District Court’s Handling of “Prejudicial” Discovery Violation Upheld after Proceeding to Trial on ANDA Infringement Claims
On February 9, 2018, in Merck Sharp & Dohme Corp v Amneal Pharm. LLC, the U.S. Court of Appeals for the Federal Circuit held that the District Court did not abuse its discretion in proceeding to trial despite a party’s violation of a discovery order where the court took adequate steps to ensure the opposing party would not be prejudiced.
In 2014, Amneal submitted an Abbreviated New Drug Application (ANDA) to the FDA disclosing a generic version of Merck’s Nasonex®. Thereafter, Merck filed an infringement suit against Amneal alleging that the active agent in Amneal’s nasal spray would necessarily convert to the patented “MFM” form over its two-year shelf-life.
Pursuant to a discovery order, Amneal was obligated to exchange all “representative commercial batches” of its product. Notwithstanding this directive, Amneal only produced one (1) of three (3) batch-samples, on the grounds that production of the remaining batches would be cumulative.
Shortly before trial, Merck sought emergency relief from the District Court, requesting that Amneal be directed to produce the previously withheld samples. Although the District Court found that Amneal’s actions violated a standing discovery order, the court nevertheless refused to compel production of the samples and proceeded to trial.
On appeal, the Federal Circuit held that the District Court did not abuse its discretion because it “took adequate steps to ensure that proceeding with trial would not prejudice Merck.” Specifically, Merck was given the opportunity to present evidence at trial that the unproduced samples were materially different from the previously-exchanged samples for the purposes of infringement. Thus, considering the steps taken to allow Merck the opportunity to prove that Amneal’s discovery violation was prejudicial, the Federal Circuit upheld the District Court’s decision to proceed to trial.
Next, on the issue of infringement, Merck argued that the District Court improperly based its non-infringement finding on Amneal’s intermediate product (Day 1 Batch), rather than its final, commercial product (Day 4 and A Batches). However, the Federal Circuit rejected Merck’s arguments for several reasons.
As previously stated, Merck had the opportunity to prove that the Day 4 and A Batches differed from the Day 1 Batch samples, but failed to establish a material difference at trial.
Moreover, the Federal Circuit noted that Merck’s arguments improperly sought to impose a heightened evidentiary standard to ANDA cases, not supported by existing precedent. Although an infringement analysis under 35 U.S.C. §271(e)(2) must focus on what will likely be marketed, the Federal Circuit has never required that the proof of infringement in the ANDA context be based on any particular sample. Regardless of the type of sample (e.g. commercial or batch), the critical inquiry is whether the sample is representative of what is likely to be approved and marketed. Accordingly, the Federal Circuit upheld the District Court’s non-infringement finding since the Day 1 Batch samples were representative of its ANDA-product.
Finally, the Federal Circuit found no clear error in the District Court’s fact-finding on non-infringement. Although Merck’s expert testified that he identified a single Raman peak characteristic of MFM in Amneal’s Day 1 Batch samples, his testimony was sufficiently rebutted. Specifically, Amneal’s expert opined that three (3) Raman peaks were required to confirm the presence of MFM in Amneal’s ANDA product. Because the District Court’s finding was supported by credible expert testimony, the Federal Circuit concluded that the District Court did not clearly err in its non-infringement finding.