The question of whether, or under what circumstances, a patentee who obtains an ex post wrongly issued preliminary injunction—that is, a preliminary injunction temporarily excluding an accused infringer from the market, on the basis of a patent the relevant claims of which are determined, ex post, to be invalid or not infringed—should be obligated to provide monetary relief to the accused infringer (or others) is one that I devote considerable attention to in my forthcoming book, Wrongful Patent Assertion: A Comparative Law and Economics Analysis (Oxford Univ. Press, 2026). The answer to that question differs to some extent among the major jurisdictions for patent litigation. As readers may recall, the CJEU has issued two rather different judgments on this topic in recent years, in Bayer Pharma AG v. Richter Gedeon Vegyészeti Gyár Nyrt, Case C-688/17, ECLI:EU:C:2019:722 (CJEU 2019), and Mylan AB v. Gilead Sciences Finland Oy, Case C-473/22, ECLI:EU:C:2024:8 (CJEU 2024). (For previous discussion on this blog, see, e.g., here.) In the U.S., liability is almost always limited to the amount of the bond the plaintiff is required to post, while in the U.K. and some other common-law jurisdictions courts typically require a party seeking a preliminary injunction to execute a “cross-undertaking,” essentially a legally enforceable promise that it will compensate the defendant for losses suffered as a result of a preliminary injunction that subsequently is discharged. This last approach more or less guarantees the wrongly accused defendant the profit it lost as a result of its temporary exclusion—but it nonetheless can leave the plaintiff better off than it would have been absent the wrongly-issued injunction, because the profit earned by a monopolist normally will be greater than the duopoly profit the monopolist and the accused infringer each would have earned in the absence of the injunction. This economic consequence leads some commentators to wonder whether the plaintiff should be required to disgorge the entire profit it earned as a result of the preliminary injunction, but to date this approach has mostly been rejected by the courts (one problem being how to divide up the monopoly profit where it has been earned at the expense of multiple entities).
Anyway, as I said, I discuss the relevant case law and commentary in my forthcoming book, though I'm not sure whether I will be able to add a citation to a decision handed down this morning by the Patents Court for England and Wales, Sandoz AG v. Bayer Intellectual Property GmbH, [2025] EWHC 2201 (Pat.), involving the issue of monetary relief for an ex post wrongly-issued preliminary injunction. (Hat tip to ip fray for calling this decision to my attention.) Not surprisingly, the court follows the majority approach in rejecting Sandoz et al.’s request for disgorgement of profits, notwithstanding these parties’ argument that a cross-undertaking entitles the enjoined party to monetary relief “as if there had been a contract in which the applicant agreed not to prevent the respondent from doing that which the injunction prevented him from doing,” and that in exceptional cases English courts can award disgorgement as a remedy for breach of contract. Consistent with other English cases, the court concludes that the cross-undertaking is limited by its terms to compensatory damages. Whether disgorgement would be a desirable remedy because it provides a greater deterrent—or whether it would unduly chill patent owners from enforcing their rights—nevertheless remains an interesting policy question, and I hope that this decision (and my book!) will inspire further debate--though this may be one of those issues for which economic analysis can never provide a definitive answer.
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