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Same cost recovery principles apply to patent cases as other types of litigation, says High Court

Out-Law News | 02 Nov 2016 | 12:37 pm | 1 min. read

The principles that govern when losers of patent disputes can recover costs from winners on particular issues in the case are the same as those that apply to other types of litigation, a High Court judge has said.

In a new ruling issued in a dispute over costs arising from a patent dispute between pharmaceutical companies, Mr Justice Carr admitted there is "a tension" within established case law on the recovery of costs by unsuccessful parties in patent disputes as opposed to other types of cases.

However, he said it is his view that "the approach to awards of costs in patent cases" does not differ "from that adopted in other types of litigation".

Principles established under previous case law entitle the "overall winner" of patent disputes to be paid all of their general costs from the action other than in "the most exceptional circumstances".

Where costs can be "suitably circumscribable" that they can be apportioned to particular issues that the overall winner lost in the dispute, those costs can be recovered by the unsuccessful party in certain circumstances. According to case law, an assessment should be made as to whether the overall winner should recover their costs stemming from the issue they lost or if it is a case that is "so exceptional that the winning party should pay the otherwise unsuccessful party's costs incurred in respect of that issue".

Mr Justice Carr said "there must be something which makes it appropriate and just to order not only that the successful party does not recover his costs, but also that it should pay the costs of the relevant issue". He said, though, that this does not "imply that such awards of costs will be extremely rare".

The judge said: "Where there is a discrete issue, which required substantial expenditure of costs, it may be just in all the circumstances to order payment of costs."

The ruling concerned the matter of costs to be awarded in light of an earlier judgment in favour of Hospira where three patents owned by Cubist Pharmaceuticals were revoked. A fourth patent was conceded as being invalid prior to the trial in that case. 

"This case illustrates the importance for parties to only pursue their best points and the potential cost implications of not doing so," said patent law expert Charlotte Weekes of Pinsent Masons, the law firm behind Out-Law.com. "The court also confirmed that it is not necessary to submit a detailed costs bill on a form of order hearing. As this is not usually the approach taken, the Court's express statement to this effect will be reassuring to patent litigants."