H Lundbeck A/S v Sandoz Pty Ltd (No 2) [2019] FCA 46

H Lundbeck A/S v Sandoz Pty Ltd (No 2) [2019] FCA 46

The 25% discount was maintained because Lundbeck had proved infringement only by Sandoz and had not proved infringement by the other generic suppliers whose escitalopram products were available and substitutable. A material proportion of Sandoz's sales would have been sales of those other generics rather than Lundbeck products, so that loss was not proved to be Lundbeck's loss caused by Sandoz's infringement. The appropriate approach was to calculate hypothetical lost profits and apply a one-off 30% deduction, comprising the 25% discount for substitutable generic sales and a 5% discount for other risks.

Jurisdiction
Australia
Judgment Date
29 January 2019
Procedural Posture
Patent Infringement Damages Assessment / Further Determination on Outstanding Discount Issue After Principal Reasons; Decided on the Papers
Outcome
The Court confirmed that the 25% discount and overall 30% discount should be applied and directed the parties to file final orders.
Legal Topics
['patent Infringement Damages' 'lost Profits' 'discount for Substitutable Generic Products' 'assessment of Damages by Estimation' 'pharmaceutical Patents']
['intellectual Property' 'patents' 'damages'] ['patent Infringement Damages' 'lost Profits' 'discount for Substitutable Generic Products' 'assessment of Damages by Estimation' 'pharmaceutical Patents']

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Procedural Posture

Patent Infringement Damages Assessment / Further Determination on Outstanding Discount Issue After Principal Reasons; Decided on the Papers

Legal Issues

  1. 1 ["Whether a 25% discount should be applied to Lundbeck's damages to account for the probability that some Sandoz escitalopram sales would otherwise have been sales of other generic escitalopram products rather than Lundbeck products." 'Whether the 25% discount involved an error of principle because other generic sales should be treated as infringing sales causing loss to Lundbeck.' 'Whether the 25% discount should be applied to sales volumes or as part of a one-off overall discount to quantified lost profits.']

Ratio Decidendi

The 25% discount was maintained because Lundbeck had proved infringement only by Sandoz and had not proved infringement by the other generic suppliers whose escitalopram products were available and substitutable. A material proportion of Sandoz's sales would have been sales of those other generics rather than Lundbeck products, so that loss was not proved to be Lundbeck's loss caused by Sandoz's infringement. The appropriate approach was to calculate hypothetical lost profits and apply a one-off 30% deduction, comprising the 25% discount for substitutable generic sales and a 5% discount for other risks.

Court Disposition

The Court confirmed that the 25% discount and overall 30% discount should be applied and directed the parties to file final orders.

Orders

  • ['NSD 647 of 2014: The parties confer and file agreed or competing proposed orders finalising the matter, including as to costs, within 14 days of the date of these orders.' 'NSD 824 of 2016: The parties confer and file agreed or competing proposed orders finalising the matter, including as to costs, within 14 days...