Case 2:15-cv-01455-WCB Document 313 Filed 04/10/17 Page 1 of 9 PageID #: 11881
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE EASTERN DISTRICT OF TEXAS
`MARSHALL DIVISION
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`MEMORANDUM OPINION AND ORDER
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`Case No. 2:15-cv-1455-WCB
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`TEVA PHARMACEUTICALS USA, INC.,
`et al.,
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`v.
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`Defendants.
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`ALLERGAN, INC.,
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`Plaintiff,
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`Before the Court is plaintiff Allergan, Inc.’s Motion to Compel Compliance with
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`Subpoena, Dkt. No. 291, which seeks to compel third party Alcon Laboratories, Inc., to produce
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`a set of previously identified documents.1 In its response, Alcon has opposed the motion but
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`requested that, in the event the Court grants the motion, the Court also order that Allergan pay
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`Alcon’s expenses regarding the subpoena, including attorneys’ fees. Allergan’s motion is
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`GRANTED, and Alcon’s conditional cross-motion is DENIED without prejudice.
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`BACKGROUND
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`The defendant pharmaceutical companies are seeking approval by the Food and Drug
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`Administration (“FDA”) to sell a generic version of Restasis, an ophthalmic product sold by
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`Allergan. Allergan initiated the present Hatch-Waxman action, alleging that the defendants’
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`generic versions infringe several of Allergan’s patents related to Restasis. In response, the
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`1 The Court does not address Alcon’s argument that Allergan’s motion should be denied
`as to any documents outside the Identified Set, see Dkt. No. 304, at 11, because the Court
`construes Allergan’s motion as requesting production of only the Identified Set of documents,
`see Dkt. No. 291, at 3 (“A limited set of documents directly relevant to Allergan’s
`nonobviousness defense were selected for production.”).
`1
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`defendants have asserted, among other things, that Allergan’s patents are invalid for
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`obviousness.
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`Allergan intends to offer evidence of the failure of others to develop a treatment for dry
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`eye as part of its nonobviousness defense. In an effort to obtain evidentiary support for that
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`argument, Allergan has served third party Alcon with a subpoena for the production of
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`documents. Dkt. No. 291-1 (subpoena); Dkt. No. 291-2 (proof of service). As relevant here,
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`Allergan asked for information regarding the development of Alcon’s products Rejena, Zyclorin,
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`Cilomilast, Durezol, and Hydroxypropyl Guar Galactomannan (“HPGG”) (referred to as
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`AL43536 in the subpoena). Dkt. No. 291-1, at 11. Alcon objected to all the requests in the
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`subpoena and refused to produce any documents. Dkt. No. 291-4.
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`After Allergan and Alcon met and conferred, Allergan agreed to narrow the scope of the
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`subpoena to the new drug application (“NDA”) file and investigational new drug application
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`(“INDA”) file for Durezol, and the INDA files for Rejena, Zyclorin, Cilomilast, and HPGG. See
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`id.; Dkt. No. 304-1, at 2. Alcon agreed to make that narrowed set of documents available for
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`inspection. Dkt. No. 291-6. Allergan sent two attorneys to inspect those documents, and the
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`attorneys selected a subset of those documents for production. The subset, referred to herein as
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`the Identified Set, consists of several thousand pages of material. See Dkt. No. 291, at 3; Dkt.
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`No. 304, at 3. The attorneys were not permitted to make copies of the documents or to take notes
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`with them regarding the documents’ contents. See Dkt. No. 291, at 3.
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`After the inspection, Alcon objected to production of the Identified Set of documents on
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`various grounds, but it offered to provide a declaration from an undisclosed individual regarding
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`some of the contents of the documents. Dkt. No. 291, at 3-4. Allergan offered to pay for the
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`reproduction of the Identified Set of documents in electronic form using a vendor chosen by
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`2
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`Alcon. Dkt. No. 308, at 3. Nonetheless, Alcon maintained its objections. See generally Dkt.
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`No. 312.
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`DISCUSSION
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`The Court has broad discretion in resolving disputes over motions to compel discovery of
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`documents. Imperial Ethiopian Gov’t v. Baruch-Foster Corp., 535 F.2d 334, 337 n.8 (5th Cir.
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`1976). The scope of discovery is limited by Fed. R. Civ. P. 26(b)(1), which allows:
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`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. Information within this scope of
`discovery need not be admissible in evidence to be discoverable.
