Sandoz AG & Ors v Biogen MA Inc

The court has a broad discretion when making costs orders. Although the unsuccessful party usually pays the successful party’s costs, the court must consider all the circumstances, including conduct and the way individual issues were pursued.

An issue-based costs order requires a genuinely discrete issue that caused additional costs or materially increased overall costs. The court must assess the practical interaction between issues and stand back to ensure that the order reflects the overall justice of the case. In complex patent litigation, costs should not be divided by excessive salami-slicing or mechanical paragraph counting.

This was a costs and confidentiality judgment following the trial of a patent action between Sandoz and Biogen. Sandoz had succeeded overall at trial, and the court had refused Biogen permission to appeal.

The principal issue was the extent to which Sandoz’s costs should be reduced because it had not succeeded on every issue. The court also considered final confidentiality orders concerning documents and information in the trial bundles.

1. Costs discretion. Under Civil Procedure Rules 1998, CPR 44.2, the court had a wide discretion over whether to make a costs order and its form. The unsuccessful party would ordinarily pay the successful party’s costs, but the court had to consider all the circumstances, including conduct and the reasonableness and manner of pursuing particular issues.
2. Issue-based costs. The three-question approach identified in Lifestyle Equities v Berkshire Polo Club was applied. The court first identified the overall winner, then considered whether the winner should lose its costs of suitably circumscribed issues, and finally whether the losing party should receive its costs of any such issue. The guidance in Pigot v Environment Agency was applied: success on an individual issue did not by itself justify an issue-based order.
3. Assessment of discrete issues. A suitable issue must be assessed at an appropriate level of granularity. The approach described in Unwired Planet v Huawei, with the example in ConvaTec Technologies Inc v Smith & Nephew plc, was considered. The assessment remained one of judicial impression, informed by the costs burden and interaction of the issues, with an overall fairness cross-check. Mechanical paragraph-counting exercises were of limited assistance.
4. Application. Sandoz was the overall winner. A 10% deduction was appropriate for obviousness, a 2% deduction for declaratory relief, and £5,000 for United States lawyers’ fees. No deduction was made for technical infringement, excluded subject matter, Sandoz’s third counsel, or Dr Dugan’s evidence. The total deduction was 12.3%, and Biogen was ordered to pay 87.7% of Sandoz’s costs, including post-trial costs. The interim payment was to be calculated at 70% of the estimated costs award.
5. Confidentiality. Final orders were approved under CPR 31.22 and CPR 32.13 in respect of the documents and information for which confidentiality remained justified. It was disproportionate to require revised copies of documents containing information that had ceased to be confidential.

The judgment followed the trial of the action. The court had refused Biogen permission to appeal from the trial judgment.