Novartis told to pay 75% of defendants’ costs in Exelon case

The English High Court has ordered Novartis to pay 75% of the defendants’ legal costs in a patent infringement case against Focus Pharmaceuticals, Actavis and Teva.

The damages, awarded on Thursday (June 4), relate to a judgment by the court last month that centred on Novartis’ Exelon (rivastigmine) patch, used to treat Alzheimer’s disease.

Judge Richard Arnold had previously ruled that Novartis’s European patent covering the transdermal patch was invalid.

Novartis had accused the generic companies of infringing the Exelon patent with their own versions of the patch.

While Arnold said there was no dispute that the defendants’ patches were generic versions of Exelon, he concluded that Novartis’s patent was invalid for lack of inventive step.

Awarding damages on Thursday, Arnold said that the defendants are entitled to costs but that deductions should be made based on issues where the companies were unsuccessful in the case.

Novartis had argued that the defendants should recover only 61% of their costs, because they were unsuccessful with claims including one relating to construction, prior art, validity over an international patent application, insufficiency, priority and infringement.

Focus, Actavis and Teva argued that they are entitled to at least 90% of their costs.

Novartis said that as the defendants did not persuade the court to adopt their preferred construction, it should not have to pay those related costs.

But the defendants argued that there were two possible constructions of the disputed claim, and that they were both recognised in European jurisdictions.

“More importantly, they point out that, although their preferred construction would have led to non-infringement, the alternative construction led to the finding of added matter. Thus they contend that Novartis cannot really be said to have won on this issue,” Arnold added.

He said that as the defendants raised an issue of construction that was unsuccessful, Novartis is right to say that they shouldn’t recover those costs, but he agreed with the defendants that only additional costs of advancing their preferred construction in the case should be deducted.

Arnold also determined costs to be paid on the issues of novelty, validity, insufficiency, priority, infringement, ultimately ruling that Novartis should pay a total of 75% of the defendants’ costs.

Teva told LSIPR that it welcomes the judgment: “We launched rivastigmine patches in the UK in June 2013 in the belief that the patent preventing us from doing so was invalid, and we are pleased that the court has confirmed our view. The decision means that our rivastigmine patch product remains available in the UK, offering choice in one of the biggest pharmaceutical markets in the world.”

Focus and Actavis declined to comment.

Novartis had not responded to LSIPR’s request for comment at the time of publication.