DSM IP Assets BV & Anor v Algal Omega 3 Limited & Anor [2025] EWHC 1514 (Pat)

[2025] EWHC 1514 (Pat)Case No HP-2023-000001
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
INTELLECTUAL PROPERTY LIST (ChD)
PATENTS COURT
Venue Royal Courts of Justice, Rolls Building, Fetter Lane, London, EC4A 1NLDate 18 June 2025
Before
THE HON MR JUSTICE MELLOR
Between
DSM IP ASSETS B.V.ClaimantsDSM NUTRITIONAL PRODUCTS AGClaimantALGAL OMEGA 3 LIMITEDDefendantsMARA RENEWABLES CORPORATIONDefendant
James Abrahams KC and Kyra Nezami (instructed by Powell Gilbert LLP) for ClaimantsJames Whyte (instructed by Bristows LLP) for DefendantsHearing Hearing date: 11 th June 2025
APPROVED JUDGMENTThis judgment was handed down remotely by circulation to the parties' representatives by email. It will also be released for publication on the National Archives and other websites. The date and time for hand-down is deemed to be Monday 18 June 2025 at 4pm.
[1]This is my Judgment from the Form of Order hearing which took a full day of argument on 11 June 2025. I decided to reserve my judgment because the arguments on costs extended beyond those discussed in the skeleton arguments, I wanted to review certain of the materials to which reference had been made and because the costs involved are substantial.[2]The backdrop is my judgment from the trial on liability in this action on 20 March 2025: [2025] EWHC 675 Pat (my ‘Main Judgment’). DSM sued for infringement of 3 patents and Mara counterclaimed alleging invalidity. I summarised the overall outcome at [892] namely: i) EP155 was valid and infringed, albeit it expired in May 2023. ii) EP740 was invalid on several bases:(1) the proposed amendments were not permissible as not being clear and concise and because they would have added matter;(2) even if the proposed amendments had been allowed, claim 1B would have been invalid for obviousness over Fabritius; and(3) whether amended or not, EP740 was plainly invalid for breadth of claim insufficiency. iii) EP801 was invalid for obviousness over Kobzeff.[3]Shortly before this hearing, the First Defendant (‘AO3’) was placed into administration on 27 May 2025. Its current status appeared to be common ground: AO3 is a Northern Irish company, so its administration is governed by the Insolvency (Northern Ireland) Order 1989. By para 44 of Schedule B1 of the Order, there is an automatic moratorium on proceedings against AO3. The administrators have not consented to DSM continuing these proceedings against AO3. DSM say they are considering making an application to the High Court of Justice in Northern Ireland for permission, but in the meantime, both sides accepted I am only able to make orders as between DSM and the second defendant, MRC. However, on liability, it is unnecessary to distinguish between the two companies because joint liability was admitted. Subject to all of that, it is convenient to refer generally to the defendants as Mara.[4]At this hearing the following issues arose for decision: i) The costs of the liability trial, and interim payment. ii) The scope of Island Records Disclosure iii) Permission to Appeal: Mara seeks PTA on EP155. DSM seeks to appeal on EP801. iv) DSM also sought permission to apply for a dissemination Order, if it proves necessary to do so. v) The costs incurred since the end of the liability trial. COSTS The dispute in outline.[5]DSM’s total estimated costs were £4.386m. Mara’s total estimated costs were £3.135m.[6]So, DSM’s costs were 40% higher than Mara’s. Both sides produced a schedule yielding their respective totals which indicate some reasons for the disparity: i) First, the hourly rates charged to DSM were consistently higher – at partner level by as much as 30%, and at other grades by 15% (senior associate), 18% (associate) and 10% (trainee/paralegal). Mr Whitfield sought to justify the rates by reference to hourly rates indicated in recent costs schedules from other firms engaged in substantial patent litigation, but this rather misses the point. The fact that certain firms charge high rates and certain clients are prepared to pay them does not mean that the entirety of the resulting costs are recoverable. ii) Second, the chargeable hours spent in the litigation. The schedules analysed costs in terms of hours spent on communications (e.g. with the court, the opposing party, with clients, experts, internally) and then a category identified as ‘Plan, Prepare, Draft, Review’ i.e. all the work done on documents. DSM’s solicitors spent more hours on that category (4653) than the total hours spent by Mara’s solicitors in the entire case (4142). DSM’s solicitors spent a total of 7932 hours in the entire case.[7]DSM already have costs orders in their favour relating to(a) the Licence Defence;(b) Dennis 1 and(c) CL020, said to total £228k. As I understand the position, DSM included these costs in their analysis, but Mara excluded them because they are not costs I have to determine.[8]DSM contended they were the overall winners. Based on that foundation, DSM contended that Mara should pay 65% of DSM’s costs, amounting to £2.876m (a sum which included £228k from the costs orders in DSM’s favour), with a 65% interim payment of £1.853m. Before descending into the detail of DSM’s arguments, this is a surprising outcome when DSM lost on 2 of the 3 patents in issue, and the issues on those 2 patents were more involved than the patent on which they won.[9]Mara contended they were the overall winners, but accepted they should pay the costs of EP155 and another substantial deduction in respect of the EP801 infringement costs. Their suggested overall result was that they should recover 25.4% of their costs, amounting to some £800k, with a 65% interim payment at £520k.

