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Fresenius Medical Care Holdings, Inc. v. Roxane Laboratories

February 16, 2007


The opinion of the court was delivered by: Judge Sargus


This case is before the Court to consider Roxane's motion to compel counterclaim discovery, one of three discovery-related motions filed on January 4, 2007. In this motion, Roxane asks the Court to compel Nabi to make further responses to one interrogatory and two document requests as well as to produce its general counsel, Anne Mack, for a deposition. For the following reasons, the motion will be denied.


Again, an extensive recitation of facts is not necessary. The discovery which is at issue with respect to this motion relates to Roxane's antitrust counterclaim. Roxane asserts that by filing this litigation, and more particularly by amending the complaint to assert a claim that Roxane's proposed calcium acetate product would infringe not only the '665 patent but the '445 patent, Nabi has engaged in sham litigation in violation of the antitrust laws. That is so, according to Roxane, because it supplied Nabi with enough information about the way in which it manufactures its proposed calcium acetate product to demonstrate conclusively that no patent infringement would occur. Roxane has requested Nabi to produce the results of Nabi's pre-suit testing on Roxane's product. While acknowledging that the test results might be considered work product, Roxane contends that it has shown a substantial need for the information and that it cannot be obtained elsewhere. Consequently, it asserts that the Court should order any and all information relating to Nabi's pre-suit testing of Roxane's calcium acetate product to be produced.

Nabi contends that Roxane made the same request with respect to information concerning why Nabi concluded that Roxane is infringing the '665 patent. According to Nabi, the Court essentially ruled that this discovery was impermissible, and the same rationale should apply to discovery relating to its claims under the '445 patent. In response, Roxane contends that Nabi's reliance on the "law of the case" doctrine is inapposite because the doctrine does not ordinarily apply to discovery orders, and that, in any event, circumstances have changed since the Court made its oral ruling with respect to the discovery directed to the '665 patent. In particular, Roxane contends that the addition of claims under the '445 patent and its subsequent assertion of the counterclaim justify reaching a different result with respect to the discovery at issue. The Court will, in this order, take a fresh look at the basis for Roxane's requests.


Roxane relies heavily upon the decision in Loctite Corp. v. Fel-Pro, Inc., 94 F.R.D. 1 (N.D. Ill. 1980) in support of its position that this information is producible. In that case, the plaintiff owned four different patents for products in the field of anaerobic sealants and adhesives. In an effort to determine the basis for the plaintiff's claims of patent infringement, the defendant deposed the corporate officer having the most knowledge about the factual basis of those claims. That witness refused to provide any evidence about testing which had been performed on the defendant's allegedly infringing products. The court subsequently held that the results of Loctite's pre-suit tests were not privileged and could not be withheld on work-product grounds. Loctite nevertheless continued to refuse to provide the information, but finally did so pursuant to a court order. Because the information indicated that no infringement had occurred, the case was dismissed on summary judgment. Loctite was then sanctioned because it had continued to press the litigation after it became clear, based upon the test results, that there was no basis for the suit. The court also awarded attorney's fees based upon its finding that the case was an exceptional case and therefore covered by 36 U.S.C. §285.

During the course of its opinion granting sanctions, the court stated that "[a]n alleged infringer must have access to tests conducted by a patentee where those are the only facts which plaintiff has to support its charges of infringement." Loctite, 94 F.R.D. at 10, citing E.I. DuPont de Nemours & Co. v. Phillips Petroleum Co., 24 F.R.D. 416, 421-23 (D.C. Del. 1959). The court also held that when, as the litigation progresses, the record creates a "suspicion" that the plaintiff is proceeding in violation of Rule 11, "exceptional circumstances" then exist so that discovery of otherwise protected material may be had as contemplated by Federal Rule of Civil Procedure 26(b)(4)(B). The trial court's decision was affirmed on appeal, although the case was remanded for additional proceedings with respect to the amount of attorney's fees to be awarded. Loctite Corp. v. FelPro, Inc., 667 F.2d 577 (7th Cir. 1981). In its opinion, the Court of Appeals noted that the work-product doctrine is primarily concerned with "legal assistance" and that "technical information is otherwise discoverable," and also observed that the work-product privilege is not absolute and when "the benefit to the resolution of the suit outweighs the potential injury to the party from whom discovery is sought...disclosure is required." Loctite, 667 F.2d at 582. The Loctite decision has been cited with approval for the proposition that "if a test has been made concerning a product which plaintiff claims is relevant to the patents at issue, it is part of discovery and defendants are entitled to access the reports of that test." AM Intern., Inc. v. Eastman Kodak Co., 1982 W.L. 171002, *1003 (N.D. Ill. October 25, 1982).

