The opinion of the court was delivered by: Geraldine Soat Brown, United States Magistrate Judge
District Judge David H. Coar
MEMORANDUM OPINION AND ORDER
Plaintiff Abbott Laboratories, Inc. ("Abbott") alleges that defendant Andrx Pharmaceuticals, Inc. ("Andrx") is preparing to market a product that would infringe three of Abbott's patents relating to an extended release (as opposed to immediate release) formulation of the antibiotic clarithromycin, which Abbott markets under the name BIAXIN XL. (See Third Am. Compl.) [Dkt 194.]*fn1 Before the court is Andrx's Motion to Compel the Production of Documents Pursuant to the Crime-Fraud Exception to the Attorney-Client Privilege. [Dkt 455.] For the reasons stated below, Andrx's motion is denied.
I. The Ranbaxy and Andrx Lawsuits
Andrx's motion has roots in a similar motion brought by Ranbaxy Laboratories, Ltd. and Ranbaxy Pharmaceuticals, Inc. (collectively "Ranbaxy") in a different lawsuit filed in this district, Ranbaxy Labs., Ltd. and Ranbaxy Pharms. Inc. v. Abbott Labs., Case No. 04 C 8078 (the "Ranbaxy lawsuit"). In the Ranbaxy lawsuit, Abbott brought a counterclaim against Ranbaxy for infringement of the same three patents at issue here. (Abbott's First Am. Answer and Countercls.) [Dkt 34, Case No. 04 C 8078.] When Ranbaxy filed a motion arguing that the crime-fraud exception vitiated Abbott's assertion of attorney-client privilege, Andrx filed a joinder in Ranbaxy's motion. [Dkt 356.] This court held oral argument on Ranbaxy's motion (04/12/06 Tr. at 61 [dkt 328, Case No. 04 C 8078]), and, as discussed further below, ordered Abbott to produce the contested documents for in camera inspection. [Dkt 312, Case No. 04 C 8078.] Subsequently, Ranbaxy settled with Abbott, the Ranbaxy lawsuit was dismissed [dkt 330, Case No. 04 C 8078], and Andrx's joinder was stricken without prejudice [dkt 438]. Andrx then filed the present motion in this case.
The Ranbaxy lawsuit remains relevant because Andrx relies heavily in the present motion on an opinion issued by the District Judge jointly in this lawsuit and the Ranbaxy lawsuit regarding Abbott's motions for preliminary injunction in each case to prevent Andrx and Ranbaxy from marketing generic versions of extended release clarithromycin. Although the District Judge entered one opinion, the results were different for Ranbaxy and Andrx. Abbott's motion was granted in part and denied in part as to Ranbaxy, but granted in full as to Andrx. Ranbaxy Labs. Ltd. v. Abbott Labs., Nos. 04 C 8078, 05 C 1490, 2005 WL 3050608 at *31 (N.D. Ill. Nov. 10, 2005) (Coar, J.). The District Judge's decision was affirmed by the Federal Circuit. Abbott Labs. v. Andrx Pharms., Inc., 473 F.3d 1196, 1213 (Fed. Cir. 2007).
The District Judge held that Ranbaxy had made an adequate showing that Abbott had engaged in inequitable conduct before the United States Patent and Trademark Office ("PTO") in obtaining the '616 and '407 patents and, thus, Abbott failed to establish a likelihood of success on the merits of its infringement claim against Ranbaxy with respect to those two patents. Ranbaxy, 2005 WL 3050608 at *9, 31. In contrast, the District Judge granted Abbott's motion for preliminary injunction against Andrx with respect to all three patents. Id. at *31. Unlike Ranbaxy, Andrx had not opposed the preliminary injunction motion on inequitable conduct grounds, and the District Judge did not address the merits of that defense with respect to Andrx.*fn2 Id. at *2. In this motion, Andrx relies in part on the findings made by the District Judge with respect to Ranbaxy's argument of inequitable conduct. (See Andrx's Mot. at 3, 9.) Andrx also relies on other evidence (see id. at 3, 7-9), most of which was also presented by Ranbaxy both in opposing Abbott's motion for preliminary injunction and in support of its motion to compel. The District Judge's findings and the other evidence are outlined below.