Applicable principles

[10]The applicable principles were not in dispute, although DSM sought to deploy a sub-paragraph from Pigot in an unusual way.[11]Mara’s starting point was CPR44.2(1) (the Court’s discretion), 44.2(2) (the general rule) and the supplements to the general rule in 44.2(4) & (5), and they relied on this summary from Terrell on Patents (20th Edition) at [23-233]:
‘The Court has a discretion as to whether costs are payable by one party to another, the amount of those costs, and when they are paid but the general presumption is that the loser pays the winner’s costs to an extent which reflects the extent to which the winner has been successful.’
[12]Mara also relied on the following pertinent passages from the authorities.[13]First, the following statement of Arnold LJ in Conversant v Huawei [2019] EWHC 3130 (Pat) at [14]: As has often been pointed out, the whole point of the new costs regime under the Civil Procedure Rules is to get away from the winner-takes-all approach under the RSC, and instead to adopt an approach where the incidence of costs reflects the degree of success of the parties on the issues that were raised. That was established as long ago as the decision of the Court of Appeal in Phonographic Performance Ltd v AEI Rediffusion Music Ltd [1999] 1 WLR 1507. Nothing has happened since then to change that basic approach.[14]Second, the formulation of the familiar three questions set out by Arnold J. (as he then was) in Hospira v Novartis [2013] EWHC 886 (Pat) at [2], line breaks added):
‘first, who has won; secondly, has the winning party lost on an issue which is suitably circumscribed so as to deprive that party of the costs of that issue; and thirdly, are the circumstances (as it is sometimes put) suitably exceptional to justify the making of a costs order on that issue against the party that has won overall.’
[15]As to the second question and what is meant by “an issue” in this context, in Unwired Planet v Huawei [2016] EWHC 410 (Pat) at [5] Birss J. (as he then was) made some comments in the context of patent liability trials but which nonetheless illustrated that an “issue” may be considered at any suitable level of generality / granularity:
‘One issue is: what is a suitably circumscribed issue? Or in other words, at what level of generality or granularity is that matter to be decided? Plainly it will vary from case to case. Often in patent cases one kind of suitably circumscribed issue and appropriate level of granularity is taking things at the level of individual cited items of prior art, but that is not a hard and fast rule. It is possible for a suitably circumscribed issue to arise within a broader category. An example of this was the Court of Appeal in ConvaTec Technologies Inc v Smith & Nephew plc [2015] EWCA 803 (Civ). Here, instead of dealing with the costs at the level of the issue of infringement as a whole, the court made a special order relating to experiments which formed part of the infringement case.’
[16]In relation to the third question, there is no specific requirement of exceptionality. The question is whether it is appropriate in all the circumstances of the individual case not merely to deprive the winning party of its costs on an issue in relation to which it has lost, but also to require it to pay the other side’s costs (see Arnold J. in Hospira v Novartis at [4]). In Unwired Planet Birss J. explained: The second issue is the role of reasonableness and culpability. Clearly if the winning party has behaved unreasonably or is culpable in relation to an issue on which it lost, then that is a factor which can be relevant to the question of whether to deprive the winner of its costs or award those costs to their opponent. But the law is clear that even if the overall winner was reasonable to pursue an issue on which it lost, it does not follow that one should not deprive the winner of those costs nor does it follow that one should not award those costs to the opponent, merely because the overall winner behaved reasonably in relation to that issue.[17]After referring inter alia to Arnold J. in Novartis at [4], Birss J. concluded on this point at [8]: Therefore, in my judgment, using the expression “suitably exceptional” is not really an appropriate way of describing the test today. The test today is whether it is appropriate, in all the circumstances in an individual case, to make whichever order one is thinking about. The test is appropriateness, not exceptionality.[18]DSM did not dispute any of these principles, but they submitted a slightly different formulation of the overall approach which brings out some further points, based upon Specsavers v Asda [2012] EWCA Civ 494, Novartis and my own judgment on costs in Pfizer v GSK [2025] EWHC 52 (Pat), namely that the effect of CPR44.2 is as follows: i) First, the Court has to determine who is the overall winner. The starting point is that that party gets their costs of the proceedings, including the general costs not attributable to any particular issue. ii) Second, the Court will consider whether to make an issue-based costs order. That involves considering whether it is appropriate in all the circumstances of the individual case:(i) to deprive the winning party of its costs on an issue; and(ii) to require it to pay the other side's costs (That specific formulation comes from Sky v Skykick [2020] EWHC 1735 (Ch), [2020] RPC 17, [50]-[51] (Arnold LJ)). iii) Where the court orders a party to pay costs subject to detailed assessment, it will order that party to pay a reasonable sum on account of costs, unless there is good reason not to do so.[19]DSM also cited sub-paragraph (3) from the summary set out by Stephen Jourdan QC (sitting as a Deputy Judge) in Pigot v Environment Agency [2020] Costs LR 825 at [6]. I cited the complete summary in two previous judgments on costs (LifestyleEquities [2023] EWHC 2923 (Ch) at [39] and Sandoz v Biogen [2024] EWHC 2911 (Pat) at [5]) and I do so again here to put sub-paragraph (3) into its proper context. ‘(1) The mere fact that the successful party was not successful on every issue does not, of itself, justify an issue-based cost order. In any litigation, there are likely to be issues which involve reviewing the same, or overlapping, sets of facts, and where it is therefore difficult to disentangle the costs of one issue from another. The mere fact that the successful party has lost on one or more issues does not by itself normally make it appropriate to deprive them of their costs. (2) Such an order may be appropriate if there is a discrete or distinct issue, the raising of which caused additional costs to be incurred. Such an order may also be appropriate if the overall costs were materially increased by the unreasonable raising of one or more issues on which the successful party failed. (3) Where there is a discrete issue which caused additional costs to be incurred, if the issue was raised reasonably, the successful party is likely to be deprived of its costs of the issue. If the issue was raised unreasonably, the successful party is likely also to be ordered to pay the costs of the issue incurred by the unsuccessful party. An issue may be treated as having been raised unreasonably if it is hopeless and ought never to have been pursued. (4) Where an issue based costs order is appropriate, the court should attempt to reflect it by ordering payment of a proportion of the receiving party’s costs if that is practicable. (5) An issue based costs order should reflect the extent to which the costs were increased by the raising of the issue; costs which would have been incurred even if the issue had not been raised should be paid by the unsuccessful party. (6) Before making an issue-based costs order, it is important to stand back and ask whether, applying the principles set out in CPR rule 44.2, it is in all the circumstances of the case the right result. The aim must always be to make an order that reflects the overall justice of the case.’[20]The final point to note is Jacob LJ’s reminder in SmithKlineBeecham Plc v Apotex Europe Ltd (No.2) [2005] FSR 24 that ‘an issue-by-issue approach is likely to produce a ‘fairer’ answer and is likely to make parties consider carefully before advancing or disputing a particular issue, it should be thought that it is capable of achieving a ‘precise’ answer.’ And ‘The best that can be achieved is an estimate which is necessarily going to be somewhat crude.’ Underpinning this is the notion that the process of estimation will work both ways, perhaps favouring one party slightly on one point and the other party on others, which is why it is necessary to stand back and ask oneself whether the analysis has produced the right result and reflects the overall justice of the case.[21]As is often the case, the parties adopted positions which were very far apart, so it is necessary for me to summarise the arguments of each side.

DSM’s approach in outline

[22]DSM’s contention that they were the successful party relied on two linked arguments.[23]DSM’s first argument was that Mara would be writing DSM a cheque. This argument evokes the dictum of Longmore LJ in AL Barnes v Time Talk [2003] EWCA Civ 402 at [28], a case about unpaid invoices (i.e. it was just about money), in which the CA had to address the Claimant’s cross-appeal on costs:
‘In what may generally be called commercial litigation (and this case, like Dyson’s was proceeding in the Leeds Mercantile Court), the disputes are ultimately about money. In deciding who is the successful party the most important thing is to identify the party who is to pay money to the other. That is the surest indication of success and failure.’
[24]DSM submitted that Mara will have to write a big cheque. The adoption by DSM of this argument led to a considerable amount of evidence in which DSM estimated that their damages for infringement of EP155 might amount to at least an order of magnitude greater than the total costs of the proceedings.[25]DSM’s second argument as to why they are the overall winner is founded on an assertion that (and I quote from their skeleton argument):
‘DSM’s primary commercial objective was never to halt Mara’s operations in this space. Rather DSM was seeking fair compensation for the substantial loss of profits caused to its operations by Mara’s acts of infringement.’
[26]From that foundation (that DSM are the overall winner), DSM accepted they should not recover costs on issues where Mara were successful, namely: i) EP740 validity (save for a piece of prior art referred to as CL020). ii) EP740 infringement. iii) EP801 validity in so far as it concerns Kobzeff. iv) EP801 infringement, in so far as it concerns pH 8 rounding.[27]So DSM’s costs of those issues would be deducted from DSM’s overall total. Moving to Mara’s costs of those issues (on which Mara had succeeded), DSM then proposed that there should be no further deduction from their costs based upon(i) DSM’s attempts to settle the dispute;(ii) allegations about Mara’s conduct, particularly regarding the PPD and EP801 infringement and(iii) “DSM’s reasonable and proportionate response to pursuing and defending issues in the dispute”.[28]I have to analyse these points later, but, as pointed out in Mara’s evidence, DSM’s position produces some surprising results: i) Despite being wholly successful on EP740, Mara recovers none of the general costs attributable to that patent. Dr Bacon made the valid point that day-to-day activities of running litigation are undoubtedly increased the more complex and substantive the litigation becomes. This action, involving 3 patents, each with a different priority date, and with multiple claims in issue and multiple proposed amendments to the claims was undoubtedly towards the more complex and substantive end of the spectrum. ii) Again, despite succeeding in revoking EP801, Mara only recovers the limited costs of Kobzeff and the pH 8 rounding issue, but none of the other costs (including general costs) attributable to EP801. iii) Dr Bacon observed in his evidence that this is all ‘the wrong way around’.

