Judge cuts ‘disproportionate’ £1.7m costs claim by Roche
Roche has drawn criticism from an English High Court judge over its ‘disproportionate” demand for nearly £1.7m ($2.3m) in costs, after it won a patent dispute with medical device company Insulet over a tubeless insulin pump.
Judge Pat Treacey handed down the decision on July 22, 2021, which addressed issues resulting from the main judgment handed down on July 9.
The ruling concerned the costs involved and permission to appeal, along with some additional points relating to time for payment and interest.
Roche claimed costs totalling £1.67 million ($2.3m), comprising around £1.2 million of solicitors fees and around £420,000 of disbursements (including counsel and experts).
Insulet disputed the overall proportionality of Roche's costs, referring to the short trial length and the limited technical complexity of the litigation.
US partners billed at £1k per hour
Insulet also claimed that the number and seniority of the lawyers involved in the proceedings was excessive and that excessive time was devoted by Roche's solicitors to various phases of the litigation, while noting that it was difficult to work out from the costs schedule supplied by Roche who had done what at each phase.
Insulet referred to its own costs (in the region of between £1.1 million and £1.2 million) as a more appropriate indicator of what might be expected. The device maker suggested that an appropriate assessment on a summary basis would be 50% of claimed costs.
Roche defended its claimed costs on the basis that it was facing the risk of an injunction. It contended that the effect of any injunction would have resulted in reputational damage to Roche's relationship with the NHS as a supplier of insulin pumps.
Roche also countered that costs of this level are normal for a patent action of this type and cautioned the court against having regard to Insulet's costs as an indication of proportionate costs because Roche had “more at stake”.
The pharma company argued that the appropriate level at which to assess its costs would be 80% of claimed costs after deductions.
The judge, however, found that the particular circumstances of this case did not justify costs of this size.
She said that while an injunction may have been a possibility, it is also an immediate long-lasting probability in the majority of patent cases. “Even accepting that the effects of the injunction would last for longer than the potential six-eight week lifetime of the patent, I do not accept that it renders the costs claimed proportionate,” she explained.
She noted that the lowest hourly rate claimed for any of the legal advisers instructed by Roche was £255 for one paralegal, while the only UK associate involved in the matter had an hourly rate of £548. The rates of the two UK partners involved were in excess of £800, with that of one of the US partners who worked on the matter exceeding £1,000.
She subsequently concluded that it was not proportionate to claim costs of around £1.7 million for a three day trial of this nature, as the action took less than 10 months from the date on which particulars of claim were served until the end of trial.
Judge Treacey also found that the substantive action involved no fact evidence other than 20 pages of text, with many of those being largely occupied by diagrams, many of which were reproduced from the product manual.
She said: “While Roche doubtless undertook additional prior art searches, and may have wished to leave no stone unturned, this does not make the costs of turning over those stones proportionate so that they are recoverable by way of an adverse costs award.”
Roche: ‘600 hours spent on expert evidence’
Roche held that there were a large number of matters for the experts to address and that its costs were not unreasonable. But the court noted that the total length of all expert reports was less than 170 pages, the written evidence of Roche's expert was under 100 pages in total, and the exhibits were not “voluminous”.
The time spent by Roche's solicitors on this phase was over 600 hours of qualified solicitor time (of which over 260 hours was partner time), plus a further 48 hours of paralegal time.
Judge Treacey surmised: While I recognise that there is no direct correlation between the time involved preparing a document and its length, nor between the difficulty and complexity of the issues involved and the length of an expert report, I do not regard that amount of time, and concomitant claimed costs of in excess of £400,000, to be proportionate in preparing the expert evidence in this case.
She concluded that many aspects of Roche's claimed costs were not proportionate and that Insulet should pay Roche 55% of its claimed costs. Judge Treacey also held that Insulet's costs should be summarily assessed as 90% of £52,389 and Roche should pay 50% of that sum.
Appeal denied
The court denied Insulet’s permission to appeal, holding that to have real prospects of success at the court of appeal, the claimant would need to succeed in respect of both infringement and validity.
“I do not consider that Insulet has a real prospect of success in overturning the non-infringement finding, either on a normal approach or under the doctrine of equivalents. The claimant's draft grounds do not persuade me that it has realistic prospects of succeeding at the court of appeal on the issues of validity either.”
She concluded that if Insulet wishes to appeal on the grounds set out in its draft grounds, or any other grounds, it must approach the Court of Appeal for permission to do so. Insulet was represented by Andrew Waugh QC and Jaani Riordan, who were instructed by law firm Simmons & Simmons.
Michael Tappin QC and James Whyte appeared for Roche and were instructed by WilmerHale.