II. The District Judge's Preliminary Injunction Opinion
The gravamen of Andrx's motion, like Ranbaxy's prior motion and Ranbaxy's inequitable conduct defense, is the allegation that during the prosecution of the patents, Abbott selectively disclosed certain information to the PTO relating to its allegations of and patent claims for reduced taste perversion.*fn3 As described by the District Judge in his opinion:
Abbott claimed in its patent prosecutions that its extended release formulation provided reduced taste perversion compared to its immediate release formulation. Ranbaxy alleges that Abbott failed to disclose relevant data from two of its own studies that cast doubt on this assertion: the double-blind Acute Bacterial Exacerbation of Chronic Bronchitis (the "bronchitis study") and the Acute Maxillary Sinusitis studies (the "sinusitis study"). The prosecution history reveals that Abbott supported it[s] assertions about improved taste perversion by citing the results of a 24-subject pilot study which allegedly showed a two- to three-fold improvement in taste perversion of the extended release product over the immediate release formulation. The bronchitis and sinusitis studies, by contrast, involved 910 subjects and were described as "two well-controlled, double-blind clinical trials" . . . . Abbott collected data about a wide range of reported side effects in the bronchitis and sinusitis studies, including both gastrointestinal side effects and taste perversion. But only the gastrointestinal side effects data was reported to the US PTO. . . . Further, Ranbaxy states that Abbott was aware of the taste perversion results, that the results were material to Abbott's patent application, and that Abbott intentionally withheld the results in order to receive the patent.
Ranbaxy, 2005 WL 3050608 at *3 (internal footnotes omitted).
In response to Ranbaxy's inequitable conduct argument, Abbott asserted that the inventors named in the patents and the attorneys prosecuting the patents were either "ignorant of the taste perversion results of the studies, of the taste perversion claims of the patent, or both." Id. at *5. The District Judge held that the clinical studies were "highly material" to the patents. Id. at *8. He also held that Abbott had failed to provide a credible explanation for its failure to disclose the taste perversion results of the clinical studies to the PTO with respect to the '616 and '407 Patents. Id. at *9. However, he concluded that Abbott might have a meritorious explanation as to the '718 Patent because that patent was prosecuted contemporaneously with the conduct of the clinical studies. Id.
Andrx now argues that the District Judge's findings in the opinion, and the evidence upon which those findings were based, supplemented by further discovery, provide a sufficient basis for invoking the crime-fraud exception to Abbott's assertion of attorney-client privilege. (Andrx's Mot. at 3, 4.)
III. The Timing of the Patent Applications and the Studies
The issue is whether those prosecuting the patents on behalf of Abbott, i.e., the involved attorneys and inventors, knew that the taste perversion claims were undermined by the results of the clinical studies and whether the individuals intentionally failed to disclose those results to the PTO. The sequence of events is, accordingly, critical.
The chronology of the patent prosecutions and the two large clinical studies is as follows:
04-11-97 '718 application filed
Inventors: Laman Al-Razzak, Sheri L. Crampton, Linda Gustavson, Ho-Wah Hul, Nelly Milman, Susan J. Semla Attorney: Mona Anand
03-10-98 bronchitis study initiated
03-19-98 sinusitis study initiated
10-01-98 sinusitis study completed
02-22-99 bronchitis study completed
03-24-99 sinusitis study reported
Signed by: Harriett Wilson, Sandra Fukumoto, Jie Zhang, Richard Hom, Robert Palmer, David Morris, J. Carl Craft.
Involved in study's clinical aspects: Jie Zhang (Statistician, Clinical Statistics); Robert Palmer ...