Merck Sharp & Dohme (UK) Limited v Halozyme, Inc

In his 8^th witness statement in support of the Application, Mr Bennett raised two hypotheses in his evidence at [27]. To identify these I must refer to [26]-[29]. First, he stated in [26]:

‘Halozyme has not explained how it came to represent to MSD (in Quinn Emanuel’s letter of 9 January 2026) that the primary reason for requiring a 28-day extension for service of its Notice of Experiments was difficulties in producing “comparator PH20 polypeptides” which can take “many months”…’

He continued as follows (my emphasis):

‘27. On the basis of that representation by Halozyme, it is reasonable to infer that Halozyme intended to use one or more comparator polypeptides in its experiments (other than the one described in its Notice of Experiments), was struggling to make or have those made and ended up using the Creative Biomart product instead. Alternatively based on the representation Halozyme made to procure the extension of time, another explanation is that Halozyme did manage to obtain comparator PH20 polypeptides other than the Creative Biomart product, used those polypeptides in experiments but decided it preferred the results from experiments conducted with the Creative Biomart PH20 polypeptide

28.

Given that Halozyme had previously pleaded that the comparator enzyme should be a PH20 having the amino acid sequence of SEQ ID NO: 35 of EP 347 and EP 622, the delay may have resulted from efforts to run the experiments with a PH20 having SEQ ID NO: 35 but that this ran into problems. But in any event Halozyme has not explained itself nor has it provided disclosure or made out a valid claim to privilege for that material.

29.

According to the information provided by Halozyme, the material purchased from Creative Biomart is a formulation containing a PH20 enzyme having the amino acid sequence of SEQ ID NO: 3 of EP 347 (and EP 622). As noted at paragraph 10 above, Halozyme manufactures and sells a commercial product (Hylenex) that, according to its published description contains, along with a number of excipients, a PH20 enzyme having the sequence of amino acids of SEQ ID NO: 3. The Hylenex product is the comparator enzyme-containing formulation that Halozyme asserts it used for the experiments it relies upon in Germany and the Netherlands. No explanation has been offered by Halozyme as to why it didn’t simply use its own Hylenex PH20 enzyme in its UK experiments, as it did in Germany, rather than delay matters with repeated extension requests while it attempted to rely on other polypeptides.’

Mr Bennett then invited the following conclusions at [33] (emphasis added):

‘Halozyme’s Disclosure Statement and the accompanying work-up disclosure contain no explanation or documents concerning what had happened with Halozyme’s production of the comparator PH20 polypeptides for its experiments. Given Halozyme’s representation about the difficulties it had in making comparator polypeptides and its use in its Notice of Experiments of an off-the-shelf product made in 2025, it is beyond doubt that: Halozyme attempted to make PH20 comparators for the UK experiments; that those were intended to be relevant comparator enzymes; and were different to the comparator enzyme that it relies upon in its Notice of Experiments. Appendix B to the Disclosure Statement sets out the documents withheld. Halozyme expressly states in Appendix B that it has withheld documents relating to experiments in the ongoing German and Dutch proceedings between the parties and documents relating to the production or contemplated production of reagents for use in experiments to be undertaken in contemplation of litigation (but where experiments utilising those reagents were not ultimately conducted). Appendix B is silent as to documents relating to:

(a)

Halozyme’s production or procurement of PH20 polypeptide comparators (from sources other than that disclosed in the Product Report);

(b)

any testing conducted by Halozyme (or on its behalf) to validate data given by Creative Biomart with respect to the SEQ ID NO: 3 comparator PH20 polypeptide disclosed in the Product Report; and

(c)

any testing conducted by Halozyme (or on its behalf) intended to evidence infringement of EP 622 (the parent patent of EP 347).”

I should also quote Mr Bennett’s [30] which makes clear MSD’s position as to the relevant ‘issue’ or ‘transaction’:

‘30. The importance of the identity of the comparator sequence and difficulties in making comparator polypeptides are matters in dispute on the pleadings in this case. It is relevant to pleaded issues of validity and infringement.’

So, to be clear:

Mr Crosse addressed this second hypothesis directly in his first witness statement at [30]. Having set out the second hypothesis, Mr Crosse said this:

‘Without waiving privilege, I can say that that is not the case. Halozyme has not conducted any experiments comparing the MSD ALT-B4 Sample Enzyme with any comparator enzyme other than the Creative Biomart product described in the Notice of Experiments.’