The instant case differs from Loctite in a number of respects. Perhaps most importantly, the Court cannot say at this point that anything in the record has raised the suspicion that Nabi has proceeded with its claims of infringement without any factual basis for those claims. The parties have a significant dispute about whether Roxane's manufacturing process ultimately results in the compaction of the calcium acetate material which falls within the parameters specified in the patents. There is also substantial disagreement about whether the pre-suit information and sample materials supplied by Roxane allowed Nabi to do any conclusive testing on Roxane's product. As the record of the oral hearing before the Court held on September 6, 2006 indicates, Nabi does not believe that without access to the machinery used by Roxane in the manufacturing process, it can adequately determine that Roxane was not infringing the patent. Thus, to the extent that Loctite stands for the proposition that a sufficient showing to overcome work-product privilege is made when it becomes fairly apparent both that the plaintiff conducted pre-suit testing and the results of that testing were completely inadequate to justify claims of patent infringement, Loctite does not apply here.

Further, the Court completely rejects Roxane's argument that it has demonstrated a substantial need for these documents simply because it has counterclaimed for an antitrust violation. Ordinarily, a party may not overcome a privilege or protection afforded to the opposing party in litigation simply by asserting a claim which makes that information relevant. A showing of substantial need for work-product information in the hands of an opponent is much stronger if the reason for producing the information is to allow the requesting party to defend itself against the other party's claims rather than to allow it to prosecute its own claims. In that regard, the Court notes that in Loctite, the alleged infringer did need the results of pre-suit testing to defend against the claims of infringement, whereas here, information necessary both to prosecute and defend against the infringement claims appear to be equally accessible to both parties.

The Court has some reservation, however, about concluding that the test results themselves are protected by the work-product doctrine. Certainly, to the extent that Nabi requested materials from Roxane in order to perform pre-suit testing and then provided its attorneys with the results of that testing in order to permit them to determine whether a patent infringement suit could be filed, the reports of the testing would have been prepared in anticipation of litigation and would therefore be covered by the work-product privilege. However, to the extent that the reports contain strictly factual information rather than legal conclusions or opinions, that factual information cannot be immunized from discovery simply by incorporating it into a document which is entitled to work-product protection. Obviously, Roxane is entitled to discover any information in Nabi's possession which sheds light on Nabi's claim that an infringement has occurred, including information known to Nabi which might indicate that, as Roxane claims, its product does not infringe. However, Roxane's discovery requests call for the production of documents and information covered by the work-product privilege, and specifically the production of the pre- suit test reports, rather than asking more generally for the reasons why Nabi believes an infringement has occurred.

Ultimately, the question of infringement will turn on whether or not there are facts to support the proposition that Roxane's process is covered by the claims in the patents in suit. If plaintiffs are able to produce credible evidence from testifying experts that Roxane's product infringes, they will, of course, be required to produce the results of any tests performed by those experts. If that evidence is sufficient to satisfy Rule 11, it would appear to negate any claim that Nabi instituted the suit knowing that no infringement occurred and violated the antitrust laws by doing so. If, conversely, Nabi's experts are completely unable to articulate a theory or produce any results to support the claim of infringement, the record might then suggest that, especially because Nabi did perform pre-suit testing, it proceeded without any basis in fact for doing so. At that point, any privilege related to pre-suit test results might be vitiated because both Roxane and the Court would need to determine what Nabi knew, and when Nabi knew it, about the likelihood that no infringement occurred. Because the case is not at that point, however, the Court concludes that this case is sufficiently distinct from the situation presented in Loctite to deny Roxane access to Nabi's privileged materials.


The other issue raised by Roxane's motion relates to its request to depose Anne Mack, Nabi's general counsel. Roxane asserts that Ms. Mack played a significant role in the negotiations through which Nabi obtained the '445 and '665 patents and that, in particular, she engaged in discussions with the inventors listed on those patents about the likelihood that competition would emerge ...

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