Pfizer Inc. & Anor v ModernaTX, Inc.

The court may make issue-based costs orders by assessing whether each issue was reasonably and proportionately pursued, while recognising that a point may justify substantial costs even if it ultimately becomes immaterial. Interest on costs is discretionary; the appropriate rate depends on the applicable general principle and the parties’ circumstances. Permission to appeal requires a realistic prospect of success or some other compelling reason. Importance, financial value, or possible use of a judgment abroad does not automatically establish the latter, and such applications are generally best considered by the Court of Appeal.

These proceedings concerned Pfizer/BioNTech’s and Moderna’s patent disputes. The judgment dealt with costs issues arising from particular arguments, the rate of interest, an interim payment, and applications for permission to appeal concerning patents designated ‘949 and ‘565.

The court considered whether individual issues had been reasonably pursued, whether costs should be awarded or withheld, whether interest should be set at 1% or 2% above base rate, and whether the proposed appeals had a realistic prospect of success or raised some other compelling reason.

1. Issue-based costs. The court assessed each disputed issue separately. A late change of position justified no deduction in respect of WO 340 obviousness. On insufficiency/plausibility and Pardi, the fair order was that neither side should receive costs. WO 674 novelty was a direct and largely successful squeeze against added matter, so Pfizer/BioNTech retained its costs. On ‘949, BioNTech received its costs for conditional claim amendments, the RNA Modification Database issue, and secondary evidence. The evidence of Dr Bryant was reasonably served as a precaution in an unclear situation and attracted no adverse costs order.
2. A point is not a mere sub-issue because it later proves non-critical. The RNA Modification Database issue was sufficiently distinct and substantially contested to justify a specific costs award. Paragraph-counting was not a reliable measure of the work involved.
3. Interest. Although authorities were inconsistent, the court accepted the more general principle identified by Males J in Kitcatt and ordered interest at 1% above base rate, taking account of the circumstances of corporate parties and the judge’s usual practice.
4. Interim payment. The court awarded 50%, rather than the commonly used 70%, because of concerns about the scale and proportionality of expenditure, including expert time and the likely reduction of some claimed costs.
5. Permission to appeal. Permission was granted on ‘949 because the novelty issue raised a realistic prospect of a different conclusion concerning construction, individualised disclosure and pointers. The obviousness issue was also included because it involved the same prior art. Permission on ‘565 was refused: the proposed obviousness grounds merely sought to reargue fact-sensitive findings, and the added-matter issue could not affect the result without success on obviousness.
6. Importance of the litigation, the sums involved, the pandemic context, and possible use of the judgment by the EPO did not amount to some other compelling reason. Idenix did not establish an automatic rule. The court considered that such applications should generally be left to the Court of Appeal.

First-instance decision. No prior appellate decision is stated in the judgment.