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Consumer Health Info. Corp. v. Amylin Pharmaceuticals, Inc.

United States District Court, S.D. Indiana, Indianapolis Division

September 18, 2014

CONSUMER HEALTH INFORMATION CORPORATION, Plaintiff,
v.
AMYLIN PHARMACEUTICALS, INC., AMYLIN PHARMACEUTICALS, L.L.C., ELI LILLY & CO., Defendants

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[Copyrighted Material Omitted]

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For CONSUMER HEALTH INFORMATION CORPORATION, Plaintiff: Robert Pitard Wynne, PRO HAC VICE, HARDIN & ASSOCIATES, LLP, Houston, TX; Russell Hardin, Jr., Ryan Kees Higgins, PRO HAC VICE, RUSTY HARDIN & ASSOCIATES, LLP, Houston, TX; James Dimos, FROST BROWN TODD LLC, Indianapolis, IN.

For AMYLIN PHARMACEUTICALS, INC., AMYLIN PHARMACEUTICALS, L.L.C., ELI LILLY & CO., Defendants: Erica C. Lai, Jason C. Raofield, John W. Nields, Jr., PRO HAC VICE, COVINGTON & BURLING, LLP, Washington, DC; Michelle Kaiser Bray, Ryan Michael Hurley, FAEGRE BAKER DANIELS LLP - Indianapolis, Indianapolis, IN.

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ENTRY ON MOTION TO DISMISS

Hon. Tanya Walton Pratt, United States District Judge

This matter is before the Court on a Motion to Dismiss filed by Defendants Amylin Pharmaceuticals, Inc., Amylin Pharmaceuticals, L.L.C., (collectively, " Amylin" ) and Eli Lilly & Co. (" Lilly" ) (collectively, " Defendants" ) (Filing No. 23), as well as a Supplemental Motion to Dismiss filed by the Defendants (Filing No. 45). Plaintiff Consumer Health Information Corporation (" CHIC" ) filed this copyright infringement action under the Copyright Act of 1976, 17 U.S.C. § 101 et seq. (" Copyright Act" ) against Defendants, alleging that Defendants infringed on copyrights on patient education materials developed by CHIC. For the reasons set forth below, Defendants' Motion to Dismiss and the Supplemental Motion to Dismiss are GRANTED.

I. BACKGROUND

The following facts are taken from CHIC's Complaint and are accepted as true for purposes of this motion to dismiss. CHIC is a corporation incorporated under the laws of the District of Columbia with its principal place of business in the State of Virginia. Amylin Pharmaceuticals, Inc. is a corporation incorporated under the laws of the State of Delaware with its principal place of business in the State of California. Amylin Pharmaceuticals, L.L.C. is a limited liability company formed under the laws of the State of California with its principal place of business in the State of California. Lilly is a corporation incorporated under the laws of the State of Indiana with its principal place of business in the State of Indiana. Amylin and Lilly are companies primarily engaged in the research, development, manufacture, marketing, and sale of pharmaceuticals and medical devices. CHIC has expertise in patient engagement and patient adherence strategies, health literacy, and patient education program development for prescription drugs, over-the-counter products and medical devices.

In 2005, Defendants introduced the pharmaceutical drug BYETTA to the marketplace. BYETTA is an injectable prescription medicine used to treat adults with type 2 diabetes mellitus. Defendants worked together to research, develop, manufacture, market and sell BYETTA as part of a mutual alliance referred to as the Amylin-and-Lilly Alliance. After the launch of BYETTA, Defendants experienced unexpectedly poor sales and extremely

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high call center costs. The poor sales were the result of poor patient adherence and compliance. Patients had a difficult time understanding the materials that came with their medication and thus had difficulty administering the drug properly. As a result, many patients stopped taking BYETTA, and subsequently stopped re-filling their prescriptions. In addition, the materials provided to physicians and other healthcare professionals did not adequately train these persons on how to demonstrate the proper use of BYETTA to their patients. As a result, physicians did not prescribe BYETTA as frequently as expected. Both of these factors contributed to poor sales.

In November 2005, Defendants contacted CHIC to develop a strategy to improve sales of BYETTA by improving patients' understanding of how to use the medication. In December 2005, Defendants requested CHIC to develop a patient-compliance strategy that would increase patient adherence. From December 2005 to February 2006, CHIC provided consulting services and proposals for development of a patient compliance strategy. During the course of this work, Defendants requested a high number of revisions to CHIC's proposals for which CHIC was never paid. Defendants reassured CHIC that payment for its prior work would be forthcoming. In February 2006, Defendants decided to change the scope of the work and requested a proposal from CHIC for the development of new patient education materials for BYETTA. In March 2006, CHIC and the Defendants entered into a Master Service Agreement (" the Agreement" ) for the development of patient education materials. CHIC signed the Agreement because Defendants refused payment for past work unless and until the Agreement was executed, and also because CHIC was in poor financial condition and wished to preserve its reputation in the pharmaceutical industry marketplace.

Under the Agreement, CHIC was retained to provide patient education services to Defendants, including the development and revision of BYETTA patient education materials. Section 4(a) of the Agreement purports to designate CHIC's creation of the patient education materials as works made for hire under 17 U.S.C. § 201, and CHIC purported to assign its interest in the copyrighted materials to Amylin. Defendants have been copying and using these materials for the past seven years. CHIC claims that not all of the copyrighted materials at issue were assigned to Amylin under the terms of the Agreement or, alternatively, that CHIC may avoid enforcement of the Agreement assignment provisions under the California economic duress doctrine.

In December 2008, CHIC filed a prior civil action against the Defendants and the action was voluntarily dismissed, without CHIC's consent, on July 20, 2009. (Filing No. 38-1). ...


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