Teva Pharmaceutical Industries Limited v Sandoz AG

In complex patent litigation involving multiple generic parties, the court should avoid joint and several costs liability where that could make one party pay costs attributable solely to another. Where the court lacks a reliable basis for estimating the relative costs of issues, it may order each party to bear the costs of its own action rather than make a rough issue-based allocation.

An interim costs payment should be a reasonable sum assessed broadly, rather than an irreducible minimum. Comparisons with other cases are of limited assistance. Permission to appeal may be granted where an arguable point of principle could lead to a different result without requiring reconsideration of primary facts or ordinary evaluative findings.

The judgment concerned consequential matters following patent proceedings in which Astellas was the successful patentee against Teva and Sandoz. The parties had shared representation but pursued non-identical cases, and Teva’s action preceded Sandoz’s.

The court determined the allocation of final costs, the amount and apportionment of an interim payment, and applications for permission to appeal. The principal issues were whether the generics should bear costs jointly or through an issue-based allocation, what constituted a reasonable interim payment, and whether the proposed grounds disclosed an arguable point of principle concerning obviousness, the skilled team, the technical contribution and the interaction between Conor and Philips v Asustek.

1. Final costs. Joint and several liability was rejected. Following the approach in Illumina, such an order would be wrong in principle because it could require one generic to pay costs solely attributable to the other. Teva was solely liable for costs incurred before Sandoz’s proceedings began. Thereafter, each generic was ordered to pay the costs of its own action.
2. The court declined to make a rough percentage assessment of the costs attributable to issues pursued by one generic but not the other. The relevant issues had not been fully tried, and the information available to the court was insufficient for a fair arithmetic allocation. The order nevertheless ensured that Astellas could recover all its assessed costs.
3. Interim costs. The former approach of awarding an irreducible minimum was no longer appropriate. The court instead sought to award a reasonable sum. Having regard to the overall complexity of the five-day patent trial, the costs incurred, and the likely reductions on assessment, 60 per cent of Astellas’s costs was reasonable. Teva was responsible for the period before Sandoz’s proceedings began, with the post-commencement amount apportioned equally for interim-payment purposes.
4. Permission to appeal. Permission was granted on grounds concerning the skilled team and the interaction between the principle identified in Conor, the assessment of technical contribution, and the principle that a patentee cannot rely on problems which are not solved. The proposed issue could potentially produce a different assessment of obviousness without requiring reconsideration of primary facts. The judge considered the skilled-team criticism less substantial, but granted permission on that ground because it interacted with the principal ground.
5. The grant of permission did not reflect doubt about the correctness of the decision. The judge considered that the Court of Appeal could take a different view on a point of principle, while noting that the claimants might still fail on other findings, including the assessment of expert evidence.

This was a first-instance consequential judgment following the court’s earlier patent judgment. The judgment does not state the citation of that earlier decision.