Sandoz AG & Ors v Bayer Intellectual Property GmbH & Ors [2025] EWHC 2533 (Pat)

[2025] EWHC 2533 (Pat)Case No HP-2022-000029
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
INTELLECTUAL PROPERTY LIST (ChD)
PATENTS COURT
Venue Rolls Building, Fetter LaneDate 7 October 2025
London EC4A 1NL
Before
MICHAEL TAPPIN KC(sitting as a Deputy Judge of the High Court)
Between
SANDOZ AGInquiry ClaimantsSANDOZ LIMITEDClaimantHEXAL AGClaimantSALUTAS PHARMA GMBHClaimant
Jeffrey Chapman KC and Gillian Hughes (instructed by Pinsent Masons LLP) for SandozMiles Copeland and Kyra Nezami (instructed by Allen Overy Shearman Sterling LLP) for BayerHearing Hearing date: 1 October 2025
Approved JudgmentI 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:

[1]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.[2]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.[3]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]).”
[4]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.[5]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.[6]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.[7]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.[8]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.[9]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].[10]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.[11]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.[12]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.”
[13]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 easyto 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 197at 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 incomplete picture, he is to be treated as if he had made a promise not to prevent that which the injunction in fact prevents. There should as a matter of principle be a degree of symmetry between the process by which he obtained his relief (an approximate answer involving a limited consideration of the detailed merits) and that by which he compensates the subject of the injunction for having done so without legal right (especially where, as here, the paying party has declined to provide the fullest details of the sales and profits which it made during the period for which the injunction was in force).” “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.”[14]The passage from Fiona Trust v Privalov to which Bayer refers is as follows:
“50. The principle of “liberal assessment” was applied to an inquiry as to the damages caused by an interim injunction by Norris J in Les Laboratoires Servier v Apotex Inc [2008] EWHC 2347 (Ch), [2009] FSR 3. This was endorsed by the Court of Appeal in AstraZeneca AB v KRKA dd Novo Mesto [2015] EWCA Civ 484 at [16]. The question arose in the context of a statement by Norris J, also endorsed by the Court of Appeal, that although it is for the party seeking damages to establish its loss, the court should not be over eager in its scrutiny of the evidence or too ready to subject its methodology to minute criticism, in part because the very nature of the exercise renders precision impossible. Kitchin LJ referred at [16] to the need for “a liberal but fair assessment of loss". 51. These were not freezing order cases and part of Norris J’s reasoning is inapplicable to such cases. Nevertheless I consider that a liberal assessment of the defendants’ damages should be adopted, provided that it is clear what this means. It does not mean that a defendant should be treated generously in the sense of being awarded damages which it has not suffered. It does mean, however, that the court must recognise that the assessment of damages suffered as a result of a freezing order will often be inherently imprecise, for example because the defendant cannot say precisely what it would have done with its funds but for the freezing order; that this problem has been created by the claimant’s obtaining of an injunction to which it was not entitled; that in the light of these factors the kind of over eager scrutiny of a defendant’s evidence and minute criticism of its methodology to which Norris J referred will not be appropriate; and that it is not an answer for a claimant to say that damages cannot be awarded because the defendant’s business venture was to some extent speculative and might have resulted in a loss. Thus the defendant is not absolved from proving its damages, but these factors must be borne in mind in determining whether it has succeeded in doing so.”
[15]The passage in Morris-Garner v One Step to which Sandoz refers in its pleadings is as follows:
“Evidential difficulties in establishing the measure of loss are reflected in the degree of certainty with which the law requires damages to be proved. As is stated in Chitty, para 26-015, “[w]here it is clear that the claimant has suffered substantial loss, but the evidence does not enable it to be precisely quantified, the court will assess damages as best it can on the available evidence”
. In so far as the defendant may have destroyed or wrongfully prevented or impeded the claimant from adducing relevant evidence, the court can make presumptions in favour of the claimant. The point is illustrated by the case of Armory v Delamirie (1721) 1 Str 505, where a chimney sweep’s boy found a jewel and took it to the defendant’s shop to find out what it was. The defendant returned only the empty socket, and was held liable to pay damages to the boy. Experts gave evidence about the value of the jewel which the socket could have accommodated, and Pratt CJ directed the jury “that, unless the defendant did produce the jewel, and shew it not to be of the finest water, they should presume the strongest against him, and make the value of the best jewels the measure of their damages: which they accordingly did”.”