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`1. Alcon objects to Allergan’s subpoena primarily on the basis of relevance. Alcon
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`argues that the product information at issue would not support Allergan’s theory that others
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`failed to develop a treatment for dry eye disease and that the failure of others is evidence that
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`Allergan’s invention would not have been obvious.
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`Alcon does not dispute that the failure of others to solve the problem addressed by the
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`patents-in-suit may be relevant. But Alcon contends that “the problem” is narrowly defined as “a
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`need for emulsions comprising a reduced amount of cyclosporin which are therapeutically
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`effective, but which reduce side effects.” Dkt. No. 304, at 6. In support of that argument, Alcon
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`points to language in the specification of U.S. Patent No. 8,629,111 (“the ’111 patent”)—the
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`same language that appears in the specification of the other patents in suit—that “there was a
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`need, as of the date of the inventions[,] for ‘enhanced methods of treating ophthalmic or ocular
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`conditions with cyclosporin-containing emulsions’ with a ‘reduced’ amount of cyclosporin[] to[,]
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`among other things, reduce ‘eye irritation.’” Dkt. No. 304, at 6 (quoting ’111 patent, col. 2, ll. 7-
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`3
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`9, 48-51; id., col. 5, ll. 3-8). And Alcon points out that four of the five products Allergan has
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`identified (Durezol, Rejena, Cilomilast, and HPGG) do not contain cyclosporin.
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`Alcon’s argument is not persuasive. First, the probative value of the failure of others to
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`solve the problem addressed by Allergan’s patents is not limited to failures associated with
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`cyclosporin products. It is true that the failure of others must be directed to the problem solved
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`by the patents. See Symbol Techs., Inc. v. Opticon, Inc., 935 F.2d 1569, 1578-79 (Fed. Cir.
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`1991) (“the failure of others to find a solution to the problem which the patent[s] in question
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`purport[] to solve . . . shows indirectly the presence of a significant defect [in the prior art], while
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`serving as a simulated laboratory test of the obviousness of the solution to a skilled artisan.”)
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`(alterations in original) (internal quotation marks omitted). But it is not just the failure of others
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`to identify the exact product claimed by the patents that is relevant. In fact, evidence that others
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`were “going in different ways” is considered “strong evidence that the [inventor’s] way would
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`not have been obvious.” In re Cyclobenzaprine Hydrochloride Extended-Release Capsule Patent
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`Litig., 676 F.3d 1063, 1082 (Fed. Cir. 2012); see also Forest Labs., Inc. v. Ivax Pharms., Inc.,
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`501 F.3d 1263, 1267, 1269 (Fed. Cir. 2007) (obviousness findings were not clearly erroneous as
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`based on, inter alia, the “failure of the inventors and others to resolve citalopram without undue
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`experimentation and the testimony of Forest’s experts” that one of skill “would have been
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`motivated to develop new compounds rather than undertake the difficult and unpredictable task
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`of resolving a known racemate”).
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`The problem addressed by
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`the patents-in-suit was
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`that emulsions containing
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`therapeutically effective amounts of cyclosporin had undesirable side effects. The fact that
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`others may have tried to solve that problem by “going in [a] different way” and using different
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`compounds, rather than changing the amounts of the cyclosporin and hydrophobic components
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`4
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`in the composition, supports the inference that others did not believe the latter approach would
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`work. See In re Cyclobenzaprine Hydrochloride Extended-Release Capsule Patent Litig., 676
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`F.3d at 1082.
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`All of the identified Alcon products, whether cyclosporin-based or not, fit within that
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`rationale for the probative value of evidence of the failure of others. All five of the Alcon
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`products at issue “are products for which Alcon pursued an indication for the treatment of dry
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`eye disease during development and through clinical trials, yet none of them made it to market
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`with an indication to treat dry eye disease.” Dkt. No. 308, at 1; see also Dkt. No. 304-9, at 3
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`(September 2009 proposed package insert for Rejena included an indication for “treatment of the
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`signs and symptoms of dry eye disease”); Dkt. No. 304-3, at 1 (Durezol package insert states that
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`it is “indicated for the treatment of inflammation and pain associated with ocular surgery”); Dkt.