Mara’s approach in outline

[29]Mara contended they were the overall winner, having won on two of the patents (those which could have given rise to injunctive relief lasting until March 2029, in the case of EP740 and June 2031 in the case of EP801), but lost on one.[30]From that starting point, Mara accepted that they should pay the costs of EP155 and should incur a substantial deduction regarding the EP801 infringement costs. There were aspects of Mara’s analysis which Dr Bacon indicated were ‘generous’ to DSM.

Who was the overall winner?

[31]During the hearing, Counsel for DSM invited me to give my decision on this point so that the argument on the second and third questions could be directed appropriately. This was an eminently sensible suggestion and I ruled that it was clear to me that Mara achieved greater success than DSM, and, to the extent that it mattered, Mara were the overall winner. I also said that I was, in any event, inclined to treat the costs relating to each patent separately, because that would achieve a fair result.[32]That short ruling reflected a number of considerations: i) First, that the Court is not hidebound by the three questions and they are only a convenient structure by which to analyse costs arguments. ii) Second, as Mara submitted, this Trial was effectively three separate patent trials in one, albeit it was cost-effective and convenient to deal with all three patents together because of common subject-matter, CGK and expert evidence. iii) Third, in my view, to reach a fair result on costs, it was necessary to give effect to the overall result on each patent, and to make appropriate deductions in the context of each patent. iv) Fourth, because there was considerable force in Dr Bacon’s observation that DSM were approaching matters the wrong way around on EP740 and EP801.[33]In more detail, my reasons for so ruling are as follows and for this purpose I start by analysing DSM’s contention that they were the winners. I have outlined the two related arguments which DSM put forward above.[34]As to the first – that the financial relief which DSM will recover for infringement of EP155 from 2017 to May 2023 will be large – the first point to make is the obvious one that the amount of any financial relief to which DSM may be entitled was not in issue at the Trial. It is a matter for determination at any inquiry or account.[35]DSM filed substantial evidence for this FOO hearing explaining their contentions as to why the cheque will be a big one. Naturally, Mara had to respond and put forward a variety of arguments as to why the damages might not be anywhere near what DSM argued for and, indeed, that DSM’s entitlement might only be to a reasonable royalty for some or perhaps nearly all the sales. DSM’s arguments focussed entirely on why their claim for damages would be substantial, not least because Mara filed evidence which suggested that the Defendants had made no profits over the years in question.[36]I do not propose to address that evidence. Each side will be able to deploy these arguments on any inquiry or account and what DSM are entitled to by way of damages or profits for infringement of EP155 is a matter for the inquiry or account in due course, and the resulting figure will have nothing to do with the assessment of who was the overall winner of the liability trial (in the absence of any offer the assessment of which would depend on the amount of financial recovery). To the extent that any of these arguments matter at this stage, I formed a very provisional view that DSM’s arguments gave rise to an exaggerated total and that Mara’s arguments appeared to have force, but it would all depend on the evidence filed in the inquiry or account.[37]I must assess who is the overall winner of the liability trial, based upon the issues which were raised in the course of the litigation leading to that trial.[38]DSM’s second related argument as to why they are the overall winner is founded on an assertion that (and I quote from their skeleton argument):
‘DSM’s primary commercial objective was never to halt Mara’s operations in this space. Rather DSM was seeking fair compensation for the substantial loss of profits caused to its operations by Mara’s acts of infringement.’
[39]This assertion raises two key points: i) First, whether DSM were seeking injunctions to restrain infringement of EP740 and EP801. ii) Second, whether DSM was seeking fair compensation for Mara’s acts of infringement.[40]The assertion came as news to Mara, not least because throughout, DSM claimed, by way of final relief, injunctions to restrain infringements of all 3 patents, injunctions which would endure until expiry of the relevant patent. In the usual way DSM claimed an inquiry as to damages or, at their election, an account of profits, and there is no doubt that the court would award DSM fair compensation at the conclusion of any inquiry or account.[41]However for present purposes, what matters is what DSM indicated they considered to be fair compensation.[42]The whole argument appeared to me to be founded on an offer made Without Prejudice Save As To Costs (WPSATC) by DSM in a letter dated 29 September 2024, just a few days before the trial started, and when both parties were ready for the trial to start. This letter was sent after exchange of trial skeletons on 26 September 2024.[43]In very brief summary, the main features of the offer were as follows: i) Discontinuance of all claims in the action and all pending proceedings in the EPO. ii) Future co-existence on the basis of a release for all past infringements and a non-exclusive worldwide licence under the three patents and all corresponding patents worldwide, subject to the following restrictions: a) Manufacture to be limited to the existing AO3 facility in Knowsley, UK. b) The ongoing licence to be restricted to Mara DHA, i.e. excluding Mara DHA Plus or any product with greater than 500mg/g of DHA. iii) Payment of the substantial sum of $40m for past infringements. iv) Payment of an ongoing royalty (until the expiry of the last patent EP801) of $10 per kg.[44]As well as the WPSATC offer, DSM also relied on some evidence given by Mr Whitfield, the partner in charge of DSM’s litigation at their solicitors Powell Gilbert LLP. I quote the relevant parts:
‘4. The facts set out herein are true and are from my own personal knowledge unless otherwise indicated, in which case I identify the source of the information and, in each case, I believe such information to be true. Where I refer to the knowledge or intentions of DSM I do so on the basis of instructions and information received from Daniel Bujas, Head of IP Partnerships, Licensing, and Valuation.’ 6. ‘….as explained below, it was not a primary objective of DSM in this litigation to remove Mara from the market, but rather to seek compensation for Mara’s uses of its technology.’ ‘14. Paragraph 6 of Bacon 3 records that there was no pre-action action correspondence. However, DSM did seek to resolve these proceedings without the need for a trial and its efforts in that regard were ignored by Mara. 15. Throughout these proceedings, DSM has been acutely aware of their duty to assist the Court in furthering the overriding objective. This includes making proactive efforts to consider how the dispute could be resolved efficiently, thereby minimising the need for additional court time and resources. 16. I understand from Mr Bujas that DSM is a significant commercial entity in the microbial oil market and takes its role as a responsible supplier of these important nutritional products very seriously. DSM’s customers expect them to act with integrity and fairness, and DSM are committed to upholding these values. DSM's primary commercial objective in this litigation was never to cease Mara’s operations in this space. Rather, DSM was seeking fair compensation for the substantial loss of profits caused to its operations by Mara's acts of infringement. 17. This position is clearly set out in the Without Prejudice Save as to Costs letter sent by my firm to Mara’s solicitors on 29 September 2024 (the September offer) (Exhibit TW-9 page 70). In this letter, DSM indicated that it was prepared to accept the sum of US$40,000,000 in respect of Mara’s past damages liability and set out a proposal for future co-existence on the market. Regrettably, Mara did not respond to the September offer at all.’
