Eli Lilly & Co. v. Actavis Elizabeth LLC

ELI LILLY AND COMPANY, Plaintiff,

v. ACTAVIS ELIZABETH LLC, GLENMARK PHARMACEUTICALS INC. USA,SUN PHARMACEUTICAL INDUSTRIES LIMITED, SANDOZ INC.,MYLAN PHARMACEUTICALS INC., APOTEX INC., AUROBINDO PHARMA LTD.,TEVA PHARMACEUTICALS USA, INC., SYNTHON LABORATORIES, INC.,ZYDUS PHARMACEUTICALS, USA, INC., Defendants.

CIVIL ACTION NO. 07-3770 (DMC)

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW JERSEY

January 22, 2013

CLERK'S OPINION GRANTING

IN PART AND DENYING IN PART

PLAINTIFF'S MOTION

TO TAX COSTS

This matter comes before the Clerk on the motion of Plaintiff Eli Lilly and Company ("Plaintiff," "Lilly," "the movant") for the taxation of costs pursuant to Federal Rule of Civil Procedure 54(d) and Local Civil Rule 54.1. Defendants Sun Pharmaceutical Industries Ltd. ("Sun"), Sandoz Inc. ("Sandoz"), Mylan Pharmaceuticals Inc. ("Mylan"), Apotex Inc.("Apotex") and Aurobindo Pharma Ltd. ("Aurobindo") (hereinafter, collectively, "Defendants") oppose this motion.

This is a patent infringement case involving a drug marketed by Lilly as Strattera. On August 19, 1997, Lilly was assigned U.S. Patent No. 5,658,590 ("the '590 patent"), a method-of-use patent covering methods of treating attention deficit/hyperactivity disorder ("ADHD") with tomoxetine (also referred to as atomoxetine). In its First Amended Complaint, filed on September 5, 2007 [Dkt. Entry 3], Lilly alleged that each of the above-captioned defendants violated Lilly's '590 patent by filing an Abbreviated New Drug Applicationfor approval by the United States Food and Drug Administration of its generic version of Strattera. In their answers and counterclaims, the various defendants sought declarations that Lilly's patent was invalid, unenforceable and/or not infringed.

On December 12, 2007, Lilly entered into a Consent Judgment and Order resolving its claims against Zydus Pharmaceuticals, USA, Inc. and providing that each party would bear its own costs [Dkt. Entry 105]. Lilly entered into a similar Consent Judgment and Order with Glenmark Pharmaceuticals Inc. USA on July 1, 2008 [Dkt. Entry 174]. On August 20, 2008, by Stipulation and Order of Dismissal, Lilly's claims against Synthon Laboratories, Inc. ("Synthon") were dismissed without prejudice as were Synthon's defenses and counterclaims [Dkt. Entry 215]. The Order again provided that each party was to bear its own costs.

On October 22, 2008, Sun filed a motion for partial summary judgment as to no direct infringement [Dkt. Entry 254] and the other Defendants herein, i.e., Sandoz, Mylan, Apotex, and Aurobindo, joined in, as did defendants Actavis Elizabeth LLC ("Actavis") and Teva Pharmaceuticals USA, Inc. ("Teva"). That motion was granted by this Court's Order of May 21, 2009 [Dkt. Entry 332].

On May 13, 2009, Sandoz, Mylan, Apotex, Aurobindo, and Sun, i.e., Defendants here, as well as defendants Actavis and Teva, filed a joint motion for summary judgment of invalidity [Dkt. Entry 294].¹

On the same date, Lilly filed motions for summary judgment of no inequitable conduct [Dkt. Entry 292], of no anticipation [Dkt. Entry 298], and of infringement [Dkt. Entry 299].

During the period of May through July 2009, Aurobindo, Sun, Mylan, Teva, Apotex, Sandoz and Actavis filed separate motions for summary judgment of no infringement. [Dkt. Entries 283, 304, 308, 380, 394, 412, 436, respectively].

By Order of December 29, 2009 [Dkt. Entry 491], the Court ruled on the various motions for summary judgment as follows: the defendants' motion for summary judgment of invalidity based upon lack of enablement/utility and obviousness was denied as was their motion for summary judgment of no infringement. Lilly's motion for summary judgment of no inequitable conduct before the Patent and Trademark Office was granted in part and denied in part. Lilly's motion for summary judgment of no anticipation was granted as was its motion for summary judgment as to induced infringement.

On January 19, 2010, the Court also granted the defendants' motion for summary judgment of no contributory infringement. [Dkt. Entry 506].

On February 8, 2010, the Court denied Apotex's motion to reconsider the Court's Order granting summary judgment of induced infringement. [Dkt. Entry 537]. Also denied, on February 23, 2010, was Lilly's motion to reconsider findings in the Court's Amended Opinion, addressing the defendants' motion for summary judgment of non-enablement. [Dkt. Entry 540].

On April 8, 2010, Lilly and Teva entered into a Joint Stipulation staying all of Lilly's claims against Teva and all of Teva's defenses until a final court decision from which no appeal could be taken. [Dkt. Entry 557]. The parties waived any and all claims against the other for costs.

On April 19, 2010, Lilly entered a virtually identical Joint Stipulation, staying the action with Actavis, and waiving the parties' claims for costs against the other. [Dkt. Entry 567].