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`No. 304-7, at 5 (Cilomilast “is indicated for the maintenance of lung function . . . in patients with
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`obstructive pulmonary disease”); Dkt. No. 304-8, at 2 (describing purpose of clinical study as
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`“observ[ing] lacrimal fluid condition (tear film break-up time) chronologically after a single dose
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`of [HPGG] ophthalmic products” and “lacrimal fluid retention time”). Failure to obtain FDA
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`approval may be used to show the failure of others. See Knoll Pharm. Co. v. Teva Pharms. USA,
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`Inc., 367 F.3d 1381, 1385 (Fed. Cir. 2004); Pfizer Inc. v. Teva Pharms. USA, Inc., 460 F. Supp.
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`2d 659, 662 (D.N.J. 2006).2
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`Alcon also maintains that others’ failed efforts must predate or be contemporaneous with
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`the date of Allergan’s invention. The pertinent date, according to Alcon, is either December
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`2 Alcon points out that Restasis is indicated “to increase tear production” in patients with
`keratoconjunctivitis sicca (“KCS”), but not to treat “the condition known as dry eye per se.”
`Dkt. No. 304, at 2 n.2. The patents, however, claim the emulsion present in Restasis as a
`treatment for dry eye and KCS, see, e.g., ’111 patent, col. 16, ll. 35-40, so Alcon’s failures to
`develop a treatment for dry eye are relevant to the patents in suit, regardless of whether
`Allergan’s commercial embodiment has been administratively approved for that purpose.
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`2002 (when Restasis was FDA-approved, see Dkt. No. 304-4) or September 2003 (the priority
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`date of the patents-in-suit). Alcon points out that, for all five products, Allergan has not
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`identified documents dated prior to September 2003 and that, for three of the products, Allergan
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`has not identified documents dated prior to 2006. See Dkt. No. 304, at 7-11.3
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`The Court concludes that the dates of the failures do not necessarily render the evidence
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`irrelevant. Many of the instances in which courts have addressed evidence of the failure of
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`others involve failures predating public notice of an invention. E.g., DePuy Spine, Inc. v.
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`Medtronic Sofamor Danek, Inc., 567 F.3d 1314, 1328-29 (Fed. Cir. 2009) (detailing evidence of
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`secondary considerations in support of nonobviousness including failure of others that postdated
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`priority date but predated patent issuance and publication). But that is not to say that all post-
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`invention failures are irrelevant. It is at least potentially relevant to nonobviousness if others
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`continue to search for different solutions to the prior art problem in order to compete with the
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`patentee, but repeatedly fail in that effort. See In re Cyclobenzaprine Hydrochloride Extended-
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`Release Capsule Patent Litig., No. 09-MD-2118-SLR, 2010 WL 3766530, at *2 (D. Del. Sept.
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`21, 2010) (holding that evidence of others’ post-invention failures was relevant because, “[i]f
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`others continue to fail despite having the patent as prior art, such failures may illustrate just how
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`radically different the patent was from past discoveries.”).
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`2. In addition to the relevance argument, Alcon complains that compliance would
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`“prejudice” Alcon by requiring it to provide “confidential, proprietary documents” to its
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`competitor, Allergan. Dkt. No. 312, at 2. Alcon, however, has failed to make any showing of
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`3 Neither party has clarified whether the dates highlighted by Alcon are the earliest dates
`for any development of the particular product, or simply the earliest dates indicated on the
`documents in Alcon’s files. See, e.g., Dkt. No. 304, at 11 (Alcon states, “[I]n the subset of
`documents, Plaintiff’s counsel identified no Alcon document concerning Zyclorin prior to
`2006.”). It may therefore be possible that a document in Alcon’s files dated 2006 may build on
`and refer to research conducted years earlier.
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`6
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`prejudice on that ground. Allergan previously noted that the Identified Set of documents are
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`“unlikely to have any confidential information,” and that “the Court’s Protective Order affords
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`sufficient protection” to any documents that do. Dkt. No. 291, at 4-5. Other than Alcon’s bare
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`statement that it would be forced to produce “confidential, proprietary documents,” Dkt. No.
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`312, at 2; accord id. at 3, Alcon has not countered Allergan’s first point. And Alcon has failed
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`to address at all Allergan’s second point that the Protective Order provides sufficient protection
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`against the prejudicial use of Alcon’s confidential, proprietary materials. The prejudice
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`argument is not convincing.
