IN RE: Eli Lilly and Company (Cephalexin Monohydrate) Patent Litigation

Case MDL No. 326 Document 2 Filed 05/04/15 Page 1 of 12
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BEFORE THE JUDICIAL PANEL £7323 nm eTON To ] SEE
MULTIDISTRICT LITIGATION SATAY ESCM i
CLRRLE TRE PLE, | .t
IN RE ELI LILLY AND COMPANY (CEPHALEXIN - .
NO.
MONOHYDRATE) PATENT LITIGATION ) DOCKET NO. 326 HG:OPINION AND ORDER _ Cs
BEFORE JOHN MINOR WISDOM*, CHAIRMAN, AND EDWARD WEINFELD¥, <n
EDWIN A. ROBSON*, JOSEPH S. LORD, III, STANLEY A. WEIGEL, . - oo
ANDREW A. CAFFREY, AND ROY W. HARPER, JUDGES OF THE PANEL - Co
PER CURIAM
‘ This litigation consists of three actions, each of SRI -
which is pending in one of three districts: the Southern ' : Co oo
District of Florida, the District of New Jersey, or the :
Southern District of New York.
} Zenith Laboratories, Inc. (Zenith) distributes an : or
oral antibiotic known as cephalexin monohydrate. Zenith's :
complaint in the New Jersey action seeks a declaratory
judgment against Eli Lilly and Co. (Lilly) to the effect
that two Lilly patents on pharmaceutical substances are :
invalid and unenforceable and that Zenith's antibiotic B Co
: {
does not infringe upon them. Lilly has countérclaimed in 1¥
the New Jersey action, charging Zenith with infringement
upon Lilly's two patents and with unfair competition, Eo nTE CL
i
* Judges Wisdom, Weinfeld and Robson took no part in EES Co
the consideration of this matter. : . }

Case MDL No. 326 Document 2 Filed 05/04/15 Page 2 of 12
basically because Zenith uses a color scheme on its antibiotic
capsule similar to that employed by Lilly on its comparable
® product.
The New York and Florida actions are each brought by
Lilly against a different Zenith customer that resells Zenith's :H
antibiotic to the pharmaceutical trade. Lilly charges the :
defendants in the New York and Florida actions with the |same type of patent infringement and unfair competition
raised in Lilly's counterclaim in the New Jersey action.
Zenith moves the Panel for an order pursuant to 28
U.S.C. §1407 transferring the New York and Florida actions
to the District of New Jersey for coordinated or consolidated
pretrial proceedings with the action pending there, Defend-
@® ants in the Florida and New York actions have joined in |
Zenith's motion. Lilly has responded that it does not believe
the issues involved in the three actions are sufficiently
complex to vexrant transfer, but Lilly nevertheless states
that it has no objection to transfer should the Panel conclude |
that transfer under Section 1407 is wppropriate.” h
We conclude that transfer under Section 1407 would not
necessarily serve the convenience of the parties and witnesses !
or promote the just and efficient conduct of this litigation
and, accordingly, we deny the motion to transfer.
1/ — All parties waived oral argument and, therefore, this
@® matter was submitted for decision on the basis of the papers
filed. See Rule 14, R.P.J.P.M.L., 65 F.R.D. 253, 264 (1975).

| Case MDL No. 326 Document3 Eiled 05/04/15 Page	3 of 12
| Zenith argues that all three actions involve the ques-
tions whether Lilly's two patents are valid and enforceable |
® and whether Zenith's antibiotic infringes upon those patents.
Section 1407 transfer, Zenith argues, would thus prevent
“duplicative discovery. Additionally, Zenith notes that Lilly
has already moved for preliminary injunctive relief in the
| New Jersey action, and Zenith suggests that Lilly may seek
similar relief in the New York and Florida actions. Accord-
ingly, Zenith argues, transfer would allow all such motions
to be considered by a single judge and would eliminate the
possibility of inconsistent pretrial rulings.
We find these arguments unpersuasive. Only three
| actions areinvolved here. Although we recognize the exisn
® tence of common questions of fact among these few actions,
movants have not met their burden of convincing us that those
common factual questions are sufficiently complex or that the
accompanying discovery will be so time consuming as to Justify
transfer under Section 1407. See In re Scotch Whiskey, 299.
F. Supp. 543, 544 (J.P.M.L. 1969). Furthermore, we note that
under the collateral estoppel principles of Blonder—-Tongue
Laboratories, Inc. v. University of Illinois Foundation, 402
U.S. 313 (1971), a holding in one action that the two Lilly
ratents are invalid would likely prove dispositive of that
®

