Abbott Laboratories Ltd v Evysio Medical Devices ULC (Sued As Divysio Solutions ULC In HC 06 C 02440)

Costs in patent proceedings should generally be approached by applying the discretion under Civil Procedure Rules 1998, rule 44.3, to all the circumstances. An issue-based order is appropriate where issues can be suitably circumscribed, but unsuccessful arguments that are closely tied to the issues won, or to the general costs of the action, do not automatically justify further deductions. Where one party has clearly won overall, the court may make a proportionate deduction for abandoned or effectively abandoned issues and for evidence that made little material contribution. The court may use its own judgment to reach a just and proportionate figure and avoid assessment of both parties’ costs where that is practicable.

The judgment concerned the costs of patent proceedings in which Abbott had succeeded overall. Two of Evysio’s three patents were held invalid, while the third was held valid but not infringed. Abbott also succeeded on a squeeze argument concerning the third patent.

Abbott sought the majority of its costs. Evysio accepted that Abbott should recover a proportion but argued for substantial deductions, relying on abandoned prior-art issues, unsuccessful expert evidence, failed validity arguments and unsuccessful construction arguments. The central questions were how the costs discretion should be exercised, whether an issue-based order was appropriate, and what proportion of Abbott’s costs should be recoverable.

1. The court exercised its discretion under Civil Procedure Rules 1998, rule 44.3. The general rule that the unsuccessful party pays the successful party’s costs is subject to all the circumstances, including partial success, conduct, the reasonableness of pursuing issues and the manner in which they were pursued.

2. The issue-based approach recognised in Smithkline Beecham v Apotex [2004] EWCA Civ 1703 and confirmed in subsequent Patents Court decisions should be applied so far as reasonably practicable. The prior-art issues concerning Prograft and Fischell were sufficiently circumscribed for separate treatment.

3. Abbott accepted responsibility for the Prograft costs. It had effectively abandoned the Fischell case after evidence had been prepared and therefore should pay Evysio’s costs of that issue. A deduction of 17.5 per cent of Abbott’s costs was made for those two issues together.

4. A further deduction of 7.5 per cent was appropriate for Dr Segal’s evidence. The evidence had been substantially criticised and had made little contribution to the judgment. No further deductions were made for unsuccessful collocation, priority, added-matter or construction arguments. Those matters were closely connected with issues on which Abbott succeeded or with the general costs of determining the patent claims.

5. The substantial disparity between the parties’ costs did not justify separate assessment of both parties’ costs. Unlike RIM v Visto [2008] EWHC 819 (Pat), the circumstances did not require that course. The court could reach a just and proportionate figure by exercising its own judgment.

6. Abbott was the clear overall winner. It was awarded 75 per cent of its overall costs, subject to assessment in the light of the observations in the judgment.

First-instance costs judgment following the court’s substantive judgment in the patent proceedings. The substantive judgment is not separately cited in the supplied text.