Cross-undertaking in damages - Napp Pharmaceuticals v Sandoz Limited

What is the price of seeking an interim injunction in the Courts of England & Wales? A cross-undertaking in damages.  This is designed to compensate the respondent for any damages sustained as result of an interim injunction, in the event that it subsequently transpires that the applicant was not entitled to interim relief.   But how does one calculate the damages caused by the injunction, and what information should be disclosed to facilitate that process?
The money Kat
The recent interim Patents Court decision of Napp Pharmaceutical Holdings Limited v (1) Dr Reddy's Laboratories (2) Sandoz Limited (and Ohers) [2017] EWHC 1433 (Pat) provides guidance on the issue.  This comcerns the rocket docket case relating to buprenorphine transdermal patches (reported previously here).  Napp, the patentee failed in its claim for patent infringement at first instance and on appeal, resulting in a discharge of the interim injunction.  Sandoz, one of the Defendants, brought a claim for damages in relation to the cross-undertaking offered by Napp, for a cool £100 million.  That is more than the annual value of the market.  Sandoz's case is that the effect of being kept out of the market for six months has led to permanent effects on the market and losses which run into the future. 

Request for Further Information

Napp, the applicant, sought information in the form of a RFI as to the profit margin and price which Sandoz contend they would have charged for the relevant products from the time of Sandoz's planned product launch, had they not been prevented by the interim injunction from selling their product (see paragraphs 14 - 27 for details of specific requests).  Sandoz's Points of Claim lacked any explanation as to how the damages were derived from the figures for sales volumes. Instead, there was "simply a statement that profit margin will remain constant in certain circumstances, and then a statement that by applying the profit margin (unspecified) to the volume data in certain ways a result is produced".  Sandoz did not want to provide detailed pricing information to Napp, its closest competitor.   Sandoz submitted that one could calculate a form of blended lost profits figure working backwards from the total loss claimed and the calculations that were provided.  At the hearing, Sandoz also offered to provide a blended profit margin, blended across all packs and for all Sandoz group companies.

The judge rejected Sandoz's submissions and offer - such a blended figure would not constitute a real profit for an actual product.   Critically, it would also be blended amongst a number of Sandoz group companies who had been introduced into the claim on the cross-undertaking.   It would not be possible to make a proper assessment of the very substantial claim without specific information on lost profits, and it would not be legitimate for the claim to proceed simply on a group basis.  Birss J. explained that although Gerber v Lectra [1997] RPC 443 accepted in principle that in a group, it is possible for a parent company to claim damages on a one-for-one basis even if the loss was suffered by a subsidiary, one cannot simply assume that that will be the case from the outset - it has to be pleaded and proved.
Cross-undertaking in damages - Napp Pharmaceuticals v Sandoz Limited Cross-undertaking in damages - Napp Pharmaceuticals v Sandoz Limited Reviewed by Eibhlin Vardy on Sunday, August 06, 2017 Rating: 5


  1. Sandoz are doing an EU on Napp. Fantasy figures from a deluded continent.

  2. Q. Censorship is justified under which of the following circumstances?

    (a) You are the government in China.
    (b) You are the government in Burma.
    (c) You are the government in North Korea.
    (d) You are an IP blogger.

    A. (d) of course.


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