oo Case MDL No. 326 Document2 Filed 05/04/15 Page	4 of 12
issue in the other two actions. See also In re Illinois Tool,
"Inc. v. Foster Grant Co., Inc., 547 F.2d 1300, 1302-03 (7th
® Cir. 1976). |
We observe that suitable alternatives to Section 1407 | i
transfer are available in order to minimize the possibility of ;
~ duplicative discovery. For example, notices for a particular :
deposition could be filed in all actions, thereby making the :
deposition applicable in each action; the parties could seek |
to agree upon a stipulation that any discovery relevant to |
more than one action may be used in all those actions; and |
any party could seek orders from the three courts directing | |	the parties to coordinate their pretrial efforts. See In re i
Commercial Lighting Products, Inc. Contract Litigation, 415
@® F. Supp. 392, 393 (J.P.M.L. 1976). See also Manual for Complex
| Litigation, Parts I and II, §§3.11 (rev. ed. 1977). Moreover,
the parties may seek stays of two of the actions pending the
outcome of the third.
Additionally, consultation and cooperation among the |
three concerned district courts, if deemed appropriate by : |
those courts, coupled with the cooperation of the parties, | :
would be sufficient to minimize the possibility of conflicting ;
pretrial rulings. See In re Texas Instruments, Inc, Fmploy- ;
ment Practices Litigation, ___ F. Supp. __, ___ (J.P.M.L.,
® filed December 5, 1977) (slip opinion at 4-5). ||
'

Case MDL No. 326 Document g Filed 05/04/15 Page 5 of 12
. IT IS THEREFORE ORDERED that the motion to transfer
® the actions listed on the following Schedule A be, and the
same hereby is, DENIED.

Case MDL No. 326 Document 2 Filed 05/04/15 Page 6 of 12
= * MDL-326 -- IN RE ELI LILLY AND CO. (CEPHALEXIN MONOHYDRATE) oo
PATENT LITIGATION
® SCHEDULE A
DISTRICT OF NEW JERSEY
Zenith Laboratories, Inc. v. Eli Lilly Civil Action
and Co. No. 77-1804
SOUTHERN DISTRICT OF NEW YORK :
Eli Lilly and Co. v. H. L. Moore Drug Civil Action
Exchange, a Division of/and Levitt No. 77-Civ-5005
Industries, Inc.
SOUTHERN DISTRICT OF FLORIDA
Eli Lilly and Co. v. Generix Drug Civil Action
Corp. No. 77~4749-~-Civ-NCR

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~~ Case MDL No. 326 Document 2 Filed 05/04/15 Page 7 of 12 |
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BEFORE THE JUDICIAL PANEL £7397 pon | GL Taser
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MULTIDISTRICT LITIGATION POTTICIA DL Nhs yA AT: CLERK CF THE ELE e/78 wl:
IN RE ELI LILLY AND COMPANY (CEPHALEXIN ) , E
MONOHYDRATE) PATENT LITIGATION ) DOCKET NO. 326 £
i
OPINION AND ORDER : : EE
—_— 3 : oo
BEFORE JOHN MINOR WISDOM*, CHAIRMAN, AND EDWARD WEINFELD*, ! : oe
EDWIN A. ROBSON*, JOSEPH S. LORD, III, STANLEY A. WEIGEL, oo
ANDREW A. CAFFREY, AND ROY W. HARPER, JUDGES OF THE PANEL | -
PER CURIAM |
©" This litigation consists of three actions, each of lL SE
which is pending in one of three districts: the Southern ) | ; oo
District of Florida, the District of New Jersey, or the ~
Southern District of New York.
Zenith Laboratories, Inc. (Zenith) distributes an E ol
oral antibiotic known as cephalexin monohydrate. Zenith's :
complaint in the New Jersey action seeks a declaratory .
judgment against Eli Lilly and Co. (Lilly) to the effect | oo
that two Lilly patents on pharmaceutical substances are | oCinvalid and unenforceable and that Zenith's antibiotic Ee
does not infringe upon them. Lilly has countérclaimed in L
the New Jersey action, charging Zenith with infringement }
upon Lilly's two patents and with unfair competition, Bo
* Judges Wisdom, Weinfeld and Robson took no part in ES Ce
the consideration of this matter.
| E

