Merck Sharp & Dohme Ltd v Ono Pharmaceutical Co Ltd & Ors

In deciding patent litigation costs, the court must identify the overall winner by examining the substance and reality of the dispute. Different outcomes concerning separate patents do not necessarily mean that there is no overall winner. Where one party has won the litigation overall, general costs should ordinarily follow that result unless a distinct issue can fairly be dealt with separately. Approximate apportionment may be appropriate where it produces fair rough justice, but it should not be ordered where the costs are insufficiently circumscribable or where it risks undermining an existing costs order.

The judgment concerned the costs of patent litigation involving two patents. The court had previously held that one patent was valid and infringed. The other patent had been amended, and the parties had entered into a consent order requiring payment of costs relating to that patent. The remaining dispute concerned general costs incurred before the relevant date which could not readily be attributed to either patent.

Merck relied on the apportionment approach adopted in Vringo v ZTE [2014] EWHC 4475 (Pat). BMS and Ono argued that BMS was the overall winner and should recover the general costs. The central issue was whether the court should apportion those costs or make them payable by Merck.

1. Overall winner. The court began with the general costs principles in CPR rule 44. The relevant question was who had won the litigation as a whole, assessed by substance and reality. Applying the approach stated in Roache v News Group Newspapers, the court concluded that BMS and Ono were the overall winners.
2. The fact that the parties had obtained different outcomes concerning separate patents did not require the court to conclude that there was no overall winner. The present case therefore differed from Vringo v ZTE [2014] EWHC 4475 (Pat), where the court had considered apportionment appropriate because no overall commercial winner could be identified.
3. Although an apportionment and reduction relating to the amended patent would have been appropriate if all matters had remained open, the existing consent order had already dealt with those patent-specific costs. The court declined to apportion general costs because they were not sufficiently circumscribable to be dealt with fairly.
4. The concept of general costs could include costs that were impossible, or merely disproportionate, to attribute. Further apportionment risked attributing to the amended patent costs already covered by the consent order. Costs incurred before 17 February 2015 which were not attributed to that patent were therefore payable by Merck. Merck could recover costs fairly attributed to that patent in accordance with the consent order.