In their Skeleton MSD suggested this sentence raised a caveat – they submitted that what Mr Crosse said ‘does not rule out the possibility that they did compare (say) SEQ ID NO: 35 to SEQ ID NO:3 to work out which they preferred as a comparator.’

In response, Halozyme served Crosse 2 in which Mr Crosse:

That disposed of the second hypothesis, leaving the first hypothesis, which Mr Bennett pointed out was not addressed in Mr Crosse’s evidence, other than indirectly in this paragraph:

“31.

Halozyme’s position is that service of the Notice of Experiments containing an experiment in which the activity of the MSD ALT-B4 Sample Enzyme is compared to that of the Creative Biomart product does not waive privilege in any documents relating to the production (or attempted production) or testing (as to which see above) of any other comparator PH20 polypeptide(s) (Bennett 8 paragraph 3(a)(i)-(iii)), for the reasons given by Mr Bennett or otherwise. That will be the subject of legal submissions.”

Furthermore, MSD stressed the underlined passage in Mr Bennett’s [33], set out above, contending that nowhere did Mr Crosse address it.

For their part, Halozyme characterised the issue thus:

‘47. MSD is therefore seeking disclosure in relation to the production and testing of comparator polypeptides in circumstances where:

(i)

The Notice of Experiments uses a SEQ ID NO: 3 enzyme, which was obtained off-the-shelf from Creative Biomart.

(ii)

No other comparator polypeptide is relied upon by Halozyme.

(iii)

No other comparator polypeptide has been compared with the MSD ALT-B4 Sample Enzyme.’

On that basis, Halozyme submitted a basic point arose:

‘that the experiments relied upon have nothing to do with any comparator with a sequence other than SEQ ID NO: 3, and no other comparator has been tested. Any work relating to preparation of an enzyme with a sequence other than SEQ ID NO: 3 cannot be regarded as work-up to the experiment in the Notice, nor is otherwise engaged by the principles in Mayne Pharma.’

Mr Bennett adopted essentially the same arguments when he addressed MSD’s RFI. It suffices to quote his [43]:

‘As explained in paragraphs 28-30 above, the issue of difficulty in making comparator polypeptides and the consequences from validity and infringement of testing that makes a comparison to other comparator sequences is a pleaded issue in dispute between the parties. In relation to the difficulty in making the enzymes there is clearly a story to be told by the withheld disclosure, in circumstances where the basis for Halozyme obtaining its 35-day extension for service of its Notice of Experiments was explicitly due to difficulties producing comparator PH20 polypeptides (plural) in time for the purposes of its experiments. How those enzymes were produced and difficulties in producing them are part of the work up for the experiments relied upon. Any testing of activity of comparator enzymes other than the Creative Biomart PH20 relied upon in the Notice of Experiments is also part of the work up in the sense that the testing will have included testing of activity of the comparator enzymes. Producing only the results for the comparator that suits its case is a partial production of the material generated by that transaction: it’s liable to present only part of the suite of relevant results and is an exercise in cherry-picking by Halozyme. MSD’s position is that privilege has been waived in the whole transaction which includes the matters raised by MSD’s RFI and the disclosure now sought.’

Finally, I refer to one argument made in MSD’s Skeleton which was to the effect that the teaching in the Patent required that the modified and unmodified polypeptide should be of equivalent length. This, MSD submitted, was the reason why Halozyme, in the original SOCI, intended to test using SEQ ID NO.35, with ‘the same C-terminal extent as BHA’. MSD’s Skeleton continued as follows:

‘31. This was, of course, on the basis that, if unmodified and modified polypeptides of different lengths are compared, there is no way of knowing to what extent any changes in activity or stability are due to the modifications or due to the different lengths. It is basic scientific protocol not to introduce more than one variable when trying to ascertain the effect of changing just one of them. This is, no doubt, the reason why Halozyme intended to use SEQ ID NO: 35, even though in the end they never did as described below.’

Although there was nothing in the evidence to support this point, I assume (in MSD’s favour) that it is correct.

In my view, the dispute came down to a relatively short point. The key difference between the parties concerned the correct characterisation of the ‘issue’ or ‘transaction’ in respect of which privilege was waived by service of the NOE. MSD clearly contended for the widest possible ‘transaction’, essentially including any issue in the action – infringement or validity, so as to encompass their insufficiency plea.