[45]As indicated above, in addition to the lump sum payment of $40m, the ‘proposal for future co-existence on the market’ required Mara to pay a royalty of $10 per kg of Mara DHA product. Based on the fact that these products are sold in a competitive market and Mara’s normal selling price per kg, in my view Mara had a strong argument that a $10 royalty per kg would price them out of the market. This level of royalty does not strike me as ‘fair compensation’ but of course, DSM are not shut out from arguing that is the appropriate reasonable royalty if that measure of damages needs to be deployed on any inquiry.[46]It is relevant also to note some earlier paragraphs in the WPSATC letter in which DSM sought to summarise the likely outcome of the action if the offer was not accepted. Naturally enough, DSM expressed confidence in its case and continued:
‘Accordingly, DSM fully expects the UK Case to lead in due course to the grant of injunctions restraining Mara from infringing EP740 and EP801.’
[47]Overall, the WPSATC letter was not sending a message that this case was just about fair compensation, in my view. The offer which was made essentially asked for complete capitulation by Mara. Injunctive relief remained in the background as a means to persuade Mara to accept the offer or some other terms, in the usual way. Bearing in mind that Mara were fully prepared for trial, it is not at all surprising that they did not respond to the offer and instead chose to argue their case at trial.[48]In these circumstances, I found DSM’s assertion unconvincing for a number of reasons.[49]First, as Dr Bacon observed in his evidence, DSM commenced this action without any pre-action communication. If it really had been DSM’s primary objective throughout to achieve fair compensation, that topic would have been raised pre-action.[50]Second, although naturally I have not seen any without prejudice correspondence, in the open and WPSATC correspondence, there is no sign of DSM communicating this objective until the eve of trial, which is when the WPSATC letter was sent.[51]Third, when the WPSATC letter was sent, DSM and their legal team had had the weekend to consider the Opening Skeleton Arguments for the Trial which had been exchanged on 26 September. The letter refers to prior (expired) offers to Mara sent on 5 September by Daniel Bujas and on 11 September by James Young. Notwithstanding the warm words in [15] and [16] in Whitfield 2, no reference was made to the existence of any other offers made by DSM.[52]Thus, objectively, the WPSATC offer appears to have been the result of an assessment of the likely merits, in the light of the considered positions in the Opening Skeletons. Although it is now clear that DSM failed to beat or match their offer because of features (as summarised above) by which DSM sought to achieve commercial advantage over Mara, the focus (albeit not exclusively) on compensation is consistent with DSM entertaining the possibility that they might not succeed on EP740 and EP801. Furthermore, as I have already said, from the information I was provided with on this application, it seemed highly likely that a royalty of $10 per kg would price Mara out of the market.[53]In all the circumstances, there was considerable force in Mara’s submission that this offer was not realistically capable of acceptance which implies that at least one reason for making it was to put a foundation in place for this argument that this case was never really about injunctive relief.[54]Whatever subjective beliefs were held internally at DSM or by Mr Bujas, I agree with Mr Whyte’s submission that I have to assess the first question on an objective basis.[55]Overall, as reflected in the terms of my short ruling during the hearing, it was very clear to me that Mara achieved greater success than DSM at this liability trial. Not only did Mara win on 2 patents versus DSM’s win on 1, Mara won on the 2 patents which were still in force and would have given rise to injunctive relief. Notwithstanding that, I considered that my ruling on costs should reflect the outcome on each patent. Fortunately, the way that Mara presented their costs and analysis facilitates this.[56]I move to the second and third questions which, in this case, are conveniently taken together even though, as I have firmly in mind, different considerations apply to each. Did Mara lose on issues which were suitably circumscribed so as to deprive Mara of the costs of those issues? Should Mara pay DSM’s costs of issues on which Mara lost?[57]Once again, the parties were far apart on these questions.[58]As I have already outlined, Mara accepted they should not recover their costs on EP155 and were further prepared to accept a 10.61% deduction of their overall costs on the topic of EP801 infringement.[59]For their part, as submitted by Ms Nezami, DSM suggested much more significant deductions or alterations to Mara’s proposal, as follows: i) On EP801 infringement, DSM suggest that Mara should pay 10.61% of DSM’s costs. ii) On EP740 validity, DSM suggested a further 6.6% deduction in respect of validity attacks which were raised and abandoned, some just before trial. iii) On EP801 validity, a further deduction of 3.3% to reflect the fact that the obviousness attack over Hendrik failed. iv) On EP155, that the sum payable in respect of DSM’s costs should be some £300k greater on the basis that Mara’s proposal reflected Mara’s costs of EP155 and not the greater costs incurred by DSM.[60]The net result of DSM’s arguments was estimated by Ms Nezami would be a payment by Mara to DSM of roughly 7% of DSM’s costs i.e. around £307k. Although this is not an inconceivable result (because there have been instances where a winning party has ended up the net payer to the losing party cf Monsanto and ratiopharm) bearing in mind my Judgment and the extent of Mara’s success at the liability trial, it appears, at first sight, to be a surprising result, but it is necessary to assess the arguments in support.[61]In what follows, there is occasional mention as to what happened at a hearing before Meade J. on 9 February 2024. He made some observations at the start of his judgment [2024] EWHC 355 (Pat) which are pertinent to some of the issues I have to grapple with, although I acknowledge they were based on the situation then presented to him and matters developed significantly after that:
‘1. This is a hearing to consider certain matters relating to various versions of the PPD and requests for information concerning the alleged infringing process. The surrounding circumstances, both procedural and scientific, are of very high complexity ….’ ‘4. The impression sought to be created by the claimants is that the defendants have done a terrible job from start to finish, that matters are in chaos, that there is a very large degree of incompleteness and that there has not been proper engagement. I disagree with this. It is clear that the PPD included a number of mistakes, including some very significant ones which ought never to have happened but that does not mean that the defendants were not trying in general. Mistakes do happen and this is a complicated situation where the way in which the defendants have set up their process does not map neatly to the claims of the patent in suit and -- and I make clear that this is in no sense a decision or a judgment or even an impression about the issues at the end of the day -- the defendants it appears very probably do not think about their process in terms of the features of the claims of the patent in suit, which means that getting the information that is necessary is rather more complicated than might otherwise be the case. 5. My overall impression, impressionistic as it must be given the time for this hearing judged against the high degree of complexity to which I have referred, is that the defendants did make some mistakes in the first PPD and should not have done so but that since then, they have been engaging in a useful and co-operative way. To that extent, I think the claimants' complaints are overstated.’
[62]I start with the points I mentioned above on which DSM relied, namely:(i) DSM’s attempts to settle the dispute;(ii) allegations about Mara’s conduct, particularly regarding the PPD and EP801 infringement and(iii) “DSM’s reasonable and proportionate response to pursuing and defending issues in the dispute”.[63]In my judgment the first point is deserving of no weight at all. Similarly the third point. It is no longer apposite because DSM are not the overall winner, but in any event, it proves too much: just because it might have been ‘reasonable’ for DSM to put in issue points on which they lost cannot displace the approach set out in the three questions.[64]To be fair Ms Nezami did not attempt to argue the first and third points in her submissions. Instead, she focussed her submissions on criticisms of Mara’s conduct. These reflected some of the allegations made in DSM’s skeleton.[65]I propose to deal with Ms Nezami’s points in a different order because they reflect more generally on Mara’s conduct of this litigation.

