Pfizer Limited v Glaxosmithkline Biologicals S.A & Anor

In an issues-based costs order, the court should identify the overall winner, consider whether a suitably circumscribed issue justifies depriving that party of its costs, and then consider whether the unsuccessful party should pay the successful party’s costs of that issue. The order should reflect the costs actually caused by the issue and the overall justice of the case. A discrete issue need not be extremely rare before costs may be awarded against the successful party, but its circumstances must make that order just. The court may also adjust an interim payment to reflect a substantial disparity in the parties’ costs. Permission to appeal requires a real prospect of success.

This was a form of order hearing following the claimant’s successful patent action, decided in the Main Judgment at [2024] EWHC 2523 (Pat). The parties disputed the appropriate deductions from Pfizer’s costs, the amount of an interim payment, continuation of confidentiality protection, and GSK’s application for permission to appeal. The principal costs issues concerned priority, Belgian law, novelty, AgrEvo obviousness, insufficiency and plausibility. Pfizer sought a permanent order protecting confidential information disclosed during the trial. GSK also challenged findings concerning the skilled team, common general knowledge, claim construction, infringement by equivalence, inventive step and Arrow relief.

1. Costs. Pfizer was plainly the overall winner. Applying the three-question approach identified in Lifestyle Equities v Berkshire Polo Club and recently applied in Sandoz v Biogen, the court considered whether discrete issues justified depriving Pfizer of part of its costs and whether GSK should receive costs on those issues. The Priority, Belgian law and novelty issues were separate and technically without merit. A 20% deduction from Pfizer’s costs was appropriate.
2. The AgrEvo, insufficiency and plausibility issues were only partly suitable for separate costs treatment. Some arguments operated as a relatively inexpensive squeeze on the construction of “stabilizes”, while Pfizer lost other standalone arguments. A further 5% deduction was appropriate. The total deduction was therefore 30%, and GSK was ordered to pay 70% of Pfizer’s costs, subject to detailed assessment if not agreed.
3. The court applied the guidance on suitably circumscribed issues in Unwired Planet v Huawei, including the possibility of an issue arising within a broader category. The approach in Pigot v Environment Agency was applied, including the need to reflect the costs actually caused by the issue and to stand back under Civil Procedure Rules 1998, r 44.2. The guidance in Hospira v Cubist on awards of costs against a successful party was also considered.
4. Interim payment. GSK’s proposed reduction of Pfizer’s costs was arbitrary and unprincipled. However, the disparity between the parties’ total costs justified moderation. The interim payment was fixed at 60% of Pfizer’s 70% costs entitlement, rounded to £2.65 million, payable within 14 days.
5. Confidentiality and permission to appeal. Following Lilly Icos v Pfizer, the temporary CPR 31.22 protection was made permanent for the documents and passages identified by Pfizer. The proposed appeal grounds largely challenged factual assessment or repeated arguments already rejected. The challenges to the skilled team, common general knowledge, construction, infringement, inventive step, secondary evidence and Arrow relief disclosed no real prospect of success. Permission to appeal was refused.

The judgment followed the High Court’s Main Judgment in the same proceedings at [2024] EWHC 2523 (Pat). The court refused GSK permission to appeal from the substantive findings.