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July 19, 2005.


The opinion of the court was delivered by: DENISE COTE, District Judge


Plaintiffs Takeda Chemical Industries, Ltd., the owner of patents for the widely-sold drug pioglitazone hydrochloride ("pioglitazone"), which is marketed under the brand name Actos, and Takeda Pharmaceuticals, North America, Inc., which sells Actos pursuant to the FDA's approval of its new drug application (collectively "Takeda"), have moved in this patent litigation to compel defendant generic drug companies Alphapharm Pty. Ltd. ("Alphapharm") and Genpharm, Inc. ("Genpharm") to produce all documents concerning patent searches performed and scientific positions formulated by non-legal employees of the defendants' sister company, Generics U.K. This Opinion addresses whether documents reflecting patent searches conducted and analyzed by a generic drug manufacturer are protected by the work product doctrine as documents prepared "in anticipation of litigation" as set forth in Rule 26(b)(3), Fed.R.Civ.P.


  In addition to the instant action, Takeda has also brought suit against three other sets of defendants, alleging similar claims for patent infringement and inducement of patent infringement with respect to the patents underlying Actos.*fn1 In a June 9, 2004 Opinion and Order in one of those actions, this Court described the means by which manufacturers seek FDA approval to market generic drugs, a process that entails filing an Abbreviated New Drug Application ("ANDA"). See Takeda Chem. Indus., Ltd. v. Watson Pharms., Inc., 329 F. Supp. 2d 394, 397-98 (S.D.N.Y. 2004). Familiarity with the June 9 Opinion is assumed, and its discussion of the ANDA process is incorporated herein. Alphapharm and Genpharm are subsidiaries of Merck Generics, KgaA ("Merck Generics"), as is Generics U.K., a non-party to this litigation. According to the defendants, each of the three subsidiaries have been given "separate responsibilities" for supporting the research, development, marketing, and sale of Merck Generics' pharmaceutical products throughout the world. Of particular importance to this motion, Generics U.K. handles the "investigation" of all patents concerning brand-name pharmaceuticals of interest to Merck Generics.

  Having developed an interest in marketing generic pioglitazone in March 2001, based on a projection of the dollar value of estimated sales of the drug and the conclusion that this presented a "sound business opportunity," Merck Generics asked Generics U.K. to investigate its patent status. As with any drug it is investigating for development, Generics U.K. conducted a patent search. When Generics U.K. locates a "blocking patent," Generics U.K. analyzes whether the patent is "acceptable" or whether it is subject to attack as invalid. In the latter instance, it formulates a plan.

  Following its customary procedure, Generics U.K. examined an FDA publication known colloquially as the "Orange Book," in which patents that claim an approved or pending use of a new drug are listed, and learned that Takeda is the assignee of U.S. Patent 4,687,777 ("`777 Patent"), which is "directed to the pioglitazone molecule itself." Takeda, 329 F. Supp. 2d at 398-99. Apparently following additional searches and analysis, Generics U.K. decided that it could attack the `777 Patent as invalid based on a prior patent. On January 29, 2004, Genpharm notified Takeda that Alphapharm had filed an ANDA to market a generic version of pioglitazone and that Alphapharm had certified therein that the `777 Patent was "invalid or unenforceable."*fn2 Where an ANDA is filed to "obtain approval . . . to engage in the commercial manufacture, use, or sale of a drug . . . claimed in a patent or the use of which is claimed in a patent before [its] expiration," 35 U.S.C. § 271(e)(2), the ANDA constitutes an act of patent infringement as a matter of law. Therefore, the filing of a certification of invalidity invariably leads to litigation, as it did here. On March 12, 2004, Takeda sued Alphapharm and Genpharm, alleging, inter alia, that by filing the ANDA, Alphapharm and Genpharm had infringed upon the `777 Patent under 35 U.S.C. § 271(e)(2)(A).

  While Generics U.K. is capable of doing patent searches without assistance from counsel, it has discussed how to conduct patent searches on compounds that Merck Generics intends to market in the United States with Jeffrey A. Hovden ("Hovden"), a partner with the United States law firm Frommer, Lawrence, and Haug LLP ("FLH"). In the summer of 2001, Hovden met with Dr. Paul Jenkins ("Jenkins"), who supervises the Generics U.K. team responsible for exploring "intellectual property positions in target markets" on behalf of all Merck Generics subsidiaries (the "Patents Group"), and discussed how the Patents Group carries out its prior art searches and its analysis of that art.*fn3 In addition, Hovden and Jenkins talked about how "Merck Generics should in the first instance proceed with patent searches regarding compounds that Merck Generics intends to market in the United States." Hovden gave Jenkins specific "instructions" as to how to conduct the patent searches relating to pioglitazone, and in May 2005, Hovden confirmed with Jenkins that the searches for prior art related to pioglitazone "were performed pursuant" to his instructions.*fn4