EP740 validity

[66]DSM summarised their contentions in this way in their skeleton:
‘Mara raised a whole range of attacks including 8 different pieces of prior art (see Annex 3 to Whitfield 2). Only three of these attacks were pursued to the conclusion of trial (obviousness over Fabritius, insufficiency and added matter). As Whitfield 2 ¶59 points out, a number of the prior art citations were abandoned for reasons unrelated to DSM’s claim amendments. For example, in relation to two pieces of prior art, Mara withdrew reliance on them only the week before trial (Annex 2 to Whitfield 2).’
[67]Dr Bacon presented a considered response to Mr Whitfield’s Annex 3, which presents a rather different picture. I have analysed DSM’s Annexes 2 and 3 carefully, but it is clear they present a rather tendentious presentation of what actually happened. Annex 3 presents an exaggerated picture: an allegation of lack of novelty is presented as requiring separate treatment from an allegation of obviousness over the same piece of prior art. Leaving CL 020 aside, it appears that in total 6 pieces of prior art were pleaded against EP740 (Fabritius being successful), giving rise to 8 attacks of either lack of novelty or obviousness.[68]Overall, Ms Nezami suggested a deduction of 6.6% of Mara’s costs on EP740. As Dr Whyte submitted, this figure appeared to have been plucked out of the air, since there was nothing in the evidence to support it.[69]I do not propose to rehearse the entire history of developments on EP740. Suffice to say that I was satisfied that Mara’s conduct when developing its case on the validity of EP740 was entirely reasonable and sensible. Mara had to react to various changes in the case they had to meet regarding DSM’s proposed amendments and their status (i.e. conditional or unconditional), as well as the changes in the number of those claims alleged to be independently valid. As for the dropped prior art: i) Tanaka was dropped only 4 months after the original Grounds of Invalidity and cannot have given rise to substantial costs. ii) Kralovec and Yamane both prompted claim amendments from DSM and were dropped shortly afterwards, having achieved their purpose. iii) Arterburn is an article about DHASCO oil and was pleaded either alone or together with the DHASCO Technical Report. That report was dropped at the same time as Yamane, in May 2024, following claim amendments. Arterburn alone continued as a citation until being dropped in the week before trial. It disclosed an oil with a DHA content of greater than 50%. However, Dr Whyte explained why it was retained until that point – it was to keep DSM honest on the proposed amendment claiming a 55% DHA limit, it not being clear how DSM would seek to interpret the 55% numerical limit. iv) On this point Ms Nezami responded by pointing to the further claim amendment put forward in May 2024 to add the Thraustochytrid limitation. Her point was that Arterburn concerned Crypthecodinium cohnii. Thus, the further proposed amendment to the claims of EP740 disposed of the novelty attack. The obviousness attack was dealt with in Dr Wynn’s report in a couple of paragraphs. However, since DHASCO was a necessary part of the CGK, I doubt that consideration of Arterburn resulted in significant separable costs. In view of the manoeuvring going on, I do not consider it right to make any additional deduction due to Arterburn. v) Barclay was the other citation dropped in the week before trial and was dropped on an assessment that it was not as good as Fabritius. However, in my view there are four reasons why no deduction is appropriate. First, Barclay was pleaded as prior art to EP155 and DSM are already recovering their costs of considering it. Second, because there were many moving parts to the validity attacks on EP740 and DSM’s attempts to avoid them. Third, because even after Barclay had been dropped, it remained relevant: it was referred to numerous times both at trial and in my Judgment, being an important part of the background. Fourth, from the point of view of costs, Barclay cannot be considered a suitably circumscribed issue.[70]As reflected in my Judgment, Mara won hands down on EP740. For the brief reasons summarised above, in my view there was nothing in DSM’s criticisms in the way Mara conducted their validity case on EP740, so no deduction on this ground is appropriate. In any event, there was nothing to support a deduction as large as the suggested 6.6%. That suggestion itself suggests a rather cavalier or opportunistic attitude in DSM’s arguments on costs.

EP801 validity

[71]I held EP801 obvious over Kobzeff but rejected Mara’s obviousness attack based on Hendrik. Ms Nezami also pointed to Mara dropping their sufficiency and plausibility arguments on pH 8 in the course of trial or shortly before. There was no evidence of what costs were incurred, but based on Kobzeff representing 3.3% of DSM’s costs, she submitted that a similar proportion for Hendrik and the two insufficiency points. Ms Nezami also relied on the problems with Dr Kyle’s evidence on EP801, plus one piece of prior art Ruecker which was dropped.[72]As Dr Whyte explained however, Hendrik was the PCT application arising from Bijl and DSM are already recovering the costs of considering Bijl on EP155. As for insufficiency, he explained (by reference to the somewhat shifting approach taken in Mr Dueppen’s evidence on the technical contribution in EP801, and the pleading of insufficiency) why the insufficiency points were there to constrain what DSM could claim was the technical contribution. Accordingly, he submitted the sufficiency points were not stand-alone but there to act as squeezes on technical contribution. Ruecker prompted claim amendments from DSM and was dropped in the light of them.[73]Overall, I see no reason to make a further deduction from Mara’s costs. In any event, Ms Nezami’s proposed 3.3% would have been excessive.

EP155 – the appropriate deduction from Mara’s costs to reflect DSM’s success

[74]Under this head, Ms Nezami developed two points which were not in DSM’s skeleton but were debated in the evidence. She sought to justify DSM’s costs of EP155 being some 30% higher than those incurred by Mara for two reasons.[75]First, because DSM instructed two experts as opposed to the single expert instructed by Mara. Both of DSM’s experts addressed issues on EP155, but both sides had to address the same issues. It is clear from what I have said above that far more hours were spent in drafting documents on DSM’s side and the most significant documents in any patent case are the expert reports. If DSM spent much longer drafting expert reports or if there was any duplication on EP155, I do not see why those costs should be borne by Mara.[76]Her second point concerned a point raised by Mara as to the correct taxonomy of the strains used by Mara, and whether they were Schizochytrium strains according to the meaning of that term in the claims of EP155, even though Mara’s regulatory filings state that their microbial strains were classified under that genus. The point was that the taxonomy of various strains had changed since the priority date of EP155.[77]In its defence, Mara made no admission on this point, a position repeated in their response of 7th February 2024 to a Notice to Admit facts. Following the hearing before Meade J. on 9 February 2024, two paragraphs were added to the PPD under the heading Taxonomic Classification, this being served on 24 February 2024.[78]Ms Nezami argued that Mara’s position was opaque, so it was unclear what the issue was between the parties, and that it was not clarified until four months later when, in June 2024, Mara admitted this feature of the claim. She alleged this led DSM to incur ‘significant unnecessary costs’, although no material was provided to enable any estimate to be made.[79]In response, Dr Whyte submitted there was no lack of clarity in Mara’s position or pleadings for the following reasons: i) First, because in the response to the Notice to Admit, Mara made it clear it was a construction issue. ii) Second, because the information in the paragraphs added to the PPD had been in Dennis 1 which had been served prior to and which was the subject of argument at the hearing on 9 February 2024. iii) Third, because as soon as DSM clarified their position on the construction of this feature of the claim, Mara was able to make the admission. In this regard, I was referred to a letter from Bristows dated 1 March 2024. I will not set out the relevant text from the letter, but over 6 fairly substantial paragraphs, Mara’s position on this taxonomic issue was clearly explained in full. DSM was requested to state their position on construction. Having explained the details, Bristows said ‘We do not believe the taxonomic position as set out above should be in dispute.’ The implications were also spelt out: ‘Should the issue remain live, our clients do not intend to lead expert evidence on the question of taxonomic classification as the question is a binary one of construction between two positions that your clients should be able to confirm.’ iv) As Dr Whyte submitted, it was Mara which was taking the initiative to try to narrow the issue. Furthermore, it seems to me that that letter presented DSM with all the necessary information.[80]Ms Nezami responded by referring to the first sentence I quoted from the letter above and submitted that because the taxonomy was in dispute, DSM had to spend money investigating the issue.[81]In his evidence, Dr Bacon explained the issue was potentially relevant to issues of sufficiency and technical contribution for EP155.[82]My impression overall is that it was not unreasonable for Mara to raise this point and they took the initiative to try to dispose of the issue. As far as I can see, the ball was clearly in DSM’s court from March to June 2024 to clarify their position on construction. Once they did, infringement of EP155 was admitted. In short, I see no basis on this point to increase the costs on EP155 which Mara should pay.

