Case 1 :04-cv—00833-KAJ Document 100 Filed 09/ 1 5/2005 Page 1 of 3
Asn-sev & GEDDES
ATTORNEYS AND COUNSELLORS AT LAW TELEPHONE
222 DELAWARE AVENUE °°Z_"4"â€Â°
P. O. BOX II5O aozézzmg-gev
WILMINGTON. DELAWARE I9899
September 15, 2005
BY ELECTRONIC FILING
The Honorable Kent A. Jordan
United States District Court
844 King Street
Wilmington, DE 19801
Re: Pharmacia & Upjohn Company v. Sicor Inc. and Sicor Pharmaceuticals Inc.
C.A. No. 04-833-KA]
Dear Judge Jordan:
We, along with Sormenschein Nath & Rosenthal LLP, represent defendants Sicor Inc.
and Sicor Pharmaceuticals, Inc. (collectively, "Sicor") in the above-referenced patent dispute.
Because one of the issues that we anticipate plaintiff Pharmacia & Upjohn Company LLC
("Pharmacia") raising at Monday’s discovery dispute teleconference concerns willfulness
discovery, we write to advise the Court that Sicor intends to move, pursuant to Fed. R. Civ. P.
42(b), for: l) separate trials on the issue of liability, on the one hand, and willfuhiess and
damages on the other; and 2) a stay of discovery relating to the willfuhress issue until after
liability is determined. The following is a brief recitation of the reasons for Sicor’s anticipated
motion to stay discovery on willfuhiessz
As Your Honor is no doubt aware, plaintiff Pharmacia & Upj ohn Company LLC
("Pharmacia") has asserted that Sicor willfully inhinged Patent No. 6,107,285. In order to rebut
Pharmacia’s willfulness allegations, Sicor may assert an advice-of-counsel defense. However, if
Sicor does so, it would result in the waiver of Sicor’s attomey-client privilege with respect to at
least some of the advice it received from counsel in advance of introducing its idarubicin
hydrochloride (HCl) injection product into the market. Absent bifurcation and a stay of
willfulness discovery (which discovery Pharmacia has been pressing for and has advised Sicor it
intends to pursue with the Court), Sicor will face the Hobson’s choice of asserting an advice-of-
counsel defense — thereby waiving the attorney-client privilege — or maintaining the privilege
and risking a finding of willful infringement and the concomitant potential of an enhanced
damage award. At this stage of the case, where Sicor has not been found to have inninged
Phannacia’s patent or otherwise acted wrongfully, there is no reason to require Sicor to make
such a choice.
As Your Honor suggested in Chimie v. PPG Industries, Inc., 218 F.R.D. 416, 417-418
(D. Del. 2003), the dilernrna Sicor now faces is frequently brought to the trial court’s attention in
patent cases. It is often remedied by the exact bifurcation order Sicor will seek in its motion.
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The Honorable Kent A. Jordan
September 15, 2005
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This issue was squarely addressed by the U.S. Court of Appeals for the Federal Circuit in
Quantum Corp. v. T andon Corp., 940 F.2d 642 (Fed. Cir. 1991). The Federal Circuit stated:
An accused infringer, therefore, should not, without the trial
c0m*t’s careful consideration, be forced to choose between waiving
the privilege in order to protect itself from a willfulness fmding, in
which case it may risk prejudicing itself on the question of
liability, and maintaining the privilege, in which case it may risk
being found to be a willful infringer if liability is found. Trial
courts should thus give serious consideration to a separate trial on
willfuhiess whenever the particular attomey-client
communications, once inspected by the court in-camera, reveal
that the defendant is indeed confronted with this dilemma.
Id. 643-44.
Separate trials of liability and willfuhiess/damages are essential to protect Sicor’s rights
in this case, and will also promote an efficient, clear and just resolution of the issues by a jury.
The liability, willfulness and damages issues are wholly distinct and thus ideal candidates for
bifurcation, and the potential prejudice to Sicor if bifurcation is not granted will be manifest. For
the same reason, Sicor believes that the Court should stay discovery relating to the willfuhiess
issue. Pharmacia should not have the benefit of reviewing — before liability is even established —
the legal advice Sicor received in connection with its introduction of its idarubicin HCl injection
product.
As the Federal Circuit implicitly recognized in Quantum, the prejudice associated with
such discovery is significant- it would invade the "fundamental values sought to be preserved
by the attorney-client privilege" — an invasion that, once made, carmot be undone. Id. Sicor
should not be forced to waive its fundamental right to assert the privilege unless and until it is
found liable for infringement in the first place.
Courts around the country often stay willfu1ness—related discovery until liability is found
for precisely this reason. See, e. g., Plasmanet, Inc. v. Apax Partners, Inc., No. 02-Civ-9290
(BSJ)(THK), 2003 U.S. Dist. LEXIS 13533, at *10 (S.D.N.Y. Aug. 1, 2003) ("[T]he Court
concludes that the prejudice to Traffix by being required to disclose the Opinion [of counsel] far
outweighs any prejudice to Plaintiff by deferring discovery on reliance on the Opinion"); St.
Clair Intellectual Property Consultants, Inc. v. Sony Corp., No. 01-557-JJF, 2002 U.S. Dist.
LEXIS 15430, at *4-5 (D. Del. Aug. 16, 2002) ("After reviewing the documents submitted by
Sony, the Court finds that undue prejudice could result if these otherwise privileged docmnents
were exchanged and used during the trial of the infiingement and validity issues."); Avia Group
International, Inc. v. Nike, Inc., No. Civ. 91-326-JU, 1991 WL 340569, at *4 (D. Ore. Nov. 21,
1991) ("Because willfulness is not relevant to the issue of liability, Nike’s request to stay all
attomey-client privileged information and attorney work product related to willfulness until after
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The Honorable Kent A. Jordan
September 15, 2005
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a determination of liability is reasonable. Nike will be unfairly prejudiced if it is required to
divulge the contents of its private communications with counsel prior to a determination on
liability because such communications typically discuss legal theories and strategy."). This
Court should reach the same conclusion in this case.
On Tuesday morning, September 13, Reid Ashinoff of the Sonnenschein firm apprised
Pharmacia’s counsel of Sicor’s intention to move for this relief. Pharmacia took Sicor’s request
to consent to bifurcation under advisement, but continues to press for discovery concerning
willfulness issues.
Thank you for your attention to this matter, and we look forward to discussing these
issues with the Court.
Respectfully,
/s/ John G. Day
J olm G. Day (I.D. #2403)
JGD: nml
161422.1
cc: Maryellen Noreika (by hand)
Daniel A. Boehnen (via facsimile)
Reid L. Ashinoff (via facsimile)
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