Case 2:13-cv-00391-ES-JAD Document 411 Filed 12/06/17 Page 1 of 6 PageID: 7879
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`Case 2:13-cv-00391-ES-JAD Document 411 Filed 12/06/17 Page 1 of 6 PageID: 7879
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`UNITED STATES DISTRICT COURT
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`DISTRICT OF NEW JERSEY
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`Chambers of
`Joseph A. Dickson
`United States Magistrate Judge
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`Martin Luther King, Jr. Federal Bldg.
`& US. Courthouse
`50 Walnut Street
`Newark. New Jersey 07102
`(973-645-2580)
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`LETTER ORDER
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`December 6, 2017
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`T0 all counsel ofrecord via ECF
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`Jazz Pharmaceuticals, Inc. v. Amneal Pharmaceuticals LLC, et al.
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`Civil Action No.2 13-391 (ES! (JAD)
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`Dear Counsel:
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`This will address Defendants Lupin Limited, Lupin Pharmaceuticals, Inc., and Lupin Inc.’s
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`(collectively “Lupin”) informal application to compel Plaintiffs Jazz Pharmaceuticals, Inc. and
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`Jazz Pharmaceuticals Ireland Limited (collectively “Jazz”), to produce certain documents related
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`to its settlements with certain former defendants.
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`(ECF Nos. 354, 363-66). The Court resolves
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`Lupin’s application without oral argument pursuant to Federal Rule of Civil Procedure 78. For
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`the reasons set forth below, Lupin’s request is GRANTED IN PART.
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`Lupin seeks documents related to settlement and license agreements (including drafts, term
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`sheets, and communications related to the negotiation of such agreements) that Jazz entered into
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`with Roxane Laboratories, Inc. (“Roxane), Wockhardt Bio AG / Workhardt Limited / Wockhardt
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`USA, LLC (collectively “Wockhardt”), and Sun Pharmaceutical Industries Limited / Ohm
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`Laboratories Inc. / Ranbaxy Inc. (collectively “Ranbaxy”) concerning Xyrem®, the drug at issue
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`in the above-referenced matter. (See generally Lupin’s May 26, 2017 Letter, ECF No. 354). Lupin
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`contends that those documents are relevant to its invalidity defenses, as the terms of the settlement
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`i license agreements may provide information on the commercial success of the patented features
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`at issue (a “secondary consideration” that bears on whether the patent claims are obvious), (r; at
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`4-5), and “may provide evidence of an absence of nexus between the marketed product and the
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`purportedly novel feature of the patent.” (Q at 5). Lupin also argues that the documents are
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`relevant to Jazz’s claims for injunctive relief, as they bear on “considering whether irreparable
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`harm has occurred or will occur.” (Li).
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`Jazz opposes Lupin’s request. (See generally Jazz’s June 13, 2017 Letter, ECF No. 363).
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`Jazz argues that the settlement / license agreements and related documents are irrelevant with
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`regard to both Lupin’s invalidity defenses and its own claims for injunctive relief.
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`(11. at 2-4).
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`With regard to Lupin’s invalidity defenses, Jazz argues that it will not be relying on licensing to
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`demonstrate Xyrem’s® commercial success, as traditional measures, such as sales figures are
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`sufficient to do so.
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`(I_d. at 2). Jazz further contends that it has only raised “commercial success”
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`arguments with regard to “one subgroup of the patents-in-suit”, and publicly available information
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`(i.e., the agreed “launch dates” for Roxane, Wockhardt and Ranbaxy’s products) reflects that each
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`of those patents will expire years before Roxane, Wockhardt or Ranbaxy will enter the market and
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`begin paying royalties to Jazz.
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`(Li. at 2-3). Therefore, “the license and royalty cannot be tied to
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`those patents.” (1;; at 3). Jazz also claims that it is not making “commercial success” arguments
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`with regard to any of the later-expiring patents. (E). “Thus, to the extent Lupin argues the non-
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`public, confidential information may disclose whether the specific royalty rates or other financial
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`terms are tied to particular patents or patent families, that information is not relevant.” (Li). With
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`regard to its claims for injunctive relief, Jazz contends that the settlement-related documents are
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`irrelevant, as “an injunction hearing, if necessary at all, may not be initiated until many years from
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`now”, (Q at 4), given Roxane’s statutorily mandated period of exclusivity. (id; at 3-4). Jazz also
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`argues that Lupin’s requests for documents concerning Jazz’s settlement negotiations (i.e., as
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`opposed to the ultimate settlement / license agreements themselves) with Roxane, Wockhardt and
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`Ranbaxy are subject to a higher standard, thereby requiring Lupin to make a more particularized
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`showing of relevance.
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`(I_d. at 4—5). Finally, in the alternative, Jazz argues that, if the Court does
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`require production:
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`(1) Jazz should be permitted to redact portions it deems irrelevant; (2) any
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`production should be designated as “Highly Confidential — Attorneys’ Eyes Only”; and (3) any
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`recipient of the documents in question should “be barred from participating in settlement
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`negotiations between Lupin and Jazz.” (Li. at 4). Roxane and Wockhardt join in Jazz’s opposition.
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`(ECF Nos. 364-65).
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`In their reply submission, Lupin contends, primarily, that Jazz has failed to rebut Lupin’s
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`relevancy arguments.