EP801 infringement

[83]I turn finally to this topic, which is the most substantial. The scope of the dispute lies between Mara’s proposal of a deduction of 10.61% of Mara’s total costs on all three patents and DSM’s contention that a further deduction of 10.61% should be made to cover DSM’s costs of certain EP801 infringement issues, Mara’s proposal essentially being ‘no order as to costs’ of those issues.[84]I emphasise that Mara’s proposal is not for a deduction of 10.61% of their costs on EP801 (which would have amounted to around £112k), instead it is 10.61% of Mara’s total costs of all three patents, which include the general costs of the action in their figures, amounting to £332,657. For reference, 10.61% of DSM’s total costs is a little over £465k.[85]Ms Nezami’s starting point was that the parties were agreed that the pH 8 rounding issue and the other EP801 infringement issues were suitably circumscribed. Her next step was that, subject to the pH 8 rounding issue, non-infringement of EP801 was abandoned by Mara in the week before trial. By that time, considerable costs had been expended, particularly on expert evidence which had to address the vexed issue of when lysis happened in Mara’s process(es) and therefore when an emulsion formed. This required consideration of two theories, developed in Dr Kyle’s evidence: the Skeleton Theory and the Protoplast Theory, which supported the contention that step (b) in the claim never occurred in Mara’s process(es). Ms Nezami also pointed to Mara’s pleading which referred to enzymatic disruption (as opposed to enzymatic lysis), as indicating that Mara was relying on theories of this type throughout.[86]As Ms Nezami said, the problem was that the PPD at [11] described an unseparated mixture of oil and cell debris: in other words an emulsion, as Dr Kyle volunteered in cross-examination. The same point applied to various annexes to the PPD. She submitted that Mara and Dr Kyle ought to have noticed that Dr Kyle’s theories could not be correct. Furthermore, Dr Kyle himself accepted in cross-examination that the two theories were implausible.[87]Ms Nezami also suggested this non-infringement argument led to problems with the PPD. As Meade J. observed in his ruling at the 9 February 2024 hearing:
‘It is clear that the PPD included a number of mistakes, including some significant ones which ought never to have been made.’
Further disclosure was ordered, which led to over 500 pages of material being disclosed.[88]The upshot, according to Ms Nezami, is that this meritless non-infringement point was run from November 2023 until the week before trial and then dropped (perhaps not surprisingly), and DSM should recover their costs, notwithstanding that Mara won on EP801 overall.[89]Dr Whyte’s answer was the position was not as simple: there were points in favour of each side on this issue.[90]First, he relied on the letter of 25 September 2024 in which Mara confirmed the only non-infringement point was the pH 8 rounding issue provided DSM did not resile from the broad construction of claim 1A as advanced and as supported in Mr Dueppen’s evidence. He pointed out that DSM did attempt to resile from this, in an attempt to include infringement and avoid invalidity, not only at trial but also in their application to me for permission to appeal. This included the ‘order of steps’ argument, which I rejected in my Judgment, and found in favour of the broad construction, which exposed the claim to the argument on Kobzeff, which succeeded. His point was that the infringement issues were acting as a squeeze on validity, until DSM’s expert evidence showed they were adopting a broad construction, whereupon Mara restricted their case to the pH 8 rounding issue.[91]He reminded me of [675]-[677] of my Judgment where I outlined the EP801 issues. I noted in [675] the letter of 25 September 2024 and in [676] that ‘the issues which had been or were live on infringement had consequences as to the breadth of the claim’. Sub-para i) was the rounding issue but sub-para ii) was the point on step (b), the construction of ‘raising’ which was part of the ‘order of steps’ argument.[92]So, Mara’s position was that the interplay between validity and infringement alone would lead to no deduction. Dr Whyte however, realistically acknowledged the Skeleton and Protoplast Theories, but his submission was that they had very little impact on the expert evidence, identifying only two paragraphs on them in Mr Dueppen’s reply report.[93]As for their impact on the PPD, Dr Whyte submitted that the documentary disclosure ordered at the hearing on 9 February 2024 was not sought on these non-infringement issues but because of the order of steps issues. On this point I was referred to DSM’s skeleton for the 9 February hearing which at [12] identified the order of steps as a ‘crucial point’ in the case and at [43] that the issue was one of lack of clarity over timing and the order of the steps.[94]This seems to be reflected in some further paragraphs in the Judgment of Meade J., to which I was referred at [15], [17], [19] which led the Judge to make the Order in the terms which Mara sought.[95]In summary, DSM were concerned about variations in the Defendants’ processes over time. As Meade J. recognised ‘..the problem is that the defendants' process is not one process but many and has varied over time’ and that ‘The PPD does not currently cover all such variations.’[96]At [19] Meade J pointed out there was no strong reason to think the earlier versions would be material at trial, but it could not be said they would not be material at trial. Dr Whyte submitted that DSM obtained nothing useful regarding the order of steps from the disclosure, and the case turned on what had already been set out in the PPD and the pleadings: in other words, some of the earlier versions featured pH values of less than 8, so were not material following my decision on construction.[97]Dr Whyte acknowledged that DSM found a reference in those documents to an emulsion, but submitted that was icing on the cake, because the PPD at [11] already described an emulsion. Dr Whyte summarised the position thus:
‘So altogether, the position on the PPD is this. Mistakes were made early on but they were rectified. As Meade J explained, the defendants had been engaging and had been making a real and genuine effort to give a fair picture; those were his words. It was DSM that was pressing for documentary disclosure, and they sought it on the basis of needing chapter and verse on order of steps, and we were the ones who had to constrain that documentary disclosure from the excessive breadth that DSM were seeking. In the end, that disclosure did not assist DSM on the order of steps. First of all, because it did not paint a materially different picture, and, secondly, because we won on the squeeze with validity. Having been through the EP '801 infringement points, in the round, then, we say that we should certainly have our costs of the construction point on which we won, and that is the point that required us to prepare significant material in the PPD about processes which were found not to fall within the claim, and beyond that, costs, we say, should fall where they lie, and that is for the reasons I have explained: we ended up winning on the infringement squeeze, and the documentary disclosure that DSM says was so expensive was founded on the issue that was the subject of that squeeze, and did not go anywhere.’
[98]In her reply, Ms Nezami urged me to keep in mind the Skeleton and Protoplast arguments, which, if accepted, would have been a complete answer to infringement. Although abandoned, she showed that they occupied more than just the couple of paragraphs in Mr Dueppen’s reply report. In his first report, he had to address the origins of the argument which lay in the distinction between enzymatic disruption and enzymatic lysis.

Decision

[99]There is no neat or precise answer to all of these points. As Dr Whyte submitted, there are points going in each direction. Overall, however, my sense is that Dr Whyte’s summary which I quoted above has force.[100]If Mara’s proposal had been for a 10.61% deduction of its costs on EP801, I would have felt the deduction was too small, because I would have considered it right to make some deduction from Mara’s costs for the enzymatic disruption/lysis point which was pleaded in the original defence. Dr Kyle then appears to have searched for theories which might support it but they turned out to be baseless. I do not have the detail to enable me to estimate those costs and a broad brush is required. More generally, it is also right to make a deduction to reflect more generally the unsatisfactory aspects of Dr Kyle’s evidence. Fortunately they did not need to take up much time at trial, but I keep in mind that DSM had to analyse and respond to his lengthy evidence.[101]In all the circumstances, I am minded to accept the 10.61% deduction from Mara’s total costs, as proposed by Mara. It is a substantial deduction from their costs and appears to me sufficiently to acknowledge the problems with Dr Kyle’s evidence, as well as certain other aspects of the EP801 infringement issues.

Standing back

[102]I now stand back and assess the overall result. As I have indicated, I consider the fair way to deal with the costs going each way is to use the costs incurred by Mara. Therefore: i) On EP155, DSM were successful and are entitled to costs representing both infringement and validity. Although DSM’s estimated costs are £1.366m odd, DSM are entitled to a figure equivalent to Mara’s costs i.e. £1,001,064. ii) On EP740, Mara were wholly successful, and their costs of EP740 are estimated at £1,077,761. iii) On EP801, Mara succeeded on the construction issues (pH 8 and the order of steps arguments in particular), leading to success on validity over Kobzeff. Mara will recover their costs on EP801 subject to a deduction of 10.61% of Mara’s total costs, yielding a total of £723,832. iv) Adding ii) and iii) together and deducting i) yields £800,530 (after rounding). This amounts to a recovery by Mara of 25.4% of their costs. v) Standing back this result feels correct, in the sense that if one assumes there are three patents in issue and roughly the same proportion of costs is incurred on each, the successful party loses on one of them, then overall costs can be divided into 4, where success adds 25% and a loss deducts 25%.[103]Overall, therefore, the order for costs is that DSM must pay 25.4% of Mara’s costs of the liability trial, to be assessed on the standard basis, if not agreed.

