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Wyeth, et al v. Medtronic

May 2, 2011

WYETH, ET AL., PLAINTIFFS,
v.
MEDTRONIC, INC., ET AL., DEFENDANTS.



The opinion of the court was delivered by: Honorable Tonianne J. Bongiovanni United States Magistrate Judge

NOT FOR PUBLICATION

MEMORANDUM OPINION

This matter comes before the Court upon Plaintiffs Wyeth and Cordis Corporation's ("Plaintiffs") motion to amend their Complaint in order to substitute Medtronic Vascular, Inc. for Medtronic AVE, Inc. ("Medtronic AVE") and to add Medtronic USA, Inc. ("Medtronic USA") as a defendant. Defendants Medtronic, Inc. and Medtronic AVE (collectively, "Medtronic") do not oppose Plaintiffs' request to substitute Medtronic Vascular, Inc. for Medtronic AVE. However, Medtronic does oppose the addition of Medtronic USA as a defendant. The Court has fully reviewed and considered all arguments made in support of and in opposition to Plaintiffs' motion. The Court considers Plaintiffs' motion without oral argument pursuant to FED.R.CIV.P. 78. For the reasons set forth more fully below, Plaintiffs' motion is GRANTED.

I. Background and Procedural History

This is a patent infringement case dealing with United States Patent Nos. 5,516,781 (the "'781 patent"), 5,563,146 (the "'146 patent") and 5,665,728 (the "'728 patent") (collectively, the "Morris patents" or the "patents-in-suit"). The Morris patents are directed to the use of rapamycin to treat the re-closure of coronary arteries, known as restenosis, following an angioplasty procedure. Plaintiffs sell a drug-eluting stent known as the CYPHER stent, which they claim is covered by the Morris patents. Plaintiffs further claim that Defendants use of the XIENCE V stent (Abbott) and ENDEAVOR stent (Medtronic) infringes upon the patents-in-suit. At issue in the current motion, is Plaintiffs' request to add Medtronic USA, the Medtronic entity that apparently sells the allegedly infringing ENDEAVOR stent in the United States, as a defendant in this matter.*fn1

Plaintiffs argue that even though their request to add Medtronic USA was made after the deadline for filing motions to amend had past, there is good cause to permit their amendment under FED.R.CIV.P. 16. Plaintiffs also claim that the addition of Medtronic USA as a defendant is warranted under FED.R.CIV.P. 15.

Plaintiffs argue that their failure to seek to add Medtronic USA to this litigation earlier did not result from a lack of diligence, but instead stems from the fact that it was not until January 5, 2011, when Medtronic responded to one of Plaintiffs' interrogatories, that Plaintiffs learned that Medtronic USA sold the ENDEAVOR stent in the United States. In this regard, Plaintiffs claim that Medtronic never previously identified Medtronic USA in its discovery responses, despite being obligated to do so.

For example, Plaintiffs argue that Medtronic did not list Medtronic USA as an entity likely to have discoverable information in its initial disclosures. Plaintiffs claim that while Rule 26(a)(1)(A)(I) only requires a party to identify "individual[s] likely to have discoverable information[,]" not entities, Rule 26(a)(1)(A)(ii) requires a party to either provide "a copy -- or a description by category and location -- of all documents, electronically stored information, and tangible things that the disclosing party has in its possession, custody, or control and may use to support its claims or defenses . . . ." Plaintiffs note that Medtronic chose to identify the information detailed in Rule 26(a)(1)(A)(ii) by "category and location" rather than providing a copy of same. Plaintiffs, however, claim that Medtronic "hid the ball" with respect to information regarding which entity sold the ENDEAVOR stent in the United States by merely disclosing that "[f]inancial documents relating to the Endeavor stent" were available at "Medtronic's facilities, including Santa Rosa, California, and Minneapolis, Minnesota;" instead of "candidly revealing that sales documents were maintained by . . . Medtronic USA[.]" (Pl. Reply Br. at 4 (internal quotation marks and citations omitted)). Plaintiffs also argue that in identifying individuals likely to have discoverable information, Medtronic generally identified the individuals as Medtronic employees and did not identify them as employees of Medtronic USA.

In addition, Plaintiffs argue that Medtronic never claimed that it did not infringe the Morris patents because it did not sell the ENDEAVOR stent in the United States despite the fact that Plaintiffs propounded an interrogatory on Medtronic on August 17, 2009 that requested Medtronic to "'set forth in detail the complete legal and factual bases for your allegation that you have not infringed the claims of the patents in suit." (Pl. Br. at 2 (quoting Weiner Decl. Ex. C, Plaintiffs' First Set of Interrogatories to Defendants at Interrogatory No. 1)). Plaintiffs note that Medtronic has never supplemented its response to the aforementioned interrogatory to add such a defense even though Medtronic USA sells the ENDEAVOR stent in the United States.

