Sandoz AG v Bayer Intellectual Property GmbH

Hearing date: 1 October 2025

Approved Judgment

I direct that no official shorthand note shall be taken of this judgment and that copies of the version as handed down may be treated as authentic.

This judgment was handed down at 10.30 am on 7 October 2025 by circulation to the parties' representatives by email and release to The National Archives.

The Deputy Judge:

On 1 September 2025 I handed down judgment on an application by the Inquiry Defendants (“Bayer”): [2025] EWHC 2201 (Pat). In that judgment I gave my reasons for acceding to Bayer's application to strike out, or for summary judgment in respect of, a claim by the Inquiry Claimants (“Sandoz”) for an account of profits under cross-undertakings given by Bayer when obtaining interim injunctions against Sandoz. Sandoz did not seek permission to appeal against my order consequential on that judgment.

The basis of Sandoz's claim for an account of profits was that there were “exceptional circumstances”, namely the matters set out in paragraph 27 of its Point of Claim. In paragraph 49 of my previous judgment I recorded that Sandoz had indicated that it intended also to plead those matters in support of its argument that its loss should be assessed liberally when considering its compensatory damages claim. Sandoz had stated that it intended to do so in its Points of Reply but during the course of the previous hearing I indicated that such a case should be pleaded in Sandoz's Points of Claim.

Sandoz duly served a draft amended Points of Claim in which it seeks to introduce paragraph 32A:

“In addition, [Sandoz] rely on the wrongdoing of Bayer in obtaining the Patent and the Injunctions (as set out at paragraphs 27.1 to 27.9 above) in support of a liberal approach (rather than merely using a ‘broad axe’ in the assessment exercise) being taken to the assessment of their losses, including (in so far as necessary) in support of the assumptions on which their alternative compensatory damages claim is based. Further or alternatively [Sandoz] will say that Bayer's wrongdoing pleaded in paragraphs 27.1 to 27.9 above justify the Court in making presumptions in [Sandoz's] favour in the assessment exercise because Bayer's wrongful conduct enabled it to obtain the Injunctions and thereby will have caused [Sandoz] to suffer any evidential difficulties they may experience in establishing the measure of loss in the counterfactual (in accordance with the principles described by Lord Reed JSC in One Step (Support) Ltd v Morris [2019] AC 649 at [38]).”

Sandoz also served a Points of Reply, in paragraph 32 of which the pleading above is repeated, with the addition of the words “and against Bayer's pleaded alternative counterfactual” at the end of the first sentence quoted above and before the words “in the assessment exercise” in the second sentence quoted above.

In paragraphs 15 and 16 of my previous judgment I set out Sandoz's summaries of paragraphs 27.1 – 27.9 of its Points of Claim. I shall not repeat those in full here. For present purposes it is sufficient to record Sandoz's allegations that (in summary) (1) Bayer had succeeded in opposition proceedings at the EPO by (a) deliberately and dishonestly making false and misleading claims to the EPO regarding the half-life of rivaroxaban, the results of Phase I trials, and the reaction to the suggestion of including a once-daily dosing regimen in the Phase II trials, and (b) dishonestly failing to disclose prior art (including the Harder poster) which would have revealed that its claims were false; and (2) Bayer had sought to defend the validity of the Patent and had sought and obtained interim injunctions despite knowing those matters.

Bayer objected to Sandoz's proposed amendment to its Points of Claim and so the first application before me is by Sandoz, for permission to amend its Points of Claim to introduce paragraph 32A. Bayer asked Sandoz to accept that the corresponding pleading in paragraph 32 of the Points of Reply stood or fell with paragraph 32A. Sandoz did not accept that and so Bayer issued the second application before me, namely one to strike out, or for summary judgment in respect of, that pleading.

There was no material dispute as to the principles to be applied on these applications. I summarised principles relating to strike out and summary judgment in paragraphs 20–22 of my previous judgment and shall not repeat those here.