Interim Payment

[104]It was common ground that the interim payment should be ~65% of the total estimated costs which the paying party had to pay. On that basis, DSM must pay to Mara the sum of £520,000 by way of interim payment on account of costs. When drawing up the Order, the parties can hopefully agree the time for payment.

Island Records disclosure

[105]In the composite draft Order, paragraph 12 (which extended over a full page) set out that it was agreed that Mara would give substantial information by way of Island Records disclosure. There were two points in dispute.[106]Before turning to the arguments, I was reminded that the purpose of such disclosure is to enable the successful claimant to make a suitably informed election between pursuing an inquiry as to damages or an account of the defendant’s profits. A sophisticated or lengthy exercise is not required. The purpose is not to provide the full disclosure which would be required to pursue either an inquiry or an account.[107]These points emerge very clearly from the judgment of Birss LJ in Lufthansa v Panasonic [2023] EWCA Civ 1273 at [26]-[27]. ‘26. … The approach of making an Island Records order at the conclusion of a trial concluded in the claimant’s favour is not provided for in any rule or practice direction but it is well established in intellectual property cases. In Island Records itself (a copyright case) Lightman J. reasoned that a party should not be required to elect between an enquiry as to damages or an account of profits unless and until they were able to make an informed choice, which could be done after being able to consider “readily available information” relating to the likely entitlement under each remedy. This could be provided by disclosure or some other alternative satisfactory means such as a witness statement. The order should be made even though the information was likely also to be required on the taking of the enquiry or account. The information did not have to be exact and should not be the product of an overly lengthy or sophisticated exercise. Picking up this theme, in Brugger v. MedicAid [1996] FSR 362 Jacob J rejected the “extreme view” that all necessary information for the account or enquiry should be given, emphasising that all that was needed was enough information to make an informed election. That would only require approximate estimates, particularly of costings, as long as they are explained. In Brugger therefore, as Panasonic submitted, Jacob J was expressly disavowing the notion that an Island Records order amounted to a form of pre-action disclosure on the account or enquiry. Similar statements in other cases at the High Court level can be found in Vestergaard v Bestnet [2009] EWHC 2662 (Ch) at paragraph 16 (Lewison J), and in Comic Enterprise v Twentieth Century Fox [2014] ETMR 51 at paragraph 48 (Roger Wyand QC). 27. In other words, Island Records orders have to be seen in the light of their purpose, which is only to facilitate the claimant’s election between two forms of remedy. To achieve this result two factors are relevant. First the information has to be something which can be produced fairly quickly and at proportionate cost because the election is made at the start. The process cannot advance much until the election is made. Second the information has to be sufficiently reliable for the purpose of making the choice but that is all. More detailed disclosure and analysis will follow. Approximate estimates are to be encouraged.’[108]Before I move to discuss the two points in issue, it is relevant to outline the information already provided in the evidence for this hearing and what Mara have already agreed to provide.[109]The sales revenues of both AO3 and MRC along with the cost of goods were set out in a Confidential Annex to Bacon 4, for each year from 2017 to expiry of EP155 in May 2023, along with any commission payable, operating expenses and the resulting operating profit/loss. Overall both sets of figures indicate a loss was made by each company.[110]By way of the Island Records disclosure, Mara had already agreed to provide various categories of information about the sales of infringing oils including: i) The sums received by AO3 and MRC (and any associated entity where this is known to MRC) respectively in respect of any sale or disposal, provided on a consolidated annual basis. ii) The total volumes of crude and refined oils sold by AO3 or MRC (and/or any associated entity) to third parties. iii) The estimated additional total costs of goods to MRC in respect of crude microbial oil purchased from AO3 over and above those paid to AO3 in each year.[111]Mr Abrahams KC prefaced his justification for seeking additional disclosure with a point about an inconsistency between the figures presented in the Confidential Annex to Bacon 4, and the filed statutory accounts of AO3. The figures in the Annex support evidence given in Bacon 4 that all or nearly all of the infringing oil manufactured by AO3 was sold to Mara, yet these levels of intra-group sales are not reported in the statutory accounts of AO3. This issue came to light at a very late stage and the attempts by Mara and Bristows to investigate this are hampered somewhat by AO3 being put into administration very recently. Having discussed this point with Mr John Bogert, the Chief Financial Officer of MRC and, until recently, a director of AO3, in Bacon 5 Dr Bacon confirmed his previous evidence that the vast majority of all the infringing oils were sold by AO3 to MRC for onward sale. Those gentlemen concluded that the statutory accounts of AO3 must be wrong, but Mr Bogert will look into this and the reason for the discrepancy in due course.[112]It seemed to me that this point and the alleged uncertainty went nowhere and certainly provided no justification for the additional disclosure sought by DSM.[113]The first point in issue was that DSM wanted disclosure of the identities of all of the customers for all of the oils in issue sold by either of the Defendants.[114]Mr Abrahams KC sought to justify this on the basis that the information was essential so that DSM could work out the sales which they had lost to Mara. Curiously he said he had not come prepared to argue this point, but nevertheless pointed to some of the arguments raised in Dr Bacon’s evidence as to why DSM’s estimates of their damages (which DSM said were relevant to the first issue as to who was the winner) were greatly exaggerated. His point was that if some of these arguments were correct, they would bring down the likely damages significantly, particularly where DSM could not prove actual lost sales and would have to claim a reasonable royalty.[115]The second point in issue was whether Mara should be required to disclose the costs of any associated entity involved in the sale of the oils in issue, where those costs were known to Mara. Mr Abrahams KC’s arguments on this point were weak. He framed it as a question of transparency, suggesting that costs incurred by other group members are part of the picture, which DSM need to know to be able to understand what has gone on.[116]For Mara, Dr Whyte emphasised the purpose of Island Records disclosure and submitted the Court needed to be cautious where disclosure was sought by a competitor of highly confidential commercial information.[117]On the first point in issue, Dr Whyte submitted: i) First, in view of what had already been put in evidence for this hearing, it was inconceivable that DSM would elect for an account of profits, not least because the figures in the Confidential Annex to Bacon 4 showed both defendants incurring a substantial loss overall. ii) Second, he rejected the notion that DSM required the identities of customers, for three reasons. a) First, he pointed out that it was agreed that Mara would disclose the sums received for the oils in question, on a consolidated annualised basis. DSM would not receive disclosure of each sale to individual customers, so DSM would not be able to work out the sales made to individual customers (which was supposedly why DSM required the identity of customers, so they could work out the damage suffered per customer). b) Second, he submitted that even if one assumes DSM could link sales to customers, they still do not need this information to make their election because, for the purposes of this hearing, DSM had been able to estimate the proportion of sales which they would have secured, but for the infringements, on the basis of their market share. Whilst Dr Whyte disagreed with their estimates, his point was that DSM were able to make estimates for the purpose of their election. c) His third reason was that the identity of the customers was highly confidential information which would be of great value to a competitor such as DSM. Of course, confidentiality clubs are the solution where this type of information is required to be disclosed and it may well be that this type of information does have to be disclosed if DSM elect for an inquiry, but the issue is whether it is required to enable an informed election by DSM.[118]On the second point in issue, Dr Whyte submitted that no claim for infringement had been brought against any (downstream) associated entity and DSM is not entitled to relief against any such party or parties. He argued that DSM is not entitled to what would amount to pre-action disclosure against any such parties to see if it is worth DSM suing them.