Further, Plaintiffs contend that they attempted to conduct discovery regarding which Medtronic entity sold the ENDEAVOR stent in the United States. For example, Plaintiffs argue that they deposed Dr. Josiah Wilcox, the individual identified by Medtronic in its initial disclosures as being knowledgeable about Medtronic's "'business and company history.'" (Pl. Reply Br. at 3 (quoting Weiner Decl. Ex. B at 8)). Plaintiffs claim that when they asked Dr. Wilcox which entity sold the ENDEAVOR stent in the United States, he incorrectly responded that "it was 'the Medtronic AVE, Inc. company that's changed its name to Medtronic CardioVascular.'" (Id. (quoting Vaghani Decl. Ex. 1, 11/23/10 Wilcox Dep. at 21:1-8)). Plaintiffs note that no efforts were made by Medtronic to correct this testimony. Indeed, Plaintiffs specifically point out that they "have, to date, received no errata sheet." (Id.) Plaintiffs also point to their deposition of Mark Gaterud, a Vice President of Medtronic Vascular, Inc. and the fact that when Gaterud was asked "'who sells the Endeavor stent: Medtronic, Inc., Medtronic AVE, Inc., or its successor or perhaps both of them?[,]'" he responded "'I don't know the legal structure at all. I know that we, Medtronic, sell it.'" (Id. (quoting Vaghani Decl. Ex. 2, 12/08/10 Gaterud Dep. at 62:9-12; 62:13-15)).

Plaintiffs also argue that there was nothing in Medtronic's public filings that identified a connection between Medtronic USA and the ENDEAVOR stent. Instead, Plaintiffs claim that the only reference to Medtronic USA in Medtronic's 10-K filings occurs at the very end of the 10-K where Medtronic USA is referenced in a list of over 150 subsidiaries of Medtronic. Similarly, Plaintiffs contend that there is nothing in the Instructions for Use for the Endeavor stent that reference Medtronic USA. Instead, the Instructions for Use list Medtronic, Inc.

Likewise, Plaintiffs claim that their past litigation history with Medtronic USA did not put it on notice that Medtronic USA sold the ENDEAVOR stent in the United States. Plaintiffs argue that while they have been involved in three lawsuits with Medtronic USA, none of those prior suits gave Plaintiffs notice of Medtronic USA's role with respect to the ENDEAVOR stent. In this regard, Plaintiffs claim that two of the three litigations were filed before 2008, which is when the ENDEAVOR stent was first sold in the United States. As a result, Plaintiffs claim that no one was selling the ENDEAVOR stent in the United States at the time those litigations were filed and, as such, they could not put Plaintiffs on notice of Medtronic USA's role with respect to the ENDEAVOR stent. As for the third lawsuit, Plaintiffs contend that that matter did nothing to inform them about Medtronic USA's role with respect to the ENDEAVOR stent. Plaintiffs note that the third litigation,, which named both Cordis Corporation ("Cordis") and Medtronic USA, among others, as defendants, was voluntarily dismissed two months after it was filed and before any of the defendants filed answers or other responses. Moreover, Plaintiffs claim that the Complaint in that litigation contained very little information about Medtronic USA and no information about the ENDEAVOR stent.

As a result, Plaintiffs claim that it was not until January 5, 2011, when Medtronic responded to Plaintiffs' interrogatories served on November 24, 2010, that they learned that Medtronic USA sells the ENDEAVOR stent in the United States. Plaintiffs argue that immediately upon obtaining this information from Medtronic, they sought Medtronic's consent to adding Medtronic USA as a defendant. Plaintiffs claim that when they learned that Medtronic's consent would not be forthcoming they promptly filed the instant motion. For these reasons, Plaintiffs argue that there is good cause to permit the addition of Medtronic USA under Rule 16 and that the addition of Medtronic USA as a defendant is further warranted under Rule 15(a) as Plaintiffs did not unduly delay in seeking the proposed amendment.

Plaintiffs also claim that the addition of Medtronic USA is also appropriate under Rule 15(a) because neither Medtronic nor Medtronic USA will be prejudiced by Medtronic USA's addition as a defendant. In this regard, Plaintiffs argue that because Medtronic USA is a subsidiary of Medtronic Inc., very little additional discovery will be needed. Indeed, Plaintiffs claim that, at this juncture, they do not intend to depose any of Medtronic USA's employees. Instead, prior to the liability stage of trial, which is set to ...


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