H Lundbeck A/S v Sandoz Pty Ltd (No 2)

The case before the Federal Court of Australia was between H Lundbeck A/S, a pharmaceutical company, and Sandoz Pty Ltd, a generic drug manufacturer. The dispute centred around patent infringement, specifically the infringement of a patent held by H Lundbeck for its antidepressant drug, Cipralex. Sandoz had manufactured and sold a generic version of Cipralex, leading H Lundbeck to seek damages for the infringement. The primary legal issues in the case were the calculation of damages and the appropriate discount to apply to the profits that H Lundbeck claimed it would have made had the infringement not occurred.

The court needed to decide whether a discount should be applied to the hypothetical profits for the generic version of the drug, considering that it was a substitutable product. The Federal Court examined the principles of damages for patent infringement and the precedent set by previous cases. It found that a discount was appropriate but also acknowledged the difficulty in precisely estimating the extent of the discount. The court decided that the discount should be applied as part of the overall discount for the risk inherent in the hypothetical profits calculation. This approach balanced the need to compensate H Lundbeck for the infringement with the inherent uncertainties in estimating future profits.

In conclusion, the Federal Court held that a discount should be applied to the hypothetical profits claimed by H Lundbeck, reflecting the substitutability of the generic product. The court directed the parties to confer and file agreed or competing proposed orders finalising the matter, including as to costs, within 14 days of the date of these orders. The specific amount of the discount and the final orders were to be determined by the parties in consultation.