Glaxosmithkline UK Ltd v Wyeth Holdings LLC

An account of profits for future patent infringements cannot ordinarily proceed where it has not been pleaded, particularly where the proposed relief would take the defendant by surprise. Such an account is also discretionary and generally requires conduct making it unconscionable for the defendant to retain the profits. Continuing supply which is required in the public interest will not necessarily satisfy that requirement. A patentee may nevertheless elect between damages and an account of profits for past infringements. Different bases of relief may be pursued for past and future infringements.

The claimant sought revocation and a declaration of non-infringement concerning a meningitis B vaccine. The defendant counterclaimed for infringement. Liability had been determined in the defendant’s favour, but the defendant had not sought an injunction because continued vaccine supply served public health interests.

The court considered whether the defendant could pursue an account of profits for future infringements in lieu of an injunction, whether its pleadings covered that relief, whether an account of profits remained available for past infringements, and what forms of future monetary relief could be considered at the later inquiry.

1. Future account of profits. The claim for an account of profits in lieu of an injunction for future infringements was not covered by the pleaded relief. Applying the principles in Kirin-Amgen Inc. v Transkaryotic Therapies Inc. (No. 2) [2002] RPC 3, the proposed relief was inconsistent with the relief specifically claimed, was of a type not pleaded, and would have taken the claimant by surprise. An amendment was required, but no amendment application had been made.

2. Independently, the court would have refused the future account as a matter of discretion. An account of profits is a restitutionary remedy aimed at stripping profits which it would be unconscionable for the infringer to retain. Whether conduct is unconscionable depends on all the circumstances. Here, continued supply of the vaccine was accepted to be necessary in the public interest, so its continuation was not unconscionable.

3. The court declined to decide whether there was jurisdiction in principle to grant an account of profits for future infringements in lieu of an injunction, because that difficult issue was unnecessary to the result.

4. The defendant retained its election between damages and an account of profits for past infringements. The complexity of conducting a damages inquiry for future infringements alongside an account of profits for past infringements did not justify removing that election. The court’s earlier order had already provided for it.

5. The form of any future relief, including a lump sum, periodical payments or a deferred retrospective award, was left to the discretion of the judge conducting the properly pleaded inquiry.

6. The disclosure order had been complied with. Further disclosure applications were discouraged where the material already disclosed was sufficient to enable the election. The defendant paid the claimant’s costs of the disclosure applications; there was no order as to costs on the accounts-of-profits issues.