`Case: 1:16-cv-00651 Document #: 80 Filed: 01/09/18 Page 1 of 12 PageID #:2436
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`1
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`IN THE UNITED STATES DISTRICT COURT
`NORTHERN DISTRICT OF ILLINOIS
`EASTERN DIVISION
`
`Docket No. 16 C 651
`
`Chicago, Illinois
`December 11, 2017
`9:20 a.m.
`
`)))))))))
`
`HOSPIRA, INC.,
`
`Plaintiff,
`
`vs.
`
`FRESENIUS KABI USA, LLC,
`
`Defendant.
`
`TRANSCRIPT OF PROCEEDINGS - Status
`BEFORE THE HONORABLE REBECCA R. PALLMEYER
`
`APPEARANCES:
`
`For the Plaintiff:
`
`JENNER & BLOCK LLP
`BY: MS. SARA T. HORTON
`MR. YUSUF ESAT
`353 North Clark Street
`Chicago, Illinois 60654
`
`For the Defendant:
`
`SCHIFF HARDIN LLP
`BY: MR. JOEL M. WALLACE
`233 South Wacker Drive, Suite 6600
`Chicago, Illinois 60606
`
`Court Reporter:
`
`FRANCES WARD, CSR, RPR, RMR, FCRR
`Official Court Reporter
`219 S. Dearborn Street, Suite 2144D
`Chicago, Illinois 60604
`(312) 435-5561
`frances_ward@ilnd.uscourts.gov
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`Case: 1:16-cv-00651 Document #: 80 Filed: 01/09/18 Page 2 of 12 PageID #:2437
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`THE CLERK: 16 C 651, Hospira versus Fresenius Kabi
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`USA for status.
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`MS. HORTON: Good morning, your Honor.
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`Sara Horton and Yusuf Esat for Hospira.
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`THE COURT: Good morning.
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`MR. WALLACE: Joel Wallace on behalf of Fresenius
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`Kabi.
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`THE COURT: Good morning.
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`Okay. We are here for status. What's our status?
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`MS. HORTON: Your Honor, the status is that you
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`issued a Markman ruling about a month ago.
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`THE COURT: Right.
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`MS. HORTON: And in the interim, also, Hospira
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`filed suit on a related patent against Fresenius Kabi, and
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`then the parties agreed to file a joint consolidation motion,
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`which you granted.
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`THE COURT: Correct.
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`MS. HORTON: So we have that added into this case.
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`In its answer, Fresenius Kabi counter-claimed
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`adding an additional patent. So there are now two additional
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`patents, aside from the four that were involved in the
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`underlying case -- the first case, I should say.
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`We have discussed with Fresenius Kabi a schedule
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`going forward and how to work these other two patents into
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`the case.
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`Case: 1:16-cv-00651 Document #: 80 Filed: 01/09/18 Page 3 of 12 PageID #:2438
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`THE COURT: These are patents held by Fresenius
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`Kabi?
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`MS. HORTON: No. Held by Hospira.
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`THE COURT: Held by Hospira. Okay.
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`So the counterclaim is for invalidity?
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`MS. HORTON: The counterclaim is for invalidity. I
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`believe we have not yet answered the counterclaim. But
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`it's -- in short, it's a patent that issued sometime between
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`the time that Hospira first sued Fresenius Kabi and between
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`the second case that we filed against them. And I believe
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`Fresenius just wants it litigated all at the same time.
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`THE COURT: Sure. Okay. We did grant the motion
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`for reassignment. Remind me of the number of that case so I
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`can get them both on the same track. We will assume this is
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`a status in that case as well.
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`MR. WALLACE: The other case was 17 CV 7903.
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`THE COURT: Okay. So this will -- today's status
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`will be deemed a status in 17 C 7903 as well.
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`Does that include the -- that includes the same
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`patents that are at issue in this case.
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`MS. HORTON: Yes.
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`MR. WALLACE: It includes only two more patents
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`that were part of the same family of the four patents that
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`are in the original case. And there are two more patents
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`from the same family, same inventor, same specification that
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`Case: 1:16-cv-00651 Document #: 80 Filed: 01/09/18 Page 4 of 12 PageID #:2439
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`issued later, and those have now been all consolidated.
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`The parties have agreed that the claim construction
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`from the first case applies to the later, because they
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`share -- all of the -- I guess two of the terms are in all of
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`the patent claims as well.
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`THE COURT: And does the addition of two patents in
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`the original case -- actually, does the addition of any of
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`these patents involve additional claims as well?
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`MS. HORTON: Additional claim terms?
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`THE COURT: Additional claim terms, yes.
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`MS. HORTON: Yes, your Honor, they do. It's
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`unclear, to Hospira at least, whether or not there will need
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`to be additional claim construction briefing. We actually
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`assume that there will not be, but we haven't done any
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`discovery on them yet to understand that.