For their part, Halozyme evidently contended the transaction was far narrower, although I consider I should address two possibilities:

On the first possibility, MSD relied on the fact that the plea of infringement includes an allegation of infringement of claim 1 (Particulars of Infringement [2]). On that basis, I understood MSD to invite me effectively to write in the whole text of claim 1 which covers modified polypeptides based on a class of some 37 unmodified polypeptides: SEQ ID NO: 3, 7 or 32-66. The contention appeared to be that the issue or transaction extended to any testing involving any of those sequences.

I regard that as a rather artificial argument in circumstances where it is clear that Halozyme only seek to prove infringement via the experiment in which the sequence used is SEQ ID NO: 3. After all, if Halozyme prove infringement via the experiment featuring SEQ ID NO:3, a finding of infringement would not be displaced by some other experiment involving SEQ ID NO:35 which, let me assume, failed to establish the increased activity required by claim 1.

In my view, the relevant ‘issue’ or ‘transaction’ in this case is confined by the NOE. In the normal way, the waiver extends to any work-up experiments for the experiment relied upon in the NOE, but, as I understand matters, Halozyme has already disclosed those.

A conclusion that the ‘issue’ or ‘transaction’ extends to the whole action, both infringement and validity, would be, in my view, far too wide and would be plainly contrary to the principles explained in Magnesium Elektron, particularly at [109].

Furthermore, as Halozyme submitted, the fact that there are pleaded issues in dispute (i.e. insufficiency) between the parties does not make privileged material disclosable. The only question is whether the NOE consequentially waived privilege in documents relating to the production of PH20 polypeptides with different sequences. I concluded not.

In this regard, it is relevant to note that in their arguments, MSD were selective as to the information and therefore the inferences they invited from Halozyme’s requests for more time to serve their NOE. This is the reason why I set out the relevant reasons which were put forward by Halozyme’s solicitors for the extensions of time requested. To a significant extent, MSD ignored those reasons and simply invited the inference that Halozyme had failed to make a SEQ ID NO.35 comparator because the task was too difficult i.e. an undue burden.

However, in their correspondence (as indicated above), Halozyme’s solicitors cited a specific problem with one reagent. In my view, it does not follow that a problem with a reagent establishes undue burden. It may simply be the case that there was a problem with a reagent. In any event, as I indicated during the hearing, MSD bear the onus of proving their insufficiency pleas and it is open to MSD to conduct experiments which establish undue burden.

Overall, I was satisfied that what Halozyme has released from privilege represents the whole of the material relevant to the issue in question and there is no unfairness here.

On this issue, the submissions made to me appeared to revolve around a satellite dispute which arose following attempts to resolve this issue in correspondence, following service of Crosse 1. The satellite dispute concerned an issue of confidentiality. I must explain how this issue emerged.

Request 2 in the RFI asked Halozyme to explain the basis for the redactions in the documents supplied relating to Experiments A and B (see ‎16.i)b) above). The response explained that the material redacted ‘does not relate to experiments which used comparable experimental protocols to the experiments relied upon and are therefore privileged for the reasons explained in Appendix B to Halozyme’s Disclosure Certificate.’

Mr Bennett’s complaint was phrased as follows:

‘40. This response does not explain the basis for Halozyme’s redactions. Per its Disclosure Statement, Halozyme accepted that these documents constituted work-up – containing “results of experiments undertaken in contemplation of litigation which utilised comparable experimental protocol(s)” to those relied upon the Notice of Experiments – such that privilege has been waived. Indeed, documents 13 and 15 appear to themselves be comparable experimental protocols, yet Halozyme has selectively redacted certain parts of the protocol and results in respect of the same.’

In view of what transpired, it is important to note at the outset what Mr Crosse said in response in his first witness statement on the topic of the redactions relating to Experiments A and B.

