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June 22 — TWi Pharmaceuticals Inc.'s documents on the solubility of a generic drug it was testing aren't privileged and must be turned over, a court said June 21 ( Supernus Pharmaceuticals, Inc. v. TWi Pharmaceuticals, Inc., D.N.J., No. 15-00369, letter opinion, 6/21/16 ).
In a June 21 letter decision, Magistrate Judge Joel Schneider of the U.S. District Court for the District of New Jersey said TWi's testing documents weren't privileged because the main purpose of the tests was to help TWi prepare and file its application with the Food and Drug Administration to make a generic version of Supernus's seizure drug Oxtellar XR, not to provide legal counsel.
The ruling is an important caution to patent litigators involved in litigation over abbreviated new drug applications, Edgar H. Haug of Frommer Lawrence & Haug LLP in New York, lead counsel for Supernus, said June 21. “The opinion should serve to dispel a common misperception held by many patent litigators that merely ‘involving’ yourself in testing conducted by your client, no matter what the purpose, will shield that testing from discovery,” Haug said in a press release Frommer Lawrence & Haug LLP issued on the ruling.
“If testing does need to be conducted solely for litigation purposes, outside counsel is better off engaging a third-party laboratory to avoid any argument that the tests have a different primary purpose (e.g., research and development),” Haug added.
TWi didn't respond to a request for comment on the case.
In the opinion, the magistrate judge granted Supernus’s motion to compel 33 documents relating to TWi’s solubility testing of oxcarbazepine, the active ingredient in Oxtellar XR, in the presence of excipients.
Pharmaceutical excipients are substances other than the active ingredient that are included in finished drug products. Excipients are often used to increase the solubility, stabilization or absorption of the active ingredient.
TWi said it had unintentionally produced the testing-related documents, which it said were protected by the attorney-client privilege and the work product doctrine. TWi subsequently took back the documents.
Supernus then asked the court to order TWi to again produce the 33 clawed-back documents.
Supernus argued that the test results documents were “important because they show that ingredient(s) in defendant’s accused tablets enhance the solubility of oxcarbazepine, thereby proving infringement of that claim limitation,” the opinion said.
According to the opinion, TWi argued that the documents “relate to tests that were conducted by TWi at the direction of counsel for the purpose of obtaining legal advice and in anticipation of litigation.” It said it conducted the tests “in an attempt to replicate the testing done in the patents-in-suit” and that the documents weren't related to its “technical ANDA [abbreviated new drug application] submission to the FDA.”
But after reviewing the disputed documents, the magistrate judge sided with Supernus and ordered TWi to produce the documents.
“[W]hat is compelling to the Court is that defendant’s tests were not primarily prepared for the purpose of rendering legal advice or preparing for anticipated litigation,” he wrote. Instead, the magistrate judge concluded that the purpose of the tests was “to conduct research and development in order to assist TWi to prepare and file its ANDA, and to decide what ingredients to use.”
“[U]nfortunately for defendant, counsel incorrectly assumed that merely because he was ‘involved’ with defendant’s testing that defendant’s test results would be privileged,” Schneider wrote.
Supernus is based in Rockville, Md.; TWi is a Taiwanese company with U.S. operations based in Irvine, Calif.
Frommer Lawrence & Haug LLP in New York and Saul Ewing, LLP in Newark, N.J., represent Supernus.
Fox Rothschild LLP in Lawrenceville, N.J. represents TWi.
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A copy of the letter opinion is available at http://src.bna.com/f7X.
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