United States District Court, D. New Jersey, Camden Vicinage
E. MARIE BUMB, District Judge.
Defendants Sandoz, Inc., Apotex, Inc. and Apotex Corp., and Breath Limited and Watson Laboratories, Inc. (collectively "Defendants") filed a motion to strike the expert report of Hugh D.C. Smyth, Ph.D. and the reply expert report of Peter R. Mathers. Defendants contend that these reports are not only untimely but permitting them at this late stage of the proceedings would prejudice and unduly burden both Defendants and the Court. For the reasons set forth below, the Court GRANTS Defendants' motion to strike the expert report of Hugh D.C. Smyth, Ph.D., and RESERVES decision as to Defendants' motion to strike the reply expert report of Peter R. Mathers.
This case involves Plaintiffs' invention of a once-daily inhaled corticosteroid under the name PULMICORT RESPULES®. Following remand for further proceedings related to U.S. Patent No. 7, 524, 834 (the "834 Patent"), AstraZeneca LP and AstraZeneca AB (the "Plaintiffs" or "AstraZeneca") filed a motion for preliminary injunction. (Dkt. Ent. 889.) In connection with that motion, Defendants submitted inter alia the Declaration of Jeanne Moldenhauer ("Moldenhauer Decl."), a new expert, who opined that the relevant claims of the '834 Patent are invalid as obvious in light of several prior art references. (Dkt. Ents. 908-22.) Those references include U.S. Patent No. 3, 962, 430 to Joseph L. O'Neill ("O'Neill") and U.S. Patent No. 5, 858, 998 to Maria Leuschner ("Leuschner"). (See Moldenhauer Decl., dated February 13, 2014, attached as Ex. 1 to the Declaration of Heinz J. Salmen ("Salmen Decl."), Dkt. Ent. 1030.)
After it heard argument on Plaintiffs' preliminary injunction, the Court issued a decision consolidating the motion hearing with the trial on the merits. (June 4, 2014 Opinion, Dkt. Ent. 980.) The Opinion addressed both the O'Neill and Leuschner prior art references raised by Defendants, noting that the record would need to be further developed. ( Id. at 39-40, 41 n.25.) The Court concluded that the remaining question "is whether a POSA would have had a reasonable expectation of using well-known solutions to these traditional [sterilization] processes to produce a pharmaceutically acceptable product that met the criteria of sterility." ( Id. at 43.)
According to the Scheduling Order entered on June 13, 2014, opening expert reports were due on July 3, 2014, responsive expert reports on August 1, 2014, and reply expert reports addressing issues raised in the responsive expert reports were due on August 29, 2014. (Dkt. Ent. 991.)
On July 3, 2014, Defendants submitted the Opening Expert Report of Jeanne Moldenhauer (the "Moldenhauer Opening Report"), in which Moldenhauer explained - in language nearly identical to her February Declaration - that O'Neill discloses types of sterilization for non-electrolyte corticosteroids and provides "an example of a formulation containing dexamethasone acetate and sodium chloride (amongst other ingredients) that is sterilized by moist heat (steam) sterilization." (Moldenhauer Opening Report, Dkt. Ent. 1047, ¶ 58.) The example to which she refers in this paragraph of her Declaration is Example 1 of O'Neill. (Id.) Moldenhauer also explained that Leuschner discloses pharmaceutical compositions such as suspensions and that Example 3 of Leuschner is a budesonide injectable formulation. ( Id. at ¶¶ 60-62.) [As discussed below, Example 1 of O'Neill and Example 3 of Leuschner are the subjects of Smyth's testing data.]
On August 1, 2014, AstraZeneca's second round of experts included reports of Drs. Robert O. Williams, III, James Akers, and George Zhanel, who responded to the Moldenhauer Opening Report and specifically addressed Leuschner and O'Neill. (Defs.' Br. at 8.) In particular, Drs. William and Akers concluded that neither Example 3 of Leuschner nor Example 1 of O'Neill discloses a pharmaceutically acceptable inhalation product. (Salmen Decl., Exs. 9 & 10.) None of the experts' reports mentioned Smyth.
a. Smyth Report
On August 29, 2014, AstraZeneca served upon Defendants the expert report of Smyth (the "Smyth Report"), who had never previously been mentioned as an expert. Attached to the Smyth Report is a declaration purporting to replicate Example 3 of Leuschner and Example 1 of O'Neill. (See Ex. 1, attached to the Declaration of Jay I. Alexander ("Alexander Decl."), Dkt. Ent. 1037.) Smyth concludes that "[t]he Leuschner method clearly results in a visibly uneven, clumpy mixture that would not be pharmaceutically acceptable, with or without autoclaving." ( Id. at ¶ 30.) As to O'Neill, Smyth concludes that the method "results in a significant increase in particle size of the raw budesonide that would not be pharmaceutically acceptable." ( Id. at ¶ 49.) Interestingly, the Smyth Report does not purport to be responsive to any of Defendants' expert reports.