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`3. Alcon has also stated that compliance would impose a burden on it, but Alcon has
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`failed to provide any explanation or evidence to support that claim. The Court does not find that
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`any significant burden would be placed upon Alcon in simply producing the already Identified
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`Set of documents, given that Allergan has undertaken to pay the costs of the production of the
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`documents.
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`Because
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`the Court finds
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`that
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`the subpoena request
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`is relevant
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`to Allergan’s
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`nonobviousness defense, and that compliance would be neither burdensome nor prejudicial to
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`Alcon, the motion to compel production of the identified set of documents is GRANTED.
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`4. The Court notes that at the end of its motion and reply, Allergan requests relief in the
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`form of an order to “Alcon to immediately produce all documents responsive to Allergan’s
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`subpoena and promptly provide a witness to testify on those documents.” Dkt. No. 291, at 5
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`(emphasis added); accord Dkt. No. 308, at 3 (asking that the Court order “Alcon to produce
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`documents and make a witness available for deposition.”). Because the subpoena that Allergan
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`has provided to the Court calls only for documents, and because Allergan has not provided any
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`briefing on the question of the need for a deposition, or the scope of any such deposition, the
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`Court construes Allergan’s motion as limited to the document subpoena. To the extent that
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`Allergan continues to request that Alcon produce a witness for deposition in connection with the
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`documents, Allergan may file a separate motion to compel based on its subpoena for testimony
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`in the event that the parties cannot agree on a satisfactory resolution of that request.
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`5. For its part, Alcon has requested that in the event the Court orders compliance with
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`the subpoena, the Court should award Alcon “its reasonable costs of compliance, including
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`attorney fees.” Dkt. No. 304, at 12. As Alcon points out, Allergan is required to “take
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`reasonable steps to avoid imposing an undue burden or expense on [Alcon].” Fed. R. Civ. P.
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`45(d)(1). Alcon asks the Court to “enforce this duty through the use of appropriate sanctions,
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`such as the award of reasonable attorneys’ fees.” Dkt. No. 304, at 12.
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`The Court has a responsibility to protect third parties from having to bear an “undue
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`burden” in responding to party subpoenas. See Fed. R. Civ. P. 45(d)(3)(A)(iv). But the Court
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`has not at this time seen any evidence that enforcement of Allergan’s subpoena, as limited to the
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`Identified Set of documents, would impose an undue burden or expense on Alcon. Based on the
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`representations of the parties, it appears that Allergan has satisfied its obligation under Rule 45
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`by (1) narrowing the subpoena, (2) sending its attorneys to Alcon’s facilities to conduct an
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`inspection and further narrow the number of documents requested, and (3) “offer[ing] to pay for
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`the reproduction of [the requested] documents in electronic form using Alcon’s preferred
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`vendor.” Dkt. No. 308, at 2-3. Alcon has stated that “[t]he costs Alcon has incurred in response
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`to Plaintiff’s subpoenas—and will continue to incur if the Court compels compliance—are
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`significant,” but it has offered no indication of what those costs may be, other than to refer to the
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`attorneys’ fees associated with Alcon’s resistance to Allergan’s motion to compel.
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`The Court does not regard the attorneys’ fees incurred in resisting the motion to compel
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`as recoverable costs of complying with the subpoena. Alcon was not required to resist the
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`motion to compel, and it has been unsuccessful in so doing. For those reasons, there is no sense
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`in which the attorneys’ fees were necessary expenses incurred in responding to the subpoena.
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`As to any other costs associated with Alcon’s compliance efforts, the Court has no other
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`evidence before it regarding the costs of compliance that were imposed on Alcon. The Court
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`will therefore not at this time require Allergan to pay any additional costs beyond the cost of
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`producing copies of the documents, which Allergan has already offered to pay. Alcon’s request
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`for an order requiring Allergan to pay expenses beyond those which Allergan has already offered
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`is therefore DENIED. The Court’s order is without prejudice to Alcon’s right to make a claim
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`for additional costs of production, either before or after completing the production, that itemizes
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`the costs incurred by Alcon in complying with the documentary subpoena.
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` IT IS SO ORDERED.
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`SIGNED this 10th day of April, 2017.
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`_____________________________
`WILLIAM C. BRYSON
`UNITED STATES CIRCUIT JUDGE
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