Ferring Pharmaceuticals Inc. v. Serenity Pharmaceuticals, LLC

Background

Ferring Pharmaceuticals Inc., Ferring B.V., and Ferring International Center S.A. sued Serenity Pharmaceuticals, LLC and Reprise Biopharmaceutics, LLC for a declaration that certain patents associated with Dr. Seymour Fein were invalid, unenforceable, and not infringed by Ferring’s product NOCDURNA. Serenity and Reprise asserted patent-infringement counterclaims against Ferring. Their claimed damages included patent royalties and lost profits, and they also sought a permanent injunction.

Ferring moved under Federal Rule of Civil Procedure 26(e) to compel the counterclaimants to supplement their damages-related document production. Ferring relied in part on information arising from Avadel Specialty Pharmaceuticals’ Chapter 11 bankruptcy proceeding. The requests involved eleven categories of documents, including materials concerning Noctiva, efforts to find a new commercial partner or manufacturer, negotiations, commercialization efforts, and the damages analysis of the counterclaimants’ expert, Dr. Christopher Vellturo.

Legal standard

Rule 26(e) requires a party to timely correct or supplement a disclosure or discovery response if it later learns that the response is materially incomplete or incorrect and the new information has not otherwise been provided. The duty to supplement can continue after the discovery period ends. The court also explained that whether information is discoverable is different from whether it will ultimately be admissible at trial.

Analysis

For Categories 1 through 4, Ferring had agreed not to seek document production from Avadel and therefore could seek those documents only if they were in Serenity’s or Reprise’s possession, custody, or control. Serenity and Reprise represented that they had no responsive documents. The court therefore denied as moot the motion to compel production for those categories.

Category 7 concerned documents related to CPEX Pharmaceuticals, Inc.’s contention that Serenity could not extend a valid sublicense to CPEX technology. The court found that this issue related directly to Ferring’s existing request for documents about Serenity and Reprise’s statement that Avadel and Serenity could fully satisfy patient demand for Noctiva. The court ordered supplementation for Category 7.

Category 11 concerned documents related to Avadel’s allegation that Serenity breached contractual obligations owed to Avadel. Because Avadel made the allegation and Ferring had agreed not to obtain document production from Avadel, the court declined to order production for Category 11.

Categories 5 and 6 concerned efforts to find parties to assume Avadel’s rights or obligations and efforts to find a new manufacturer or negotiate new manufacturing terms for Noctiva. Categories 8 through 10 concerned communications and negotiations involving Noctiva and documents related to Serenity’s allegation that Avadel failed to use commercially reasonable efforts to commercialize Noctiva.

The counterclaimants offered to dismiss their permanent-injunction claim without prejudice and to limit or supplement their lost-profits analysis. The court found those offers insufficient because they addressed only part of Ferring’s concerns and reserved the possibility of later seeking injunctive relief or additional lost profits. The court also found that the requested documents related to determining a reasonable royalty. It rejected the argument that documents created after the assumed date of a hypothetical royalty negotiation were automatically outside the scope of discovery, explaining that later-created documents can be relevant to earlier events.

Disposition

The court granted in part and denied in part Ferring’s letter motion. It ordered Serenity and Reprise to produce, within 30 days, documents responsive to Categories 5 through 10. The order did not require production for Categories 1 through 4 or Category 11. The opinion was signed by Stewart D. Aaron, United States Magistrate Judge.