The opinion of the court was delivered by: Robert P. Patterson, Jr., U.S.D.J.
Defendants Apotex Inc. and Apotex Corp. filed this motion to compel discovery by Plaintiffs Unigene Laboratories, Inc., and Upsher-Smith Laboratories, Inc., and seek to abrogate the attorney-client and work product privileges based on evidence of fraud. For the following reasons, Defendants' motion (Doc. No. 63) is denied.
On August 27, 2002, the U.S. Patent and Trademark Office (the "PTO") issued U.S. Patent No. 6,440,392 (the "'392 patent"), entitled "Nasal Calcitonin Formulations." (Wayda Decl., Ex. A, cl.1.) Plaintiff Unigene Laboratories, Inc. ("Unigene"), is the owner of the '392 patent by assignment from Dr. William Stern, the sole inventor of the '392 patent. The patented calcitonin formulation is currently sold as a nasal spray under the trademark Fortical(r).
Plaintiff Upsher-Smith Laboratories, Inc. ("Upsher-Smith"), is a licensee of Unigene under the '392 patent with exclusive rights to market and distribute Fortical(r) in the United States. Prior to obtaining its license, Upsher-Smith engaged a patent attorney, Daniel Schulte, Esq., to perform due diligence with respect to the '392 patent. As a result of his search, Mr. Schulte provided approximately ten references, including U.S. Patent No. 6,087,338 (the "'338 patent") and U.S. Patent No. 5,912,014 (the "'014 patent"), to Ostrolenk, Faber, Gerb, and Soffen, LLP ("Ostrolenk"), the firm that had prosecuted the '392 patent for Unigene.
Upon receiving these references from Mr. Schulte, Ostrolenk became aware that the '338 patent might anticipate one of the claims of the '392 patent. (Wayda Decl., Ex. H, 65:3-24.) On February 5, 2004, Ostrolenk filed a reissue application of the '392 patent (Pokotilow Decl., Ex. S), canceling claims anticipated by the '338 patent and amending and adding other claims. Included with the reissue application was a new Information Disclosure Statement (id., Ex. T), which cites a number of relevant patents and publications. Among the cited patents was the '014 patent, also invented by Dr. Stern. (Id., Ex. T at Sheet 3 of 5.)
The reissue application is still pending at the PTO. On February 11, 2005 and March 7, 2007, the Examiner issued a first Office Action (Wayda Decl., Ex. J) and a second Office Action (id., Ex. L), rejecting all of the amended and new claims over a number of references on a variety of grounds, but not rejecting any of the pending reissue claims over the '014 patent (see id., Ex. J at 2-7 & Ex. L at 2-7). At oral argument, the Court was advised that the Examiner has continued to examine the claims in the reissue application, but has not yet based a rejection of a claim on the '014 patent.
On August 29, 2007, Dr. Stern and Mr. William Gray, Esq., of Ostrolenk interviewed with the Examiner. (Id., Ex. M at 14.) At the interview, Dr. Stern and Mr. Gray informed the Examiner of errors in the specification and tables of the '392 patent (id., Ex. M at 16), of which Dr. Stern has stated he first became aware while collecting documents for production in the instant litigation (id., Ex. C, 55:1-20, 88:0-89:24). Specifically, the Examiner was informed of an incorrect entry in Table 3 (id., Ex. M at 16), which represents the effect of various concentrations of citric acid on the shelf life of salmon calcitonin (id., Ex. A, cl.6, tbl.3). The number 20 was incorrectly entered instead of the number 52 for the percent salmon calcitonin recovered after fifteen days of storage at 50 §C for the sample containing 100 millimoles (mM) of citric acid. (See id., Ex. M at 8.)
On September 7, 2007, Mr. Gray submitted an Amendment/Submission in response to the March 7, 2007 Office Action (Wayda Decl., Ex. M), accompanied by a second declaration of Dr. William Stern (id., Ex. N). In the Amendment/Submission, Mr. Gray corrected the errors in the specification and tables and substantively responded to each of the Examiner's rejections. (Id., Ex. M.) The Examiner has not yet responded to the September 7, 2007 submissions.
Defendant Apotex Inc. is a large Canadian pharmaceutical company that manufactures generic pharmaceuticals and distributes them in the United States. Its subsidiary, Defendant Apotex Corp., assists Apotex Inc. in obtaining U.S. Food and Drug Administration ("FDA") approval for the pharmaceuticals Apotex Inc. plans to manufacture and distribute. On or about June 1, 2006, Apotex Inc. submitted an Abbreviated New Drug Application ("ANDA") to the FDA seeking FDA approval to engage in the commercial manufacture, use, offer for sale, sale, and/or importation of a generic version of Fortical(r) before the expiration of the '392 patent. (Compl. ¶¶ 21, 25.) The same day, Apotex Inc. sent a Certification Letter to Plaintiffs, pursuant to federal statute, advising that Defendants had submitted an ANDA for a salmon calcitonin nasal spray and stating the grounds on which Defendants believe the '392 patent is invalid and unenforceable. (Id. ¶¶ 24, 26.)
On July 24, 2006, Unigene and Upsher-Smith filed a complaint against Apotex Inc. and Apotex Corp. (collectively "Apotex"), claiming that Apotex is liable for the infringement of the '392 patent by virtue of its activities supporting its ANDA. The litigation is now in the discovery phase. Defendants assert that Plaintiffs, invoking the attorney-client privilege and work product privilege, have refused to produce certain documents in response to document requests and refused to answer many questions during depositions of Unigene's counsel, Upsher-Smith's counsel, and Dr. Stern. With the instant motion, Defendants seek to abrogate the attorney-client privilege and work product privilege based on the crime-fraud exception and to compel discovery by Plaintiffs of "all documents including [privileged documents] referring to, mentioning or relating to the prosecution of the '392 patent." (Defs.' Mem. Supp. Mot. Compel Disc. at 1.)
B. Description of the Relevant Patents
The '014 patent, entitled "Oral Salmon Calcitonin Pharmaceutical Products," is directed to enteric-coated solid pharmaceutical formulations comprising salmon calcitonin that are intended for oral administration. (Wayda Decl., Ex. F, cl.1.) The '392 patent, or the patent in suit, is directed to intranasal pharmaceutical formulations comprising calcitonin and specific concentrations of citric acid or a salt thereof acting as both a stabilizer and an absorption enhancer. (Id., Ex. A, cl.1.) Both patents are directed to formulations containing the active ingredient salmon calcitonin, a peptide hormone used to treat a variety of bone-related diseases and calcium disorders, including osteoporosis. The '014 patent is directed to oral pharmaceutical compositions containing salmon calcitonin in tablet or ...