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`THE COURT: All right. Well, what we need to do,
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`then, is get a revised Rule 16 schedule in place based
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`upon -- I am assuming you are going to at least factor in the
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`local patent rule schedule, but recognizing that some of the
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`things that have happened already would eliminate that need
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`in this case.
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`So can we set a date for that to happen, for you to
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`develop a proposed schedule?
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`MR. WALLACE: We have discussed a proposed
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`schedule. Right now this is the overarching situation. It's
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`Case: 1:16-cv-00651 Document #: 80 Filed: 01/09/18 Page 5 of 12 PageID #:2440
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`sort of the impasse between the two parties on setting a
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`schedule, because of the delay between the claim construction
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`hearing and the ruling.
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`THE COURT: A lot of the dates should change,
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`right.
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`MR. WALLACE: Well, the issue for Fresenius Kabi is
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`that its 30-month stay on regulatory approval is expiring in
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`June.
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`Fresenius Kabi is interested in launching as soon
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`as possible at that time. It also implicates whether or not
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`Hospira would be looking to file a preliminary injunction
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`motion at that time.
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`So the two options are, we can either compress our
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`schedule now to try to get everything prepared and get
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`everything before the Court for a trial in, for example,
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`early April, and give the Court enough time to hear all the
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`evidence and then issue a ruling before the June date
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`happens.
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`The other alternative, which is what Hospira is
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`proposing, is to take a more traditional schedule at this
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`time, following the local patent rules more closely, which
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`then would push trial out to probably late summer, early --
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`around early autumn, late summer. But there is this high
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`risk that partway through the proceeding everything is going
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`to put on a fast track when we get around the end of the
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`Case: 1:16-cv-00651 Document #: 80 Filed: 01/09/18 Page 6 of 12 PageID #:2441
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`exclusivity period.
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`THE COURT: Of those two options -- you probably
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`won't like hearing this, but I prefer the first. I would
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`like to try it in April, if we could.
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`MS. HORTON: So the issue with that, your Honor,
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`from Hospira's standpoint, is, that requires, under the
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`schedule that Fresenius has proposed to us -- what they are
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`proposing is that all discovery on the two new patents and
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`any updated discovery on the other four patents, after claim
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`construction, be completed by January 11th.
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`That would include any depositions on these two new
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`patents, one of which Hospira didn't even assert against
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`Fresenius Kabi, that they are asserting against us. So they
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`brought this into the case.
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`They are also proposing that they get a summary
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`judgment motion in January, but Hospira does not get one
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`similarly.
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`We are just not sure how it's actually going to
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`work, to do all of the discovery on these two new patents
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`from the other case.
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`THE COURT: I can short-circuit this by saying that
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`if we want to try it -- if you want to try it in April, we
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`can't have any summary judgment proceeding. It wouldn't
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`work.
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`It seems to me you have time to get your discovery
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`Case: 1:16-cv-00651 Document #: 80 Filed: 01/09/18 Page 7 of 12 PageID #:2442
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`done between now and April, and January 11th seems
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`extraordinarily aggressive to me, given the holidays.
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`If I said, get discovery done by middle to the end
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`of February, that seems slightly more realistic, and I think
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`that could easily accommodate a trial date in April.
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`MS. HORTON: That might work for fact discovery. I
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`think the other issue is that we think that there will be
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`significant expert discovery that hasn't happened yet.
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`We have infringement issues in this case and
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`invalidity issues in this case. It's going to be -- there
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`will be damages experts on secondary considerations of
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`commercial success. I think there will be probably, at least
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`on Hospira's side, three or four experts that will be
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`testifying and having expert reports due and needing to be
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`deposed. I assume the same on Fresenius Kabi's side.
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`When we lay out the dates, which we have tried to
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`do, it seems really aggressive to be able to do contentions,
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`fact discovery and expert discovery, and a pretrial order
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`before April.
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`MR. WALLACE: Your Honor, we have had discussions
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`with Hospira about this, but the two new patents -- one
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`patent literally adds -- it includes everything from all the
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`other patents and merely narrows from any type of
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`dexmedetomidine to one salt form. And there's really no
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`dispute that's the only one that's been used by anyone. The
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`Case: 1:16-cv-00651 Document #: 80 Filed: 01/09/18 Page 8 of 12 PageID #:2443
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`other patent adds a few other steps.
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`We discussed with Hospira. If they will narrow the
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`scope of the claims that they want to assert, Fresenius Kabi
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`is willing to discuss stipulations on infringement to
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`streamline the case as much as possible, that perhaps this
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`can be an invalidity-only case, which would make it more
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`amenable to an April trial.
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`MS. HORTON: That's true.
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`MR. WALLACE: I believe those discussions, they
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`wanted -- in any event, the parties -- what Fresenius Kabi is
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`proposing is that we do contentions in the month of January.
