England and Wales High Court (Patents Court) Decisions

IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
PATENTS COURT

		Royal Courts of Justice Strand. London. WC2A 2LL
		27/02/2009

HIS HONOUR JUDGE FYSH QC :

Standard Costs

1. Let me first deal with the question of costs at its broadest. I have received this morning submissions on quite a complex costs situation following my substantive judgment in this double revocation action. I have had the benefit of both authority and argument on the matter. The costs on each side are just short of £1 million and therefore this is not a case where there is a great disparity between the levels of the parties' costs.
2. I have of course been taken to CPR part 44 and in particular, to part 44.3. I have also been taken to a number of authorities on the question of the assessment of costs in patent infringement actions. In such cases, costs are seldom an easy matter. I have also borne in mind what Jacob LJ said in SmithKline Beecham plc v Apotex Europe Ltd (No. 2) [2005] FSR 24. He said that the estimation of costs, like that of valuation of property, is more of an art than a science in such cases. If I may respectfully say so, I would thoroughly endorse that observation.
3. We have had the usual analysis (performed by Mr. A. Wilson, who is Boehringer's solicitor) of the time taken with various issues. As Mr. Thorley has rightly said, this was done to give the court 'some feel' for the assessment. Nevertheless, I think most judges, particularly if argument on costs comes reasonably soon after the handing down of judgment, have a pretty good recollection of what transpired and frankly, I do not think that such complex "stop watch" analyses are very useful. Never mind; they have been carried out.
4. We have to consider the cases on these two patents ('270 [Boehringer] and '819 [Almirall]) and in order to understand what I am about to say, one has to go through my judgment which, for those with the stamina to persist, runs to some 93 pages. I should also mention that there has been a good deal said about the commercial importance of these two patents.
5. Mr. Thorley, for Boehringer says first that the most just and fair way of looking at costs is this: that each side should bear its own costs, that is, 'no order as to costs'. Both patents in issue follow an earlier patent belonging to Almirall called 'Forner'^[1] There was a certain amount of discussion, as one would expect, about the possibility of some subsequent 'evergreening' on both sides in the light of Forner.
6. The costs reality is that this action is unusual because the counterclaim is not simply a counterclaim for invalidity. Mr. Thorley says that these are really two separate cases wherein revocation is being sought of the two patents. I found both patents to be invalid, and the first issue which has arisen is: are these patents really of equal 'weight' in the context of this litigation ~ or was one historically and commercially more important than the other? This goes to the question of whether there was an 'overall winner'.
7. For Almirall, Mr. Waugh says that '270 was the commercially important patent. The case on '270 was indeed the first of the issues to come into this action. The case on '819 came a little later - some ten months after the action on '270 was commenced.
8. I have considered this submission and can only express a view of a most general kind. I do not agree with Mr. Thorley that this should be a 50/50 assessment and that each side should therefore bear its own costs. I think this is a matter for costs apportionment. I accept Mr. Waugh's submission that of these two patents, by far the more important, certainly in the context of this litigation, was the Boehringer patent '270. Most, if not all, of the evidence was addressed to it. I quote from (and endorse) Almirall's skeleton of argument paragraph 26(iii):

"The idea that substantial additional costs were incurred in relation to the '819 Patent is ridiculous and is borne out by Boehringer's expert evidence - nothing on the '819 Patent in chief and precious little in reply."

9. That accords perfectly with my present view - and with my memory. On the basis that an apportionment is in order, the parties are some way apart on the question of where the apportionment would be. Mr. Thorley argues for 35/65 and Mr. Waugh urges approximately a 90/10 apportionment in Almirall's favour. There was then a sub-argument about Mr. Waugh's 90/10 apportionment – which recognises the fact that Mr. Waugh lost on '819. If that is the correct approach, said Mr. Thorley, then by the same token, there is the 10% that should be paid to Boehringer; so that there should be an 80% discount altogether.
10. I have come to the conclusion that the latter is the fairest apportionment. It is to be 80/20 to Almirall, therefore.

Indemnity costs?

11. The question of indemnity costs was argued by Mr. Waugh. I have had some well-known authorities cited on the topic and there was in fact no dispute between the parties as to the principles to be applied. The most important indemnity issue was the costs of the experiments. It is recorded in my judgment that the issue of the parties' experiments generally did not create a favourable impression in this case. In particular, I held that Almirall's experiments were unnecessary. The latter related to proving that the R-enantiomer of aclidinium was the active one and the S-enantiomer was substantially inactive.^[2] I have also explained in my judgment what I understood by the term "substantially inactive". Basically, in practical terms, one enantiomer is clinically much more active than the other and that was known some time ago.
12. I record at paragraph 203:

"I consider therefore therefore that Mr. Waugh was right in submitting that the antecedent admission sought by Almirall could and should have been provided by Boehringer so as to avoid the need for Almirall to conduct any reply experiments."

13. In order to understand the conclusion I have reached on the question of whether there should be any indemnity costs, one really has to read the half dozen paragraphs identified in footnote 2. I have come to the conclusion that in relation to Almirall's experiments, costs should be on the indemnity basis. I shall not however attempt to assess what that percentage that should be in relation to costs overall.

Note 1   See para 7 of the main judgment.    [Back]

Note 2   See main judgment paras: 197-209.    [Back]