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Nabi Biopharmaceuticals v. Roxane Laboratories

September 6, 2006

NABI BIOPHARMACEUTICALS PLAINTIFF,
v.
ROXANE LABORATORIES, INC. DEFENDANT.



EXCERPT OF PROCEEDINGS

Before the Honorable Terence P. Kemp, taken before Julia Lamb, RPR, a Notary Public in and for the State of Ohio, at the Federal Courthouse, 85 Marconi Boulevard, Columbus, Ohio, on September 6, 2006, at 10:02 a.m.

EXCERPT

THE COURT: All right. I was going to start out with saying first things first. I'm not sure which is first so I'll just go in random order. With respect to the competing motions to compel and the contention interrogatories, the Court rules as follows. And as, I guess, a precursor to that ruling, I will note there appears to be no dispute about the fact at least with respect to the two of the three contention interrogatories propounded by Roxanne that the issue is not whether there is a certain quantum of discovery that needs to be completed before those can be answered, but simply when Nabi and its experts can accomplish the work, particularly in terms of stating their claim construction and describing why it is that their current product is covered by one or more of the patents involved in this case.

So I do think that that can move along pretty much independently of the discovery period. Taking everything into account in terms of what was said here this morning, I understand Roxane's argument that there may be some prejudice to its ability to try to get the case moving forward if there is a substantial delay beyond the delay that's already occurred in getting these answered. I'm not sure I'm terribly persuaded that six or eight weeks makes a significant difference in terms of advancing the case on its merits. So I looked at a calendar just to try to pick out some dates that I think are feasible, and we're going to go with November 10th for the date that those two contention interrogatories shall be answered. We didn't talk nearly as much about Roxane's answers to Nabi's contention interrogatories, but I see no reason why that can't be done on the same date so that will be the date for answers.

Obviously, as counsel pointed out this morning, if it turns out that after either more discovery or investigation takes place something about those answers appears to be incomplete, there would be need to be some supplementation, but I'm not going to set a specific date for that to occur. I do think that that has an impact on expert disclosures. Particularly I am persuaded that Roxane ought to be entitled to see the claims construction at least in that iteration of it in advance of disclosing its experts on issues of either validity or infringement. So I'm going to move that date back, the expert disclosure date back, to December 18th and then responsive reports to January 29th taking into account the holiday 19 period. And my hope is that with those dates adjusted in that fashion that that's not going to necessitate any movement of the date of the Markman hearing which I think is April 17th of next year. So that will be the schedule for that. With respect to the request for inspection, if the first question that has to be answered is there an entitlement to some kind of an inspection under Rule 34, my answer to that is, yes, there is. I believe that there is sufficient relevance certainly in this case, I guess I wouldn't go so far as to saying in every case like this, for an inspection at least of what has occurred to date as far as the manufacturing process is concerned. But certainly one of the things that Mr. Maddox says that struck a chord with me and that is that no matter how precise his expert would try to be in terms of trying to replicate this process with another piece of machinery, certainly the first question on cross-examination is going to be how closely does that resemble the process that we actually followed when we produced the registration batch. And if the answer is I'm just guessing, that's not a good situation for the Plaintiff to be in.

And I think that does make it a relevant area of inquiry. On the other hand there are a lot of things about this inspection that I think are unanswered as of yet. And so what I'm going to ask the parties to do is to try to develop some kind of an inspection protocol. I would like to see the protocol include some consideration of Nabi's request to have an operating manual, specifications, etc., for the actual R & D machine that was used to make the registration batch produced in advance, because it does seem to me that that will assist in making any inspection go much more smoothly; allowing the expert to plan out what it is he may need to do; and also may be eliminating things that otherwise would be done without that kind of information. As far as the test -- or the machine is concerned, I will ask Roxane to determine whether there is a window of opportunity for that machine to be essentially test run in the fashion that the Plaintiff proposes.

And that proposal can be fleshed out more in the protocol that you folks discuss within the next 30 to 40 days. That seems to me to be a reasonable period of time. If, in fact, that particular machine is scheduled to be in some kind of R & D production 24 hours a day for the next 30 or 40 days, then we've got an issue we are going to have to address in some way. But my hope is that won't be the situation, and you can find a window of opportunity to do that. And then I think everybody would just have to get comfortable with what exactly the experts would propose to do when they get there. And my thought is that if they are talking about doing some minor modification or retooling, bringing their own supplies to do a couple of test runs and then putting the machine back in the situation it was in before they did all that, that the cost to Roxane for that ought to be pretty minimal. And I'm assuming that these folks are expert enough in these machines in how they are set up and how they are run so that they can do that without damaging the machine in any substantial way or alternating anything that Roxane would intend to do with it in the future. So I know there is a lot of assumptions in there, but that's the way I would picture it going. And hopefully everybody can agree on that kind of thing. But if you can't, I'd be willing to revisit it in a couple of weeks after you investigated some of the factual questions and worked on some of the issues of protocol. And if you have some area of disagreement, I do think the suggestion that we have at least one interim status conference to just make sure everything is on track in this case is a good one. Although, frankly, the information you gave me today about how you've been able to put together a schedule, been able to do that cooperatively, that's encouraging to me. It shows me that there is certainly a level of cooperation and professionalism in this case which is what we expect in this Court, obviously. So I don't think I have to talk to you once a week. My suggestion would be that maybe we set a conference about six weeks out and just have everybody check in at that point. So we'd be looking at sometime mid October or so. Mr. Maddox, when are you going to be gone?

MR. MADDOX: The -- I'm sorry. The very beginning of October and the last week of October.

THE COURT: So you are okay sort of mid October?

MR. MADDOX: Sure.

THE COURT: We'll take a look at our calendar for maybe the third week in October. Mr. Schuler.

MR. SCHULER: Nothing strikes me right now in the third week of October so I'm sure either myself or Mr. Cherny or Miss Hollis can handle it.

THE COURT: We'll pick a date and send a notice. If it turns we hit you on a bad time, just let us know. And that's certainly something we can do by phone. That, to my knowledge, covers everything that we have pending at the moment. There may be some request for sanctions for attorney fees in some of these motions. None of those are going to be granted at least based on what I've heard so far. Mr. Maddox, anything else you'd like to Court to address this morning?

MR. MADDOX: Yes, Your Honor. Your rulings with respect to the two contention interrogatories I understand. There was another interrogatory in their motion asking for us to describe our pre-suit ...


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