  Through a May 17, 2005 letter, Takeda requested an order compelling defendants to produce "all documents concerning patent searches performed by non-legal employees of Generics U.K. and scientific positions formulated by non-legal employees of Generics U.K." The defendants responded with a May 19 letter in which they asserted that the documents sought by Takeda are "clearly privileged under the work product doctrine" of Rule 26(b)(3), Fed.R.Civ.P. Pursuant to an Order of that date, the parties thereafter submitted briefs as to whether defendants have properly claimed protection under the work-product privilege.


  Rule 26(b)(3), Fed.R.Civ.P., provides:
Subject to the provisions of subdivision (b)(4) of this rule, a party may obtain discovery of documents and tangible things otherwise discoverable under subdivision (b)(1) of this rule and prepared in anticipation of litigation or for trial by or for another party or by or for that other party's representative (including the other party's attorney, consultant, surety, indemnitor, insurer, or agent) only upon a showing that the party seeking discovery has substantial need of the materials in the preparation of the party's case and that the party is unable without undue hardship to obtain the substantial equivalent of the materials by other means. In ordering discovery of such materials when the required showing has been made, the court shall protect against disclosure of the mental impressions, conclusions, opinions, or legal theories of an attorney or other representative of a party concerning the litigation.
(Emphasis supplied.)

  This portion of Rule 23 codifies the principles concerning the work product privilege enunciated in Hickman v. Taylor, 329 U.S. 495, 510-11 (1947). In United States v. Adlman, 134 F.3d 1194 (2d Cir. 1998), the Second Circuit interpreted for the first time the phrase "in anticipation of litigation," holding that a document falls within Rule 26(b)(3) where "in light of the nature of the document and the factual situation in the particular case, the document can fairly be said to have been prepared or obtained because of the prospect of litigation." Id. at 1202 (citation omitted) (emphasis in original). In adopting this definition of "in anticipation of litigation," the Adlman court noted that "[w]hether it can fairly be said that [a particular document] was prepared because of [an] expected litigation really turns on whether it would have been prepared irrespective of the expected litigation." Id. at 1204. Therefore, in order to win protection for a particular document, the party seeking such protection must prove that it "was created because of anticipated litigation, and would not have been prepared in substantially similar form but for the prospect of that litigation." Id. at 1195 (emphasis supplied). Conversely, documents "prepared in the ordinary course of business or that would have been created in essentially similar form irrespective of the litigation" are not entitled to protection even if they "might also help in preparation for litigation." Id. at 1202.

  The defendants do not contend that the withheld materials contain "mental impressions, conclusions, opinions or legal theories of an attorney or other representative" of the defendants, see Rule 26(b)(3), Fed.R.Civ.P., and thus, there is no argument that the documents fall within the most protected category of work product. The issue is whether the documents are eligible for work product protection, and if they are, whether Takeda has shown a substantial need for the documents. The burden of establishing eligibility is on the defendants, who are the parties asserting the privilege. See United States v. Constr. Prods. Research, Inc., 73 F.3d 464, 473 (2d Cir. 1996).

  The defendants have not shown that the patent searches they conducted or the scientific positions they formulated up to the time that they determined that the pioglitazone patent was subject to attack as invalid are eligible for work product protection. The defendants are generic drug manufacturers who are in the business of identifying compounds and manufacturing and selling them. They regularly conduct at least initial patent searches, including those that identify the existence of relevant patents and that shed light on the vulnerability of those patents to an attack of invalidity based on prior art, and do analyses of those searches in the ordinary course of their business. The outcome of these searches and analysis is by no means certain. Rather, the searches and analysis may yield a range of different results and may suggest varied courses of action, most of which do not contemplate, much less provoke, litigation.

  For instance, should no "blocking" patent be discovered, then manufacture and sale may proceed without fear of or plans for litigation. Conversely, in the event a "blocking" patent is identified, further searches and analysis will ensue. Where such searches lead to an assessment that the "blocking" patent is valid, a company may abandon plans for the manufacture of the compound. Alternatively, an assessment that the blocking patent is valid may cause a company to refrain, at a minimum, from filing a Paragraph IV certification and to direct its efforts at marketing the compound only after the patent expires. Only where a search discovers a ...

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