[16]Sandoz referred to various other cases in which such a principle had been considered and applied. In Browning v Brachers [2005] EWCA Civ 753 at [210] Jonathan Parker LJ referred to the principle in Armory v Delamirie as raising “an evidential (i.e. rebuttable) presumption in favour of the claimant which gives him the benefit of any relevant doubt. The practical effect of that is to give the claimant a fair wind in establishing the value of what he has lost.” Similarly, in Keefe v The Isle of Man Steam Packet Company [2010] EWCA Civ 683 at [19] Longmore LJ said that “a defendant who has, in breach of duty, made it difficult or impossible for a claimant to adduce relevant evidence must run the risk of adverse factual findings” and “[i]n such circumstances the court should judge a claimant’s evidence benevolently and the defendant’s evidence critically.”[17]In Fearns v Anglo-Dutch Paint & Chemical [2010] EWHC 1708 George Leggatt QC (as he then was) had to make an assessment of lost profits which involved a large amount of conjecture, the need for which had arisen as a result of the defendant’s conduct. He said (at [70]) that in such cases the principle in Armory v Delamirie applied, which “requires the Court to resolve uncertainties by making assumptions generous to the claimant where it is the defendant’s wrongdoing which has created those uncertainties.” In Yam Seng v International Trade Corporation [2013] 1 Lloyd’s Rep 526 at [188] Leggatt J (as he then was) echoed what he said in Fearns, saying that “it is fair to resolve uncertainties about what would have happened but for the defendant’s wrongdoing by making reasonable assumptions which err if anything on the side of generosity to the claimant where it is the defendant’s wrongdoing which has created those uncertainties.”[18]In summary, where uncertainties in assessment of damages arise as a result of a defendant’s conduct, the court will deal with such uncertainties by making assumptions or presumptions as to the value of the claimant’s loss which are in favour of the claimant. There was some discussion about whether such a principle was part of liberal assessment or additional to it. However, it is not necessary to decide that, because Bayer (unsurprisingly) did not dispute the existence of the principle that these cases disclose.[19]Bayer did however take issue with Sandoz’s more general proposition that “the degree of certainty with which a claim will be required to be proved will be calibrated according to the “character” of the defendant’s conduct and in light of all the “circumstances” of the case” – at least in so far as Sandoz contended that this meant that “findings as to the specific nature and extent of Bayer’s wrongdoing may affect the approach to be taken to assessing Sandoz’s compensatory claim.”[20]The foundation for Sandoz’s submission was a statement of Bowen LJ in Ratcliffe v Evans [1892] 2 QB 524 at 532-533:
“In all actions accordingly on the case where the damage actually done is the gist of the action, the character of the acts themselves which produce the damage, and the circumstances under which these acts are done, must regulate the degree of certainty and particularity with which the damage done ought to be stated and proved. As much certainty and particularity must be insisted on, both in pleading and proof of damage, as is reasonable, having regard to the circumstances and to the nature of the acts themselves by which the damage is done. To insist upon less would be to relax old and intelligible principles. To insist upon more would be the vainest pedantry.”
[21]However, as Mr Copeland pointed out, that passage needs to be read in context. Ratcliffe v Evans was a claim in malicious falsehood arising out of a publication by a local newspaper of a statement that the claimant had ceased trading. The question was whether in such a claim it was necessary to prove special damage or whether the claim could succeed on proof of general damage. Bowen LJ considered the requirements of various causes of action (libel, oral and written slanders actionable per se, slanders not actionable per se) in terms of the damage which needed to be proved to sustain the claim, and in particular the relationship between the nature of the statement complained of and the circumstances in which it was made and the type of damage that needed to be proved. I do not see that Ratcliffe v Evans has any bearing on the present case, nor that it establishes any relevant principle beyond that of liberal assessment and (if different) the principle to which I have referred in paragraphs 15-18 above.[22]As Sandoz pointed out in its skeleton argument, assessing its loss of profit as a result of the interim injunctions obtained by Bayer will require the court to assess what would have happened in the hypothetical counterfactual where no injunctions were granted. That will involve making findings as to the actions which would have been taken by Sandoz, Bayer and other generic companies (some of which will not be present at the inquiry) in that scenario. Sandoz pointed out that there were various matters in dispute regarding what would have happened in the counterfactual, including:(i) the number of companies that would have launched a generic rivaroxaban product on expiry of the SPC but for the injunctions;(ii) the approach that such companies would have taken to pricing in circumstances where there remained a risk of the Patent being held valid; and(iii) the extent of the reduction in the price for rivaroxaban which would have occurred but for the injunctions.[23]Sandoz submitted that, in accordance with the principles set out in the cases cited above:
“(1) Sandoz’s losses are to be assessed having regard to the fact that it is Bayer’s wrongdoing (in originally obtaining the Patent and subsequently applying for the injunctions) which has caused any evidential uncertainty as to the relevant hypothetical counterfactual against which Sandoz’s damages are to be assessed. (2) Bayer’s wrongdoing will justify the court at trial taking a generous approach to Sandoz’s case. This will include (in so far as necessary) the making of assumptions favourable to Sandoz as to what would have happened but for Bayer’s wrongdoing.”