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`Basically at the beginning of January, Fresenius Kabi would
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`send its -- we would simultaneously exchange their
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`infringement contentions on the new patents, and we would
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`propose our invalidity contentions, amending the old
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`contentions and adding in the new patents as well.
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`And then that would put us at the end of January
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`for -- or the beginning of February for the responsive
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`contentions. And then at that point, all that would really
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`be left is expert discovery.
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`MS. HORTON: That's actually not at all
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`inconsistent with what Hospira has agreed with Fresenius
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`Kabi.
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`Where, I guess, the rubber hits the road is whether
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`or not, based on those contentions and what happens there, if
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`Case: 1:16-cv-00651 Document #: 80 Filed: 01/09/18 Page 9 of 12 PageID #:2444
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`the local rules would then contemplate Markman proceedings.
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`We don't think there is going to be a need to
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`construe any other claims, but we just don't know how they
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`are going to be construing terms.
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`And then after that, the expert discovery -- you
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`know, after the contentions, then you do expert reports, and
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`then you have to depose all these people. And then you have
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`to do a pretrial order.
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`So what we were -- what we had proposed to
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`Fresenius was -- frankly, they had expressed in our
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`meet-and-confers that -- and Mr. Wallace will correct me if
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`I'm wrong -- that they were keen to have an early summary
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`judgment or an early trial.
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`We, Hospira, thought, okay, well, if you want an
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`early summary judgment, we wouldn't oppose that. I don't
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`know what the summary judgment will actually be on, but if
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`they wanted to do that quickly, we said, go for it,
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`basically.
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`If that's case-dispositive, as they think it is,
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`then that might get us to their end goal anyway.
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`The other thing I wanted to alert your Honor,
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`because I should have said it earlier, is, the underlying
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`four patents from the first case have been -- gone through a
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`trial in Delaware --
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`THE COURT: Right.
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`Case: 1:16-cv-00651 Document #: 80 Filed: 01/09/18 Page 10 of 12 PageID #:2445
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`MS. HORTON: -- in front of Judge Andrews. We are
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`expecting a ruling in that case this month.
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`So I think there is probably a high likelihood,
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`depending on what happens in this case, the parties might be
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`rushing around trying to figure out how that implicates what
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`they are doing in this case.
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`MR. WALLACE: From Fresenius Kabi's point of view,
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`it's, in many ways, irrelevant. If the patents are found
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`invalid, we are sure that Hospira would probably appeal that
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`ruling, which means that Fresenius Kabi still doesn't have
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`certainty on launching whenever it gets final approval or
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`not.
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`If Hospira prevails, then Fresenius Kabi, of
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`course, would still want to go forward, because we have
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`unique and separate theories -- I think both parties would
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`agree with that -- than from what was going on in the
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`Delaware trial.
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`THE COURT: If the judge declares parts or all of
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`the Hospira patent invalid, wouldn't that at least militate
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`in favor of a settlement of this case?
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`I mean, it will make a difference however the judge
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`rules.
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`MR. WALLACE: Yes, your Honor. It could make a
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`difference.
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`There have not been settlement discussions between
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`Case: 1:16-cv-00651 Document #: 80 Filed: 01/09/18 Page 11 of 12 PageID #:2446
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`the parties. So we are not at this point sure what Hospira's
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`position is.
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`THE COURT: And if you try to settle it now, are
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`you going to be saying, we need to wait until the judge rules
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`in Delaware?
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`MS. HORTON: Yes.
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`THE COURT: That's what I think, too.
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`All right. Here is what I am going to do. I think
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`we should develop a schedule that gets us ready for trial by
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`the end of April. If it is just a validity trial, that could
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`be fine. It could work out very well.
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`It sounds to me like both parties agree that we are
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`not going to need further claims construction proceedings in
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`this case. So we could probably jettison the whole Markman
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`issue, and obviously that, unfortunately, generates delay.
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`I would also heavily discourage any summary
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`judgment briefing unless it's a straight, single issue that
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`actually could dispose of the whole case.
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`Let's set it for status -- I will ask you to
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`develop a schedule along those lines, and let's set it for
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`status at the end of January.
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`In the meantime, as soon as the judge out in
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`Delaware rules, you can let me know, and let me know whether
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`or not it makes sense now to start talking about a settlement
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`at that point.
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`Case: 1:16-cv-00651 Document #: 80 Filed: 01/09/18 Page 12 of 12 PageID #:2447
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`So January 31st for status? 9 o'clock?
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`In the meantime, within the next, say, 10 days, if
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`you could get a schedule to us, we will enter it.
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`MS. HORTON: Thank you, your Honor.
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`MR. WALLACE: Thank you, your Honor.
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`THE COURT: All right. Thank you. I will see you
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`in January.
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`* * * * *
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`I certify that the foregoing is a correct transcript from the
`record of proceedings in the above-entitled matter.
`
`/s/ Frances Ward_________________________January 9, 2018.
`Official Court Reporter
`F/j
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