Defendants argue that the Smyth Report should be stricken as untimely and outside the scope of discovery contemplated by the Scheduling Order. In response, AstraZeneca argues that the Smyth Report is timely as it was submitted in reply to the Responsive Expert Report of Moldenhauer served on August 1, 2014. (Alexander Decl., Ex. 8.) The Responsive Report addresses the opinions contained within AstraZeneca's opening expert reports regarding the objective indicia of non-obviousness, on which AstraZeneca bears the burden of presenting evidence. In the Responsive Report, Moldenhauer opined:
As I explained in my Opening Report (¶¶ 145-46), I am not aware of any evidence that anyone outside of AstraZeneca was skeptical that it would be possible to attempt to make a sterile budesonide suspension. To the contrary, the prior art references discussed in my Opening Report, particularly O'Neill... [and] Leuschner... indicate the opposite: a person of ordinary skill in the art would have had a reasonable expectation of creating a sterile budesonide composition (powder or suspension) and would not have been skeptical of his/her success.
(Alexander Decl., Ex. 8 ¶ 36.) She similarly concluded that AstraZeneca's sterilization results were not unexpected because of the teachings of these references. ( Id. ¶¶ 53, 57.) Moldenhauer further opined that there is no evidence that others had tried and failed to create a sterile budesonide suspension; rather, "[o]thers in the art made sterile corticosteroids and corticosteroid suspensions (O'Neill), including budesonide suspensions (Leuschner, Clark, Harris)." ( Id. at ¶¶ 46, 48.) According to AstraZeneca, Moldenhauer's Responsive Report - apparently for the first time - "squarely put at issue whether Leuschner and O'Neill had actually achieved the results alleged to have been made in their patent disclosure." (Pl.'s Opp. at 3.)
It is clear to the Court that the Moldenhauer Opening Report preemptively addressed the indicia of non-obviousness and contains nearly identical opinions regarding the impact of Leuschner and O'Neill on the unexpected results (Dkt. Ent. 1047 ¶¶ 136-148) and industry skepticism (id. at ¶ 146). Moldenhauer also opined in her Opening Report that she was unaware of evidence that others had tried to create a sterile budesonide suspension but failed. ( Id. at ¶ 144.) Moldenhauer refers to the O'Neill and Leuschner references throughout these opinions, and concludes that in light of these references a POSA would have expected to successfully create a sterile BIS product. Notably, the Moldenhauer Opening Report specifically discusses Example 1 of O'Neill and Example 3 of Leuschner - the very examples that Smyth purports to have recreated. Thus, setting aside the fact that AstraZeneca has been aware of the importance of the Leuschner and O'Neill prior art references (including the examples that are the subject of Smyth's testing) since Moldenhauer's February 2014 Declaration, the scope of her opinions regarding these references was fully disclosed to AstraZeneca in Moldenhauer's Opening Report served on July 3 pursuant to the Scheduling Order, not in her Responsive Report. Indeed, her Responsive Report merely reiterates and refers to portions of her Opening Report. Even more significantly, while Smyth does not provide any dates for his experiments, Exhibit 22 to his Declaration suggests they were conducted sometime in mid-July - weeks before Moldenhauer's Responsive Report that supposedly put this data at issue. (Salmen Decl., Ex. 12 at Ex. 22.) Hence, AstraZeneca only feigns surprise.
AstraZeneca's failure to disclose Smyth until the third round of expert reports and just a few weeks prior to the close of expert discovery and commencement of trial is untimely and violates the Scheduling Order. Expert disclosures are governed by Federal Rule of Civil Procedure 26, which requires parties to disclose the identity of potential expert witnesses and to provide a written report containing the experts' opinions as well as the facts and data relied upon to form those opinions. Fed.R.Civ.P. 26(a)(2)(B). Rule 26 further provides "A party must make these disclosures at the times and in the sequence that the court orders. Absent a stipulation or a court order, the disclosures must be made:... (ii) if the evidence is intended solely to contradict or rebut evidence on the same subject matter identified by another party under Rule 26(a)(2)(B) or (C), within 30 days after the other party's disclosure." ...