Decision

[119]On the first point in issue, as far as I could detect, none of Mr Abrahams KC’s submissions provided a reason for this additional disclosure on an Island Records basis. The information in question may well be required in due course if DSM elect for an inquiry as to damages, because they will need to work out which actual sales made by the defendants were sales lost to DSM, but I was unable to understand why it is necessary for an informed election to take place.[120]On the second point, as I indicated above, the arguments were weak.[121]Overall I came to the clear conclusion that I should not order any Island Records disclosure beyond that agreed to by Mara. Along with the evidence on this application, I am sure that DSM will have more than enough information to make an informed election. Indeed, there was considerable force in Dr Whyte’s submission that it is inconceivable that DSM will elect for an account of profits.

Permission to appeal

[122]DSM sought permission to appeal the revocation of EP801. They suggest that there are three issues of construction which would be properly arguable on appeal, namely: i) First, that claim 1A should be construed as excluding any process in which organic solvent is present at 5% or more by weight of lipid at any stage of the process. This argument suffers from two problems. The first is that the word ‘lipid’ in the claim clearly means the end result of the claimed process. However, even if I assume to the contrary and ‘lipid’ means whatever lipid is present at any stage of the process, it introduces a constantly changing limit on the organic solvent, as the weight of lipid increases as the process continues. There is no teaching in EP801 to support that. ii) Second, that step (b) occurs after step (a), such that the cell composition is already lysed when step (b) occurs. DSM acknowledge that ‘the Court considered that there was a more practical way to read the claim’ but suggest their construction remains arguable. It strikes me that DSM’s argument is a lawyer’s one and divorced from the approach of the practical notional skilled person. iii) Third, DSM suggest that pH 8 or above in claim 1A ‘should be read in accordance with the standard scientific convention, of treating numbers as being precise to the number of decimal points used’. This is another lawyer’s argument, which presumes in its favour that there is such a convention applicable in every technical field and circumstance. I do not believe there is, for the reasons I explained in my Main Judgment.[123]In addition, DSM raised a point about [878] of my Main Judgment, where I stated ‘I accept Mara’s submissions as recorded in [855]-[868] above.’ DSM were concerned about [864] where I recorded Mara’s submission that ‘Mr Dueppen agreed that it would be obvious to use salt and/or heat, without any polar organic solvent.’ DSM argued that I did not intend to uphold the argument recorded in [864], alternatively that I should give permission to appeal because there was no evidence to support such a finding. DSM contended this would not be a challenge to an evaluative finding but a contention that there was no evidence on the point at all.[124]Faced with this argument, I reviewed carefully this section of the Main Judgment, and in particular the transcript references relied upon by Mara and recorded in [864] and [865]. As indicated in [851], I was dealing with other arguments, assuming I was wrong on any of the construction issues or on the disclosure of Kobzeff. The transcript reference in [864] appears to me to be correct (and it would be possible to go onto T2/ 298/10). I consider this was an evaluative conclusion having heard Mr Dueppen giving his evidence. Having considered DSM’s arguments, I meant what I said in [878].[125]The net result is that even if DSM succeeded on their three construction points, that would not be enough to alter the result on the validity of EP801. On that basis, I refused permission to appeal.[126]Mara sought permission to appeal on the validity of EP155, suggesting my rejection of their obviousness case was wrong. Mara’s draft Grounds of Appeal criticised each of the four reasons I set out at [311]-[314], but those paragraphs need to be read in the context of the earlier discussion at [278, second sentence]-[284]. However the principal point which caused me to give permission was the reference at 5(v) to the evidence of Dr Wynn at [T4/476/3-477/17]. I cited evidence from Mr Dueppen but not this passage from Dr Wynn. On reflection, it would have been better if Mara had drawn my attention to this on receipt of the draft Judgment, but that did not happen.

Permission to apply

[127]DSM asked for permission to apply for a dissemination order, suggesting that they needed more time to investigate whether Mara were misrepresenting the outcome of the Trial. There was no evidence before me as to what might have happened. Nonetheless I considered it would be fair to provide a further short period (until 31 July 2025) in which DSM can come back to me to make an application for a dissemination order. If such an application is made, it will be decided on its merits. However the fact I have extended time should not be taken as any indication or acceptance by me that Mara have done anything wrong. Outstanding

COSTS

[128]Each side filed a schedule of costs for this hearing. These schedules revealed surprisingly large totals: for DSM, £217k odd and for Mara, £288k odd.[129]At first sight it appeared that these two parties had managed to incur over £0.5m of costs for this FOO hearing. DSM’s schedule appeared on its face to be the costs incurred by DSM for this hearing. Mara’s schedule included all the work done since the end of the trial and so included work done on transcript corrections as well as all the work done for this hearing.[130]The two sides put forward various suggestions as to how to deal with these outstanding costs.[131]In view of the very substantial costs incurred, I consider the fair way to deal with these costs is that they should largely reflect the outcome of this hearing. In that regard, DSM’s arguments that they were the overall winner gave rise to significant costs, as did DSM’s arguments as set out in their Skeleton Argument on deductions.[132]It appears that DSM correctly anticipated they might lose on that first question, which meant that Ms Nezami was well prepared with a set of submissions as to what deductions should be made from Mara’s costs on the assumption that they were the overall winner. These, of course, depended on the same criticisms of Mara’s conduct which I have already addressed. In large part, I have not accepted those criticisms. Furthermore, I have accepted that Mara’s analysis of the appropriate deductions was fair.[133]On the Island Records disclosure, I have ruled against DSM.[134]I have granted permission to appeal to Mara and refused permission to DSM.[135]Overall, I remind myself that some of the evidence filed by DSM was necessary to enable me to reach a fair result on costs. Furthermore, it is clear that some costs in Mara’s schedule are general costs of the action (i.e. transcript review and corrections).[136]Taking account of all the circumstances, I consider the fair order on these outstanding costs is that DSM must pay 90% of Mara’s outstanding costs.[137]The next issue is what, if any, orders I should make in relation to those costs. The same point applies to the outstanding costs orders made in favour of DSM. DSM say those outstanding costs orders amount to £228k. In view of DSM’s higher hourly rates and higher hours spent, there is a strong argument that that total would be assessed downwards by a significant percentage, such that even an 80% recovery on assessment would be very ambitious.[138]In view of the substantial sums involved, I make clear that I am not making any summary assessment of the outstanding costs on either side, but it does seem appropriate to make some assessment of what additional interim payment should be made.[139]Overall, it appears to me that the sum which Mara would be likely to recover on any assessment of these outstanding costs would be greater than the sum which DSM would recover on an assessment of the outstanding costs orders in their favour. Applying a (very) broad brush, my estimate would be that, on balance, Mara’s net recovery would be £60k (288*0.9*0.8 – 228*0.65). I propose therefore to add £60k to the interim payment which DSM must make to Mara.[140]So, to be clear, the interim payment of £580k is on account of the following orders as to costs: i) The orders in DSM’s favour regarding(a) the Licence Defence;(b) Dennis 1 and(c) CL020. ii) The order that DSM must pay 25.4% of Mara’s costs of the liability trial. iii) The order that DSM pay 90% of Mara’s outstanding costs since the liability trial.[141]The final point I make about these outstanding costs is a practical suggestion, which I mentioned in the hearing. For this FOO hearing, I got the impression that a lot of hours and costs were expended in analysing the work done during this litigation in an attempt to allocate the time and work to each patent. I don’t know if this was done or not, but it would be better and far more cost-effective in actions involving more than one patent, to ensure that time is allocated between patents at the time the work is done rather than after the event.[142]I ask Counsel to seek to agree an Order giving effect to this Judgment. In accordance with my stand-over Order dated 20 March 2025, the time for filing any Appeal or application for permission to appeal runs from the date of this Judgment.

Cited in 1 later judgment