[24]Sandoz submitted that, therefore, the matters set out in paragraphs 27.1 to 27.9 of its Points of Claim were relevant to the issues arising on Sandoz’s claim for compensation under the cross-undertakings.[25]I do not agree. Any difficulties that arise in determining what would have happened in the counterfactual arise because Bayer held the Patent and was successful in obtaining interim injunctions based on the Patent, which was then held to be invalid. It is those facts which justify the court adopting the liberal assessment approach described in the authorities cited above. Further, in so far as there may be uncertainties which justify making assumptions or presumptions in favour of Sandoz, those uncertainties arise because interim injunctions were granted based on the Patent, which turned out to be invalid. For those purposes it makes no difference what led to Bayer’s success before the EPO, or what Bayer’s state of mind was when seeking the interim injunctions. There is no authority which supports the proposition that if Sandoz were to prove the matters it alleges (summarised in paragraph 5 above) the court would be more liberal in its assessment of Sandoz’s loss, or more willing to make assumptions or presumptions in favour of Sandoz when assessing that loss.[26]In my judgment Bayer is right to say that the fundamental problem with the case sought to be pleaded by Sandoz is that there is no nexus between the matters alleged and the consequences which are alleged to flow from them. Sandoz has not been able to why explain the alleged acts and state of mind of Bayer when obtaining and asserting the Patent lead to any difficulty in assessing the counterfactual, or to any evidential difficulties, over and above the uncertainties that would arise in any event in the absence of the alleged facts.[27]This can be illustrated by taking one of the matters that will be in dispute at the inquiry, namely the number of companies that would have launched a generic rivaroxaban product on expiry of the SPC but for the interim injunctions. There may well be uncertainty about the answer to that question, but that arises because of the difficulty in creating the counterfactual, particularly in circumstances where not all of the companies involved will be present at the inquiry. The existence and extent of that difficulty and uncertainty cannot be affected by the acts and state of mind of Bayer when conducting the opposition proceedings or seeking the interim injunctions.[28]For these reasons, there is no real prospect of Sandoz showing that the matters alleged in paragraphs 27.1-27.9 of its Points of Claim have any bearing on the assessment of its damages recoverable under Bayer’s cross-undertakings. In my judgment the proposed amendment to Sandoz’s Points of Claim does not disclose a case with real prospects of success. The same applies to paragraph 32 of its Points of Reply.[29]Further, if I were to permit the amendment to Sandoz’s Points of Claim (or permit paragraph 32 to remain in its Points of Reply) that would lead to a significant increase in cost and complexity of the inquiry. The parties did not agree as to the scope and cost of the disclosure exercise that would be necessary, nor as to the scope of the evidence that would be likely to be adduced to address them, nor as to the time that would be added to the trial. It is not possible to form a concluded view on such matters on the material before me. However, it is clear that the impact of the allegations, in terms of costs and court resources, would be substantial. I do not need to decide whether that would justify refusing permission to amend the Points of Claim if I thought that there was some real (albeit slight) prospect of Sandoz’s argument succeeding, because I am confident that there is not.[30]In its skeleton argument, Sandoz also submitted that the allegations pleaded in paragraphs 27.1 to 27.9 of the Points of Claim were relevant to the exercise of the court’s discretion as to the costs of the inquiry, as they concerned the conduct of Bayer which would be taken into account under CPR 44.2(4)(a) and 44.4(3)(a)(i). That argument was not pursued orally, rightly so in my judgment. First, that is not what Sandoz’s pleadings assert as being the relevance of the allegations. Further, I am not aware of any case in which allegations requiring disclosure and evidence have been permitted to be made purely because of their potential relevance to costs.[31]It is plain from Dr Morgan’s evidence in support of Sandoz’s application that Sandoz and its advisers feel strongly that Bayer should be subject to some form of sanction for what Sandoz regards as serious wrongdoing on the part of Bayer. In his statement in support of Sandoz’s application Dr Morgan says that “the conduct alleged should, as a matter of policy, be discouraged in the strongest terms if it is proven. Importantly, therefore, Sandoz seeks findings of fact as to Bayer’s conduct and intends to hold it accountable to the fullest extent permissible under the law as it now stands.” Obviously this is not the occasion to express any view about whether there is any merit in Sandoz’s allegations. But even if there were, that does not mean that Sandoz should be allowed to plead its allegations, obtain disclosure relating to them, and test the evidence relating to them, on the inquiry as to damages on Bayer’s cross-undertakings. These matters do not provide a compelling reason why there should be a trial of Sandoz’s allegations in the context of this inquiry.[32]For these reasons I refuse Sandoz permission to amend its Points of Claim to introduce paragraph 32A and accede to Bayer’s application in respect of paragraph 32 of Sandoz’s Points of Reply.