Four Tips from Merck’s $180M Patent Damages Win Against Apotex

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It is said that the wheels of justice turn slowly, but grind exceedingly fine.  That phrase could certainly apply to Merck’s recent win over Apotex in a damages trial for patent infringement in Canada, in a case that started in 1997.

The liability decision finding Apotex guilty of infringement was released in December 2010.  To view the Lexpert write-up of the liability decision click here.  It took another two years before we arrived at the damages trial.  It commenced on April 8, 2013 in Toronto.  On July 16, 2013, the public damages judgment was released.  Merck was awarded damages and interest totalling more than $180 million.  To view the Lexology write-up of the damages decision click here.

In Canadian patent litigation, bifurcation of liability and damages is common.  It can take a long time to get to trial.  It can take even longer before damages are tried.  People move on.  Documents and processes are forgotten.  A plaintiff claiming damages based on lost profits must establish what they would have been.  That involves proof of lost sales, revenues and costs, as well as the intention, resources and capacity to make them.

Here are four tips meant for plaintiff’s counsel (whether outside or in-house) in developing their patent damages cases, which stem from our experience in this case.

  1. Identify damages documents at the outset:  In patent infringement cases, the parties (and the Court) tend to focus on infringement and validity.  The general view is that resources spent on developing the damages case are wasted if the patent is not infringed or valid.  Resist the temptation to leave damages documents for another day.  Gathering them early will help ensure a well-supported and speedy damages trial.
  2. Work with accounting experts early:  Litigators can benefit tremendously from enlisting the support of accounting experts early in the case.  With counsel’s guidance, they can help identify key documents and deficiencies that may become problematic issues.  Also, they can be a useful resource in planning an effective damages discovery and in avoiding going off on a frolic.
  3. Establish a relationship with your fact witnesses:  Damages documents need to be proved through fact witnesses.  Identify personnel familiar with the physical and financial supply chain at the outset of the case.  Get them involved in the litigation.  They will prove to be invaluable in gathering relevant documents, assisting your experts, and representing the organization.
  4. Streamline where possible:  No one appreciates time wasted on unimportant technical or procedural side-issues.  By the time trial commences, the parties will know which financial records are important, and where the shoe pinches.  Consider an agreement dispensing with the need for formal proof of key financial records.  Where there are other ways to gain efficiencies, get the Court involved.

patent; intellectual property; patent litigation



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