PAT LIT: WHO PAYS?

The Court of Appeal ruled yesterday on some interesting costs aspects of patent litigation in SmithKline Beecham plc and others v Apotex Europe Ltd and others [2004] EWCA Civ 1703.

SKB had a patent for paroxetine hydrochloride anhydrate which was substantially free of bound organic solvent. Following patent revocation and infringement litigation, SKB and Apotex sought apportionment of the costs between them in respect of the first instance and appeal proceedings. In earlier proceedings the Court of Appeal had upheld Mr Justice Pumfrey's finding that Apotex did not infringe SKB's patent but it reversed his findings that the patentwas invalid for lack of novelty and inventive step. The patent had itself been substantially amended and claims which SKB relied on until the start of the trial disclaimed were subsequently abandoned. It was impossible to disentangle the various issues and make a precise allocation of costs, so the parties agreed that an overall conclusion should be reached as to whether one side should pay the other's costs and that, if one party did indeed have to pay the other's costs, a proportion of those costs should be offset after taking into account any appropriate factors by way of reduction. It was also agreed that the costs of the first instance and appeal proceedings should be dealt with separately.

The Court of Appeal affirmed that the basic provisions of the Civil Procedure Rules applied as much to complex patent infringement cases as they did to any other type of case. That being so, an issue-by-issue approach should be applied, so far as it was reasonably possible, though even that approach should not be thought capable of achieving a precise figure for costs. On the facts, Apotex were entitled to 16 per cent of their costs at first instance on a standard basis: this reflected the overall justice of the case, given that they were the commercial winners. SKB were also entitled to 25 per cent of their costs of the appeal on a standard basis.

Apotex: entitled, as commercial winners, to a contribution to costs

The IPKat says the cost of intellectual property litigation is so high that appeals to the Court of Appeal on the costs issue are made to look like a worthwhile proposition. In both this case and in Reed v Reed (dealing with trade marks) Lord Justice Jacob has sought to explain and clarify the bases on which costs are awarded. However, it is unfair for litigants to have to finance the cost of develeping costs jurisprudence out of their own pockets: clearer guidance should be made available, through legislation or a House of Lords ruling. Merpel says "I thought this was all about Cat Lit, not Pat Lit".