First, he referred to that part of the Disclosure Statement served with the NOE which I summarised at ‎16.i)b) above, giving this further explanation:

‘(2) the results of experiments which utilised comparable experimental protocol(s) to the experiment relied upon in the Notice of Experiments, but whose results were not relied upon in the Notice of Experiments ("Category 2 Documents"). The Category 2 Documents consist of redacted protocols and results from experiments (referred to as Experiments A & B) that are different to the experiment which is the subject of the Notice of Experiments, and which were not experiments representing preliminary investigations leading to the experiment that was the subject of the Notice (in which case they would have fallen within Category 1). Once again, they are not documents or experiments that are the subject of the Notice of Experiments and Halozyme has not voluntarily waived privilege in them by its reliance on the Notice. Prior to service of the Notice both the redacted and unredacted parts of these documents were subject to litigation privilege. However, although Experiments A & B are different to the experiment which is described in the Notice, one part of the protocols for each of Experiments A and B uses the same assay and conditions as the experiment which is in the Notice, and conducting Experiment A or B therefore leads to the generation of some data which could be said to represent additional runs of the experiment in the Notice. Halozyme therefore accepted for the purpose of the UK proceedings (and subject to CPR 31.22) that the data in the Category 2 documents generated using the conditions used in the experiment of the Notice, and the parts of the Category 2 documents which set out how those data were generated, should be disclosed in accordance with the "completeness of data" principle in the Mayne Pharma line of cases. However, the redacted parts of the Category 2 documents relate to subject matter which could not possibly be characterised as a repeat run of the experiment in the Notice, and Halozyme therefore maintains that privilege in the redacted parts of these documents remains, and that they do not fall within the scope of the consequential disclosure obligations of Mayne Pharma. Halozyme therefore provided disclosure of the redacted documents to MSD, but resists disclosure of the unredacted versions.’

Later, he addressed Mr Bennett’s complaints in these paragraphs:

‘40. In paragraphs 36-37 of Bennett 8, Mr Bennett refers to the redactions made to the experimental protocol and results for Experiments A and B in the documents disclosed with Halozyme’s Notice of Experiments, and in paragraphs 39-40 he refers to Halozyme’s response to Requests 2 and 3 in the RFI, which relate to those redactions.

41.

As I have explained above, Experiments A and B are not experiments relied on by Halozyme in its Notice of Experiments, nor are they experiments which led to the experiment in the Notice. The unredacted material disclosed in relation to Experiments A & B was disclosed under the "completeness of data" principles in the Mayne Pharma line of cases for the reasons explained in Halozyme’s disclosure statement. However, the redacted material (as Halozyme’s disclosure statement and RFI response make clear) does not relate to experiments which used comparable experimental protocols to the experiments relied on. Only parts of experiments A and B used protocols comparable to that of the experiment relied on in the Notice (and so those parts of the protocols and results were disclosed), whereas other parts did not (and so those protocols and results were not disclosed).’

On receipt of Crosse 1, MSD’s solicitors wrote saying this:

‘Crosse 1 fails to provide a proper explanation as to the basis for the redactions made to documents 13-17 of Halozyme’s work-up disclosure (which we understand to be the “Category 2 Documents” referred to in Crosse 1). The only basis it is reasonable to infer is that the redacted material concerns testing conducted in the presence of a phenolic preservative. Whilst it is MSD’s position that privilege has been waived in these documents and that unredacted copies of the Category 2 Documents ought to have been disclosed, MSD is prepared to refrain from seeking unredacted copies of these documents if Halozyme confirms, by return, that the redactions to the Category 2 Documents do relate to testing conducted in the presence of a phenolic preservative.’

At this point, it should be noted that testing conducted in the presence of a phenolic preservative related to EP 622 and not to EP 347.

Halozyme’s solicitors responded as follows:

‘We note your confirmation that MSD will no longer seek an order for provision of the materials encompassed by paragraphs 1(d), 1(e) and 2 (insofar as it relates to Request 8 and 9 of the RFI) of the draft Order.

With regard to the position set out in your first letter of 18 June that MSD will no longer seek an order for provision of unredacted copies of the Category 2 Documents (i.e. paragraph 3 of the draft Order) if our client were to confirm that the redactions to the Category 2 Documents relate to testing conducted in the presence of a phenolic preservative, we are taking instructions.

However, our client would plainly be unable to provide your client with information characterising the nature of the experiments described in the redacted parts of the Category 2 Documents ("Category 2 Characterising Information") if the act of doing so might itself be said to amount to a broader waiver of privilege. Please therefore confirm the following by return:

1.

That, if our client were to provide your client with any Category 2 Characterising Information, such information would only be disclosed to, and would be kept confidential by, the solicitors and counsel acting for MSD in the above-captioned proceedings, and the specific individuals at MSD responsible for instructing them in those proceedings;

2.

