Settlement agreement between a co-defendant and plaintiff in a Hatch-Waxman patent litigation matter is discoverable, ruled Judge Bryson in Allergan, Inc. v. Teva Pharmaceuticals, Inc. et al., Case No. 15-1455 (E.D. Tex., Jan. 12, 2017) (Bryson, J.).
Plaintiff Allergan sued three generic drug manufacturers Apotex, Mylan and Teva. Apotex settled and Mylan sought a copy of the settlement agreement between Allergan and Apotex. Allergan ultimately agreed to produce the settlement agreement but with the caveat that Mylan’s outside counsel with access to the settlement agreement should not be involved in any settlement negotiations with Allergan. Mylan did not agree.
The court first evaluated whether the agreement was relevant. It acknowledged that settlement agreements are often regarded as relevant for damages, which is typically not an issue in Hatch-Waxman cases, but nonetheless found it minimally relevant to commercial success, one of the secondary considerations of non-obviousness. Allergan argued that the agreement was not relevant because it did not intend to rely on the agreement to show commercial success. The court rejected Allergan’s argument noting that Allergan did not say that it would not argue commercial success, but only that it did not intend to rely on the settlement agreement.
Having found the settlement agreement relevant, the court also rejected Allergan’s requested restrictions on access to the agreement, explaining that Allergan had not demonstrated the exceptional need for such a restriction. The court concluded that no further bar to discovery existed: “federal settlement privilege” did not apply to the case at bar; policy considerations, such as reluctance of parties to settle if the agreement were discoverable, were not sufficiently persuasive; and confidentiality clause in the agreement imposed no limit to discovery if the court were to order its production. Finding no reason to foreclose relevant discovery, the court ordered Allergan to produce the settlement agreement without the additional restrictions requested by Allergan.