Case MDL No. 326 Document 2 | Filed 05/04/15 Page 8 of 12
basically because Zenith uses a color scheme on its antibiotic
D capsule similar to that employed by Lilly on its comparable
product.
The New York and Florida actions are each brought by
Lilly against a different Zenith customer that resells Zenith's
antibiotic to the pharmaceutical trade. Lilly charges the.
defendants in the New York and Florida actions with the
| same type of patent infringement and unfair competition |raised in Lilly's counterclaim in the New Jersey action. |
| Zenith moves the Panel for an order pursuant to 28 |
U.S.C. §1407 transferring the New York and Florida actions |
~ to the District of New Jersey for coordinated or consolidated :
C pretrial proceedings with the action pending there. Defend- | |
ants in the Florida and New York actions have joined in |
Zenith's motion. Lilly has responded that it does not believe
the issues involved in the three actions are sufficiently |
complex to warrant transfer, but Lilly nevertheless states |
~ that it has no objection to transfer should the Panel conclude i
| i |
that transfer under Section 1407 is appropriate. :
We conclude that transfer under Section 1407 would not
necessarily serve the convenience of the parties and witnesses [4
or promote the just and efficient conduct of this litigation
and, accordingly, we deny the motion to transfer.
@ 1/ All parties waived oral argument and, therefore, this
matter was submitted for decision on the basis of the papers
filed. See Rule 14, R.P.J.P.M.L., 65 F.R.D. 253, 264 (1975).

| Case MDL No. 326 Document2 Eiled 05/04/15 Page 9 of 12
A ] Zenith argues that all three actions involve the ques-
» tions whether Lilly's two patents are valid and enforceable
and whether Zenith's antibiotic infringes upon those patents.
Section 1407 transfer, Zenith argues, would thus prevent
duplicative discovery. Additionally, Zenith notes that Lilly
has already moved for preliminary injunctive relief in the :
New Jersey action, and Zenith suggests that Lilly may seek
similar relief in the New York and Florida actions. Accord- |
ingly, Zenith argues, transfer would allow all such motions |to be considered by a single judge and would eliminate the |
possibility of inconsistent pretrial rulings. |
Te find these arguments vnpersuasive. Only three
[J actions are involved here. Although we recognize the exis-
tence of common questions of fact among these few actions,
movants have not met their burden of convincing us that those
common factual questions are sufficiently complex or that the
accompanying discovery will be so time consuming as to justify
transfer under Section 1407. See In re Scotch Whiskey, 299
F. Supp. 543, 544 (J.P.M.L. 1969). Furthermore, we note that 4: k
under the collateral estoppel principles of Blonder-Tongue
Laboratories, Inc. v. University of Illinois Foundation, 402
E
U.S. 313 (1971), a holding in one action that the two Lilly [
patents are invalid would likely prove dispositive of that
@

Case MDL No. 326 Docume 2 Filed 05/04/15 Page 10 of 12 |
issue in the other two actions. See also In re Illinois Tool,
» Inc. v. Foster Grant Co., Inc., 547 F.2d 1300, 1302-03 (7th
Cir. 1976). |
We observe that suitable alternatives to Section 1407
transfer are available in order to minimize the possibility of
duplicative discovery. For example, notices for a particular :
deposition could be filed in all actions, thereby making the
deposition applicable in each action; the parties could seek
to agree upon a stipulation that any discovery relevant to
more than one action may be used in all those actions; and
any party could seek orders from the three courts directing |
the parties to coordinate their pretrial efforts. See	In re
® Commercial Lighting Products, Inc. Contract Litigation, 415
F. Supp. 392, 393 (J.P.M.L. 1976). See also Manual for Complex
Litigation, Parts I and II, §§3.11 (rev. ed. 1977). Moreover,
the parties may seek stays of two of the actions pending the
outcome of the third. |
Additionally, consultation and cooperation among the
three concerned district courts, if deemed appropriate by
those courts, coupled with the cooperation of the parties,
would be sufficient to minimize the possibility of conflicting
pretrial rulings. See In re Texas Instruments, Inc, Employ-—
ment Practices Litigation, ___ F. Supp. ___, ____ (J.P.M.L., |
9 filed December 5, 1977) (slip opinion at 4-5).

Case MDL No. 326 Document 2 Filed 05/04/15 Page 11 of 12
se IT IS THEREFORE ORDERED that the motion to transfer |
[J the actions listed on the following Schedule A be, and the i.
same hereby is, DENIED. :

Case MDL No. 326 Document 2 Filed 05/04/15 Page 12 of 12
® '' " MDL-326 -- IN RE ELI LILLY AND CO. (CEPHALEXIN MONOHYDRATE)
D PATENT LITIGATION
SCHEDULE	A
DISTRICT OF NEW JERSEY :
Zenith Laboratories, Inc. v. Eli Lilly Civil Action
and Co. No. 77-1804
SOUTHERN DISTRICT OF NEW YORK |
Eli Lilly and Co. v. H. L. Moore Drug Civil Action
Exchange, a Division of/and Levitt No. 77-Civ-5005
Industries, Inc. :
SOUTHERN DISTRICT OF FLORIDA |
Eli Lilly and Co. v. Generix Drug Civil Action
Corp. : No. 77-4749-Civ-NCR