That MSD will not argue, in these proceedings or otherwise, that the provision by Halozyme of any Category 2 Characterising Information amounts to a waiver of privilege in the information provided (with regard to any party other than MSD) or any other information whatsoever (with regard to any party including MSD); and

3.

That any Category 2 Characterising Information provided by Halozyme will be subject to CPR 31.22, and MSD will not make any application under CPR 31.22(1) or oppose any application under CPR 31.22(2) to maintain confidentiality and privilege in such information.’

The correspondence continued, but in essence, MSD indicated they would agree point 3 and, on that basis, disputed the need for the confirmation at point 1. On point 2, MSD agreed that it would not argue for a broader waiver of privilege in other information.

This response was not acceptable to Halozyme. They contended that the confirmations offered by MSD were insufficient to preserve privilege in any Category 2 Characterising Information, on the basis that privileged material had to remain confidential. Furthermore, in view of the proposal only to use any such information solely for the purposes of these proceedings, Halozyme’s solicitors said they could not understand why it was objectionable to agree to point 1.

MSD’s response was simply to say that the assurances they had offered were sufficient.

In his submissions on this aspect, Mr Waugh KC submitted that Halozyme’s position was driven by their position on their appeal against HHJ Hacon’s decision to award indemnity costs against Halozyme on EP 622. Mr Waugh suggested it was reasonable to infer that the redactions relate to testing in phenolic conditions and therefore relate to the EP622 case. So he submitted, it cannot be right for Halozyme to sit on documents which show that HHJ Hacon was entirely right to draw the inference he did, but demand they be kept confidential over and above CPR31.22 when, as he suggested, ‘there was nothing confidential in them other than the fact that they would have scuppered their 622 case’.

I could not see an unsurmountable difficulty and asked Mr Waugh why the appeal could not be conducted on the basis (at least initially) that the documents were confidential – after all the Court of Appeal would be able to take a view as to whether to maintain confidentiality. On this basis, MSD would have the documents and would know whether their inference was correct or not. Mr Waugh nonetheless maintained that maintaining confidence would put MSD in a very difficult position.

In response, Mr Tappin KC pointed out that what MSD was now seeking was not what is sought in their application notice.

Mr Tappin made his submissions on the basis that MSD’s hypothesis was correct, but made it clear he was not saying one way or the other whether it was or not (to avoid any suggestion of further waiver of privilege). On that basis, Mr Tappin first pointed out that MSD did have a request for documents relating to testing in the presence of a phenolic preservative – in 1(e) of their Application Notice, but that was abandoned following service of Crosse 1. He referred me to the passages in Crosse 1 which explained that testing in the presence of a phenolic preservative (relating to stability) was quite different to the testing the subject of the experiment(s) in the NOE (relating to activity).

Halozyme’s Grounds of Appeal against the Order of HHJ Hacon awarding the costs of EP 622 on the indemnity basis were not in the bundles – which Mr Tappin suggested meant this argument was very much an afterthought. Nonetheless, in the course of his submissions, Mr Tappin was able to explain the two aspects of Halozyme’s appeal to me, having laid his hands on those Grounds. Only the second appeared to be the basis of Mr Waugh’s argument and Mr Tappin read it out as follows:

‘The learned judge erred in principle in supporting his decision to award costs on the indemnity basis by the view he formed about [the] English experiments. The learned judge wrongly drew an inference from Halozyme’s maintenance of privilege.’

On that basis, Mr Tappin submitted that cannot possibly amount to a waiver of privilege. In his reply submissions, Mr Waugh appeared to me to have no answer to that.

From Halozyme’s response, it was clear to me that the basis for the redactions was that the material redacted was irrelevant. This point was rather confirmed by the arguments presented by Mr Waugh KC, which revolved around EP 622.

The arguments presented to me revolved around whether the redacted material, if disclosed to MSD, should be kept confidential. There was no evidence, to my mind, to contradict what Mr Crosse had explained.

Accordingly, on the two possible bases put forward:

Having reached those conclusions on the basis of what is in issue in this action, I pause to consider whether Halozyme’s appeal against the award of indemnity costs on EP 622 involves a waiver. In view of what was explained to me about the appeal, there is no substance to this either. Furthermore, revealing the redacted material without confidentiality would or might result in a waiver of privilege.

These reasons explain why I also rejected this aspect of MSD’s application.

The remaining points were agreed and embodied in the Order which the parties managed to agree following the hearing.