Largest damages award on cross-undertaking upheld on appeal

June 2015

In AstraZeneca AB ("AZ") & Anor v KRKA dd Novo Mesto & Consilient Health Ltd (the "Defendants") [2015] EWCA Civ 484, the Court of Appeal has upheld the order of Sales J (as he then was) awarding a sum in excess of £27 million on an inquiry as to the damages suffered as a result of a preliminary injunction. The judgment states that this is thought to be the largest award ever made by the Patents Court upon an inquiry of this kind.


The preliminary injunction in question had been ordered against the Defendants in 2010 preventing them from marketing their own esomeprazol proton pump inhibitor ("PPI") product, in capsule form (called Emozul). The injunction was obtained on the basis of the patent protecting AZ's esomaprazole PPI product, in tablet form (called Nexium). However, AZ later lost a related infringement action against Ranbaxy on this patent and subsequently the injunction was discharged. The result was that Emozul was kept off the market from October 2010 to September 2011, losing the "first mover" advantage.

ticked off billThe context of the damages assessment was that a GP who considered it appropriate to prescribe esomeprazole would normally do so by generating a prescription for esomeprazole tablets rather than Nexium. Hence, the Defendants would have to persuade GPs in the relevant areas to change their prescribing practices to esomeprazole capsules, a role which is the responsibility of the Medicine Managers of the relevant health authority. The Medicine Manager provides guidance and assistance to GPs to encourage them to prescribe the cheapest types of relevant drugs to their patients and so minimise the overall drugs bill for the NHS each year.

In assessing damages, the judge had placed reliance on, amongst other matters, evidence brought by the Defendants from 12 Medicine Managers about the efforts made and the challenges faced when recommending the change from Nexium to Emozul. By contrast, the judge had been dismissive of expert evidence adduced by AZ which backdated to 2010 how the market had actually behaved when Emozul was finally launched in 2011. At the later date there were a number of generic entrants and so the calculation was adjusted to allow for the loss of first mover advantage. AZ had also sought unsuccessfully to make comparisons with examples of the entry of other drugs in similar situations.

The Appeal decision

In rejecting the appeal against the approach taken by Sales J, the Court of Appeal states that whilst it is for the defendant to establish its loss with relevant evidence, the court should not be over eager in its scrutiny of that evidence or too ready to subject the Defendants' methodology to minute criticism. The Court adds that the principle of "liberal assessment" adopted in patent infringement cases is equally applicable to recovery under a cross-undertaking.

The Court of Appeal held that the judge was entitled to conclude that Emozul would have achieved a market share of 80% one year after launch, subject to an uncertainty discount of 20%. In so doing, the Court was satisfied that the judge had taken into account both the time it would have taken PCTs to decide to promote switching and the time it would have taken to secure compliance with those decisions, on the basis of the Medicine Managers' evidence and other factors.

If you have any questions on this article or would like to propose a subject to be addressed by Synapse please contact us.

pile of money

Paul England

Paul is a senior associate and professional support lawyer in the Patents group based in our London office.

"...the Court of Appeal states that whilst it is for the defendant to establish its loss with relevant evidence, the court should not be over eager in its scrutiny of that evidence."