Edwards Lifesciences LLC v Boston Scientific SCIMED, Inc & Ors

A court has no statutory or common-law bar to ordering a joint inquiry as to damages and account of profits. Whether to do so is a matter of case management. The usual risks of electing an account of profits do not justify allowing a claimant to run both remedies in parallel merely because the litigation outcome is uncertain. Advance disclosure may make an informed election possible, but it does not guarantee that the claimant can identify the more advantageous remedy. A hybrid trial should be refused where it would materially increase court time and costs without resolving a distinct issue. A preliminary issue should likewise be refused where the proposed question is fact-dependent and would delay, rather than simplify, the substantive determination.

Earlier proceedings established that Edwards Lifesciences SA and Edwards Lifesciences Limited had infringed a patent owned by Boston Scientific SCIMED, Inc. Boston was ordered to obtain disclosure and then elect between an inquiry as to damages and an account of profits.

Disclosure showed that profits from infringing sales had been transferred within the Edwards group, including to Edwards Lifesciences LLC and Edwards Lifesciences (Singapore) Pte Limited. Boston sought permission to advance alternative claims against those companies, and to conduct an account and inquiry in parallel before electing the remedy producing the greater recovery. Alternatively, it sought a preliminary issue concerning intra-group profit transfers. The issues were whether the existing orders should be varied and whether either proposed procedural course was appropriate.

1. The application to conduct a joint inquiry as to damages and account of profits was dismissed. Section 61 of the Patents Act 1977 did not prohibit such a procedure, and there was no common-law bar. The question was therefore one of case management.

2. The court accepted that the later disclosure identifying the companies holding profits was a material change in circumstances. Boston had not delayed so as to lose the opportunity to apply for variation of the earlier orders. Nevertheless, that did not justify a hybrid trial.

3. An account of profits carried an inherent risk. A claimant electing that remedy had to take the defendant as found, including the possibility that little or no profit had been made. Island Records Ltd v Tring International plc [1996] 1 WLR 1256 showed that case management could reduce the information disadvantage before election. It did not entitle a claimant to obtain certainty as to which remedy would produce the greater recovery.

4. The proposed joint procedure would significantly increase costs and the time required for the court to determine monetary relief. The different treatment of unfair profits under Directive 2004/48/EC did not provide an example of a joint inquiry and account: as explained in Henderson v All Around The World Recordings Ltd [2014] EWHC 3087 (IPEC), such a claim was not an inquiry as to damages in the English sense.

5. The proposed preliminary issue was also refused. Whether intra-group transfer pricing or profit shifting constituted a legitimate deduction could not be resolved as a pure question of law detached from the facts. It would delay the account or inquiry and increase costs and court time. Boston was required to make its election, with further directions to be considered.