to Fed. R. Evid. 403, 702, and 703.
Plaintiffs seek to exclude the opinion of Defendant's damages expert, Ivan Hoffman ("Hoffman"), regarding reasonable royalty on the grounds that it fails to meet the standard of Fed.
R. Evid. 702 (i.e. it is not the product of reliable principles and methods) and 703 (i.e. the information is not the type reasonably relied upon by experts in the field). Plaintiffs contend that Hoffman's opinion is based on faulty and improper methodology, and is contrary to the case law of the Federal Circuit regarding reasonable royalty analysis. Reasonable royalty analysis is based on a hypothetical negotiation of a licensing agreement reached at the time infringement began. The analysis assumes that the patent is valid and infringed, and presumes both parties were operating under the assumption the patent was valid, enforceable, and infringed. The hypothetical negotiation in a reasonable royalty calculation occurs before litigation.
Plaintiffs argue that Hoffman ignores the legal authorities regarding reasonable royalty analysis, and includes the question of patent validity in his analysis thereby resulting in lower rates. Plaintiffs state the following as evidence that Hoffman's report is not based on valid reasoning and reliable methods: (1) he assumes the parties enter the negotiations with knowledge of this Court's denial of the preliminary injunction and Defendant's ability to launch the generic without a license, (2) he opines a 10% reasonably royalty rate supported by denial of the preliminary injunction, specter of the generic launch, ...