Magistrate Judge Schneider grants in part, denies in part plaintiff’s request for defendant’s “settlement and licensing documents” for determination of royalty damages

Magistrate Judge Schneider of the District of New Jersey, sitting by designation, recently issued an order granting in part and denying in part plaintiff’s application for the production of documents related to defendant’s licensing agreements. Sciele Pharma, Inc., et al. v. Lupin, Ltd., et al., C.A. No. 09-37-RBK-JS (D. Del. Jan. 28, 2013) (redacted version). The patents-in-suit in this infringement action relate to the treatment of diabetes. Id. at 8. Plaintiff requested five categories of “‘settlement and licensing documents’” for the purpose of assessing royalty damages; the details of one of these categories were redacted from the order. Id. at 1-2.

The focus of the Court’s analysis was on whether the patents in the requested agreements were “comparable” to the patents-in-suit, a relevant factor in examining a reasonable royalty calculation. Id. at 2-3. The Court first concluded that differences between the patents involved in the redacted category and the patents-in-suit did not affect whether these agreements were discoverable, but instead “[went] to their weight and admissibility;” because discovery is “a broader standard than admissibility,” the Court ordered production of these agreements. Id. at 6-7. The Court also granted plaintiff’s request as to agreements concerning biguanides, which is “in the class of compounds that includes metformin, the active ingredient” in plaintiff’s patented drug. Id. at 7-8. Plaintiff had sufficiently demonstrated comparability because the scope of discovery, “including determining whether a requested agreement is comparable, is interpreted broadly.” Id. at 8.

The Court denied plaintiff’s requests for agreements “concerning the treatment of diabetes” and “[o]ther extended release pharmaceutical characteristics” because they were “overbroad” and plaintiff had not shown that they were comparable. Id. at 8-9. But “a combination of [these two] requests [was] sufficiently comparable to be discoverable. [Defendant] will be Ordered to produce licensing agreements for other drugs for the treatment of diabetes that also have extended release pharmaceutical characteristics.” Id. at 9.

Having determined that defendant should produce some license agreements, the Court then analyzed whether it must also produce “communications concerning or associated with these agreements including negotiations, forecasts and analysis,” noting that such documents are generally “less probative and more prejudicial than the licenses themselves.” Id. at 9-10 (internal quotation marks omitted). The Court ordered production of such documents related to the redacted category based on its “similar[ity] to the issues in this case,” but denied the request as to all other categories, noting that their “minimal relevancy is outweighed by the cost, burden, prejudice and distraction the documents will generate.” Id. at 10-11.

Sciele Pharma, Inc., et al. v. Lupin, Ltd., et al., C.A. No. 09-37-RBK-JS (D. Del. Jan. 28, 2013) (redacted… by

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