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`(Lupin’s June 20, 2017 Letter at l-4). Lupin also argues that it is not
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`required to meet a heightened standard to obtain discovery of settlement negotiation materials, but
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`advises that it “would be willing to forego production of the underlying settlement negotiation
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`documents at this time, ifJazz agrees to produce the settlement and license agreements themselves,
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`with the understanding that Lupin would not be prejudiced from later seeking the underlying
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`negotiation documents if necessary.” (I_d. at 4-5). Lupin is not averse to Jazz designating the
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`settlement materials under the Discovery Confidentiality Order in this matter, but argues that Jazz
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`lacks any legal basis for requesting that the Court bar Lupin attorneys who receive the settlement
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`documents from participating in settlement discussions between Lupin and Jazz. (Q at 2). Lupin
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`contends that Jazz must demonstrate an “exceptional need” for such relief. (Q).
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`Lupin’s request turns largely on the relevancy of the information in question. Federal Rule
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`of Civil Procedure 26(b)(1), which governs the scope of discovery, provides, in pertinent part:
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`Parties may obtain discovery regarding any nonprivileged matter
`that is relevant to any party’s claim or defense and proportional to
`the needs of the case, considering the importance of the issues at
`stake in the action, the amount in controversy, the parties’ relative
`access to relevant information, the parties’ resources, the importance
`of the discovery in resolving the issues, and whether the burden or
`expense of the proposed discovery outweighs its likely benefit.
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`The parties disagree on whether the settlement-related documents are relevant to any of their
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`claims or defenses. The Court finds that those documents do have some relevance to in this matter.
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`Even assuming, without deciding, that the agreements are not relevant to Jazz’s invalidity defenses
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`for the reasons Jazz sets forth in its June 13, 2017 letter, (ECF No. 363 at 2-3), it appears that they
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`are relevant to Jazz’s claims for injunctive relief. Jazz does not actually argue otherwise, instead
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`pointing out that “an injunction hearing, if necessary at all, may not be initiated until many years
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`from now.” (I_d. at 4). The fact that a hearing on a particular issue may take place in the distant
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`future, or even ultimately be unnecessary, does not render information related to that issue
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`irrelevant. Moreover, regardless of the timing of any injunction hearing, the parties and the Court
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`do not have years to let that process run its course. The deadline for fact discovery, adjourned
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`multiple times due to the pendency of various disputes, runs on January 26, 2018.
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`It is therefore
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`appropriate that Jazz produce the agreements now. The Court notes, however, that, unlike the
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`settlement
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`/
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`license agreements themselves, Lupin has not sufficiently demonstrated how
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`documents related to the negotiation of those agreements might be relevant.
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`Taking all of the foregoing into account, the Court finds that Jazz shall produce its
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`settlement / license agreements (n_ot documents related to underlying negotiations) with Roxane,
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`Wockhardt and Ranbaxy to Lupin and, when doing so, shall designate them as “Highly
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`Confidential” under the Discovery Confidentiality Order in this matter.
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`(§e_e ECF No. 335).
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`Moreover, as the agreements contain confidential information from Roxane, Wockhardt and
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`6(b) of the Discovery Confidentiality Order. Lupin shall only use the settlement / license
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`agreements and information derived therefrom for the purposes of substantively litigating this
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`matter, and n_ot as part of any settlement discussions. Finally, any Lupin attorney who receives
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`either the settlement / license agreements or information derived from those agreements shall be
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`screened from any settlement discussions that Jazz and Lupin have in connection with this matter.
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`The Court finds that this approach strikes an appropriate balance, as it permits Lupin to receive
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`(and use for litigation purposes) information that, while technically relevant, appears to be of
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`limited practical utility in this matter, while also eliminating the single, albeit substantial, burden
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`that Jazz faces as a result of its production:
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`an obvious disadvantage during its settlement
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`negotiations with Lupin.l While the Court acknowledges Lupin’s argument that Jazz must
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`demonstrate a “showing of exceptional need” to justify such restrictions on counsel, (Lupin’s June
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`20, 2017 Letter at 2, ECF No. 366), Lupin bases that contention on a single, unpublished opinion
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`from the United States District Court for the Eastern District of Texas that, in turn, did not cite
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`anything in connection with an “exceptional need” standard. (Q) (citing Allergan, Inc. v. Teva
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`Pharm. USA Inc., No. 15-1455 (WCB), 2017 WL 132265, at *2 (ED. Tex. Jan. 12, 2017)).
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`Under the circumstances at issue here, the Court finds that the limited restriction described above
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`1 The Court is n_ot insinuating that Lupin’s counsel would intentionally use information from the
`settlement / license agreements to gain an advantage over Jazz during settlement discussions. The
`Court is hard-pressed, however, to imagine a situation in which, knowing how Jazz agreed to
`resolve essentially identical claims against Lupin’s competitors, counsel would not be at least
`subconsciously influenced by that information when negotiating against Jazz. Moreover, the Court
`wishes to eliminate the potential for a serious conflict between counsel’s duties to their client (i.e,
`to obtain the best settlement result possible) and their duties under the Discovery Confidentiality
`Order and this Order. For instance, if Jazz were to offer Lupin less favorable terms than those it
`reached with Roxane, Wockhardt or Ranbaxy, and Lupin’s counsel knew so afier reviewing Jazz’s
`agreements with those parties, it seems that such a conflict would be inevitable. Screening
`eliminates the possibility of such a conflict and the threat of associated motion practice that may
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`is appropriate pursuant to Federal Rule of Civil Procedure 26. See, e.g., Fed. R. Civ. 26(c)(1)(E),
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`(G).
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`SO ORDERED
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`JOSiPH A. DICKSON, U.S.M.J.
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`Hon. Esther Salas, U.S.D.J.
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