In addition Bayer relied on the court's power to strike out a statement of case on the basis that it is likely to obstruct the just disposal of proceedings ( CPR 3.4(2)(b)). It referred me to Vardy v Rooney [2021] EWHC 1888 (QB) at [14]–[15] in which Steyn J cited the approach to CPR 3.4(2)(b) set out by Warby J in Duchess of Sussex v Associated Newspapers [2020] EWHC 1058 (Ch). In particular Bayer drew attention to what was said in those cases about the need to interpret CPR 3.4(2)(b) in light of the overriding objective of dealing with a case justly and at proportionate cost and allotting to the case an appropriate share of the court's resources, and the fact that Warby J regarded the fact that irrelevant matter in a pleading was likely to cause a significant increase in cost and complexity as making the case for striking out all the clearer.

It was common ground that a court will refuse permission to amend a pleading to raise a case which does not have a real prospect of success, i.e. that the summary judgment standard applies – see e.g. Kawasaki v James Kemball [2021] EWCA Civ 33 at [17]. Further, it was common ground that the court has a discretion to refuse an amendment which does pass the summary judgment test, and that in the exercise of discretion the overriding objective is of the greatest importance – see e.g. Quah v Goldman Sachs [2015] EWHC 759 (Comm) at [38].

Given the tests to be applied, and the similarities in the pleadings, in the end it was common ground that if Sandoz's application for permission to amend its Points of Claim to introduce paragraph 32A fails, then Bayer's application in respect of paragraph 32 of the Points of Reply must succeed. Sandoz pointed out that paragraph 32 of the Points of Reply additionally acted as a response to Bayer's pleaded counterfactual but did not suggest that could make a difference to the outcome of these applications.

I therefore turn to consider whether the pleading in paragraph 32A of the draft amended Points of Claim raises a case which has a real prospect of success.

I should start by recording that Bayer now accepts that the principle of a liberal assessment applies to the inquiries under its cross-undertakings. With its skeleton argument it served a draft amended Points of Defence (to which Sandoz did not object) in which paragraph 38 reads as follows:

“Without prejudice to the foregoing, Bayer accepts that the principle of a liberal assessment, as described in Les Laboratoires Servier v Apotex Inc [2009] FSR 3 [9], AstraZeneca v KRKA dd Novo Mesto [2015] EWCA Civ 484 [16], and Fiona Trust & Holding Corp [2016] EWHC 2163 (Comm) [50]–[51], applies to the damages inquiries in respect of each Inquiry Claimant. The proper application of that principle to the damages inquiries in these proceedings will be a matter for submission at trial.”

In AstraZeneca v KRKA at [16] Kitchin LJ endorsed the following statement of principle by Norris J in Servier v Apotex at [9]:

“Third, whilst it is for Apotex to establish its loss by adducing the relevant evidence, I do not think I should be over eager in my scrutiny of that evidence or too ready to subject Apotex' methodology to minute criticism. That is so for two reasons, quite apart from an acceptance of the proposition that the very nature of the exercise renders precision impossible. (a) Whilst, in order to obtain interlocutory relief, Servier will not have had to persuade Mann J that it was easy to calculate Apotex' loss in the event of the injunction being wrongly granted, it will have had to persuade him that that task was easier than the calculation of its own loss in the event that the injunction was withheld. The passages I have cited from its skeleton argument and evidence show that it did so. Having obtained the injunction on that footing it does not now lie in Servier's mouth to say that the task is one of extreme complexity and that the court should adopt a cautious approach. Having emphasised at the interlocutory stage the relative ease of the process, it should not at the final stage emphasise the difficulty. (b) In the analogous context of the assessment of damages for patent infringement, in General Tyre [1976] RPC 197 at 212 Lord Wilberforce said:

“There are two essential principles in valuing the claim: first, that the plaintiffs have the burden of proving their loss: second, that the defendants being wrongdoers, damages should be liberally assessed but that the object is to compensate the plaintiffs and not to punish the defendants.”

The principle of “liberal assessment” seems to me equally applicable in the present context. Although a party who is granted interim relief but fails to establish it at trial is not strictly a “wrongdoer”, but rather one who has obtained an advantage upon consideration of a necessarily...