August 1 Rivaroxaban – Sandoz’ claim for profit disgorgement

Bayer’s Xarelto (rivaroxaban) blood-thinning agent has been the subject of patent disputes in many jurisdictions, including Australia.

The UK aspect has taken an interesting turn. Bayer was initially granted a short period of preliminary injunctive relief in March 2024(PI). As a condition of the grant of the PI Bayer was, in accordance with usual practice, required to give an undertaking as to damages to pay compensation if it were subsequently established that the PI ought not to have been granted.

In April 2024 Bayer’s UK patent for a once daily dosing schedule was held invalid on the ground of obviousness. Bayer sought leave to appeal from the trial judge which was refused but there was an extension of the PI to permit Bayer to seek leave to appeal from the Court of Appeal (CoA). The CoA granted leave to appeal and extended the PI until the delivery of the appeal judgment. In May 2024 the CoA dismissed Bayer’s appeal.

Sandoz has now sought compensation from Bayer for wrongful enforcement not on the usual basis of a claim for damages based on Sandoz’ loss but rather on the basis that Bayer be required to disgorge the profits it made during the period of the PI. This is certainly a novel approach and Bayer has applied to the High Court to strike out Sandoz’ claim. That application was apparently heard last week.

It seems that Sandoz’ alleges that there was serious misconduct by Bayer in prosecuting and subsequently seeking to enforce its once-daily dosing patent and that such misconduct justifies the profit disgorgement relief. Bayer argues that such relief does not lie within the scope of the undertaking it gave.

It will be fascinating to see how this claim for profit disgorgement plays out and what the ramifications are in respect of cross-undertakings as to “ damages “ in future cases – potentially including those in Australia.

We will report on the outcome once a decision is handed down.