After a six-day bench trial, held on May 18, 19, 24-27, 2010, the Court concluded that these Defendants, Actavis and Teva failed to prove that the '590 patent was invalid as obvious or not enabled to the full scope of its claims or that the patent should be held unenforceable as a result of inequitable conduct. However, the Court determined that the '590 patent was invalid for lack of enablement/utility under 35 U.S.C. § 112. [Dkt. Entry 657]. Final Judgment was entered in favor of Defendants on August 24, 2010. [Dkt. Entry 686].

Lilly filed its notice of appeal to the United States Court of Appeals for the Federal Circuit on August 25, 2010 [Dkt. Entry 687], and Defendants herein cross-appealed. [Dkt. Entries 689-94]. On August 31, 2010, the Federal Circuit granted Plaintiff's request for an injunction pending the appeal. On October 25, 2011, the Federal Circuit issued its mandate, reversing in part, affirming in part and remanding to this Court. [Dkt. Entry 743]. The Circuit Court reversed this Court's judgment that the '590 patent claims were invalid and its finding of no contributory infringement by the defendants. It affirmed this Court's finding of validity on other grounds and induced infringement by the defendants. Id.

On December 6, 2011, Final Judgment was entered by this Court in favor of Lilly and against these Defendants, Actavis and Teva, and it provides for the defendants' payment of costs to Lilly. [Dkt. Entry 748].

Plaintiff filed the instant motion on January 5, 2012 [Dkt. Entry 749], seeking the taxation of costs as a "prevailing party" within the meaning of Fed. R. Civ. P. 54(d).² Specifically, Lilly requests the taxation of the fees of: the Clerk ($1,100.00)³ ; hearing and deposition transcripts ($57,614.64)⁴ ; witnesses ($1,150.00); and exemplification and copies ($275,103.40), or a total of $334,968.04. Defendants object to taxation of all categories of costs.

I. Standards for Awarding Costs

Under Federal Rule of Civil Procedure 54(d) (1), a prevailing party is entitled to costs unless the Court otherwise directs. A prevailing party is "one in whose favor a judgment is rendered, regardless of whether the party has recovered its entire claim or a portion thereof." Garonzik v. Whitman Diner, 910 F. Supp. 167, 168 (D.N.J. 1995) (citing Fahey v. Carty, 102 F.R.D. 751 (D.N.J. 1983)). That term has been even more broadly defined as a party who "succeeds on 'any significant issue in litigation which achieved some of the benefit sought in bringing suit.'" Reichhold, Inc. v. U.S. Metals Ref. Co., Civ. A. No. 03-453, 2009 WL 3761828, at *1 (D.N.J. Nov. 6, 2009) (quoting Hensley v. Eckerhart, 461 U.S. 424, 433 (1983)).

Indeed, there is such a strong presumption that costs should be awarded to the prevailing party that, " '[o]nly if the losing party can introduce evidence, and the district court can articulate reasons within the bounds of its equitable power, should costs be reduced or denied to the prevailing party.' " Reger v. Nemours Found., Inc., 599 F.3d 285, 288 (3d Cir. 2010) (quoting In re Paoli RR Yard PCB Litig., 221 F.3d 449, 468 (3d Cir. 2000)). The rationale behind thispresumption is that the denial of costs is tantamount to a penalty. Id. at 288-289 (citing ADM Corp. v. Speedmaster Packaging Corp., 525 F.2d 662, 665 (3d Cir 1975)).

Despite this strong presumption, courts do not have unfettered discretion to grant costs under Rule 54(d) but rather, are bound by statute. The United States Supreme Court has ruled that absent express statutory authorization, courts may reimburse only those costs which are enumerated in 28 U.S.C. § 1920. Crawford Fitting Co. v. J.T. Gibbons, Inc., 482 U.S. 437, 441 (1987). Title 28 U.S.C. § 1920 provides for the taxation of the following costs:

(1) Fees of the clerk and marshal;

(2) Fees for printed or electronically recorded transcripts necessarily obtained for use in the case;

(3) Fees and disbursements for printing and witnesses;

(4) Fees for exemplification and the costs of making copies of any materials where the copies are necessarily obtained for use in the case;

(5) Docket fees under section 1923 of this title;

(6) Compensation of court appointed experts, compensation of interpreters, and salaries, fees, expenses, and costs of special interpretation services under section 1828 of this title.

The Supreme Court recently reinforced its Crawford Fitting holding in Taniguchi v. Kan Pacific Saipan, Ltd., 132 S.Ct. 1997 (2012). In Taniguchi, the Court limited the provision in §1920 (6) for the "compensation of interpreters" to the cost of oral translation, and denied the cost of document translation, stating that its decision was "in keeping with the narrow scope of taxable costs." Id. at 2006.

In addition to Rule 54(d) and 28 U.S.C. § 1920, the Clerk's decision is guided by Local Civil Rule 54.1, which "establishes the general procedures to be followed in those cases where a party is entitled to recover costs" under § 1920. Lite, N.J. Federal Practice Rules, Comment 2 to Rule 54.1 (Gann 2013 ed.) at 234.

Therefore, while a prevailing party is entitled to...