What's Happening?
The High Court has struck out Sandoz AG's claim for an account of profits against Bayer Intellectual Property GmbH in a patent dispute over the drug rivaroxaban. Deputy Judge Michael Tappin KC ruled that cross-undertakings in patent litigation are compensatory, not restitutionary, thus rejecting Sandoz's attempt to claim profits. The dispute originated from Bayer's patent for rivaroxaban, marketed as Xarelto, and involved interim injunctions preventing Sandoz from launching a generic version. Sandoz sought compensation under Bayer's cross-undertakings, claiming losses exceeding £3.9 million.
Why It's Important?
This ruling clarifies the legal framework surrounding cross-undertakings in patent disputes, emphasizing their compensatory nature. It impacts pharmaceutical companies' strategies in litigation, particularly regarding generic market entry. The decision reinforces established legal principles, ensuring that cross-undertakings serve to compensate parties wrongfully restrained by injunctions rather than penalizing the injuncting party. This clarity is crucial for future patent disputes, affecting how companies approach interim relief and compensation claims.
What's Next?
Pharmaceutical companies involved in patent litigation will need to carefully consider the language of cross-undertakings and frame their compensation strategies within established legal precedents. The ruling may influence future litigation strategies, particularly in cases involving generic market entry and interim injunctions. Companies will need to manage client expectations regarding available remedies and ensure precision in drafting cross-undertakings.
Beyond the Headlines
The decision highlights the importance of maintaining established legal principles in patent litigation, ensuring justice through compensation rather than punishment. It underscores the competitive nature of the pharmaceutical market, where interim injunctions can significantly impact market timing and strategy. The ruling may also influence broader intellectual property litigation strategies beyond the pharmaceutical industry.
