Les Laboratoires Servier & Anor v Apotex Inc & Ors

Compensation under a cross-undertaking given for interim relief is assessed according to the undertaking’s terms and is compensatory, not punitive. Where an injunction prevents entry into a new market, the loss of a real and substantial commercial opportunity may be assessed despite uncertainty. The court should first decide whether the opportunity was real rather than fanciful, then evaluate its value by estimating the relevant hypothetical outcomes and discounting them according to their probabilities.

The assessment should be principled and sufficiently liberal to reflect the inherent uncertainty. A party that obtained interim relief by emphasising the relative ease of calculating the opponent’s loss cannot later rely on complexity to demand excessive caution. Late amendments which introduce a new case after evidence and submissions may be refused where they prejudice the fair and efficient administration of justice.

Servier obtained an interim injunction restraining Apotex from selling generic perindopril pending trial of Servier’s patent claim. The injunction was continued until the patent was held invalid by Pumfrey J and the Court of Appeal dismissed Servier’s appeal in [2008] EWCA Civ 445.

Apotex then sought compensation under Servier’s cross-undertaking in damages for the period during which it had been excluded from the market. The principal issue was the quantification of loss, including whether Apotex had lost a real opportunity to establish itself in an “at risk” market and how the competing hypothetical market scenarios should be valued. Servier also sought, very late in the enquiry, to amend its case based on a Canadian patent judgment.

1. The cross-undertaking was enforced according to its terms. The relevant question was what loss the making and continuation of the injunction caused Apotex. The jurisdiction was compensatory rather than punitive.

2. The assessment was generally conducted on the contractual basis identified in Hoffmann-La Roche v Secretary of State for Trade [1975] AC 295, although the judge noted obiter that the compensation was equitable and that rigid adherence to contractual rules might not always be appropriate. The possibility of restitutionary relief was left open.

3. Apotex’s claim was treated as a lost-opportunity claim. Applying Chaplin v Hicks [1911] 2 KB 786 and Allied Maples v Simmons & Simmons [1995] 1 WLR 1602, Apotex first had to establish on the balance of probabilities that its chance of profit was real and not fanciful. Once that threshold was crossed, the court had to evaluate the substantial chance. The court could assess different hypothetical scenarios and apply different percentage discounts.

4. Apotex would certainly have continued trading profitably. The chance of a competing entrant, TG1, was too speculative to be included. The judge assessed two remaining scenarios: a Servier–Apotex duopoly, assessed as 67% probable, and a controlled generic market involving authorised generics, assessed as 33% probable. The resulting compensation was rounded down to £17.5 million to reflect the uncertainty inherent in the assessment.

5. The judge adopted a liberal but principled approach to the evidence. Servier’s interim-relief case had emphasised the relative ease of calculating Apotex’s loss, and it could not later rely on alleged complexity to insist upon an excessively cautious assessment. The approach was supported by General Tyre & Rubber Co Ltd v Firestone Tyre & Rubber Co Ltd [1976] RPC 197.

6. Servier’s proposed amendment based on a Canadian patent judgment was refused. Applying the principles in Cobbold v L B of Greenwich and Ketteman v Hansel Properties [1987] 1 AC 189, the amendment came after the evidence and closing submissions, introduced a new case, risked rendering the enquiry otiose, and harmed the proper administration of justice.

• High Court (Chancery Division): Pumfrey J held the 947 patent invalid and discharged the injunction.
• Court of Appeal: refused to continue the injunction and dismissed Servier’s appeal in [2008] EWCA Civ 445.
• High Court (Chancery Division): Norris J assessed compensation under the cross-undertaking and awarded Apotex £17.5 million.