High Court strikes out Sandoz's profit account claim against Bayer

The High Court delivered a significant judgement on 1 September 2025 in Sandoz AG v Bayer Intellectual Property GmbH, clarifying the scope of cross-undertakings in patent litigation. Deputy Judge Michael Tappin KC struck out Sandoz's claim for an account of profits, reinforcing established principles that cross-undertakings serve compensatory rather than restitutionary purposes.

Background and dispute origins

The litigation centred on Bayer's patent for rivaroxaban, marketed as Xarelto, which had endured substantial legal challenges including opposition proceedings culminating in a major trial before HHJ Hacon in 2024. When Sandoz indicated its intention to launch a generic rivaroxaban product upon patent expiry, Bayer secured interim injunctions to prevent market entry, asserting patent exclusivity.

Sandoz subsequently sought compensation under Bayer's cross-undertakings, claiming losses exceeding £3.9 million and pursuing an account of profits. The pharmaceutical company argued that absent the injunctions, it would have successfully supplied rivaroxaban to the market.

Legal arguments and judicial analysis

Bayer contended that Sandoz's claims should be struck out under CPR 3.4(2)(a), maintaining that the cross-undertakings' language precluded profit-sharing claims. The company emphasised that cross-undertakings create compensatory obligations rather than restitutionary remedies.

Judge Tappin's analysis drew extensively on established precedent, particularly Hoffmann-La Roche v Secretary of State for Trade and Industry and Abbey Forwarding v Hone. These authorities establish that cross-undertakings fundamentally serve to ensure justice by compensating parties wrongfully restrained by injunctions, not to penalise injuncting parties or mandate profit restitution.

The judgement emphasised that cross-undertakings operate within a compensatory framework designed to restore injured parties to their pre-injunction position. This principle distinguishes cross-undertakings from other legal mechanisms that might justify profit recovery, such as restitutionary claims based on unjust enrichment.

Striking out decision and implications

Tappin KC rejected Sandoz's alternative arguments concerning exceptional circumstances that might justify departing from established cross-undertaking principles. The judge found these contentions lacked substantial legal foundation or precedential support, describing them as fundamentally incompatible with the compensatory nature of cross-undertakings.

The ruling reaffirmed traditional patent litigation principles whilst providing clarity on injunction-related compensation. By distinguishing between legitimate compensatory claims and impermissible profit-recovery attempts, the judgement establishes important parameters for future pharmaceutical patent disputes.

Wider significance

This decision carries substantial implications for intellectual property litigation strategy, particularly in pharmaceutical patent disputes involving generic market entry. The judgement clarifies that parties seeking interim injunctions face compensatory but not restitutionary exposure under their cross-undertakings.

The ruling suggests claimants must carefully scrutinise cross-undertaking language and frame their compensation strategies within established legal precedents. Future litigants cannot rely on exceptional circumstances arguments to transform compensatory undertakings into profit-sharing mechanisms.

The judgement also reinforces the importance of precision in drafting cross-undertakings and managing client expectations regarding available remedies. In the competitive generic pharmaceutical market, where interim injunctions frequently determine market timing, this clarity regarding remedy scope proves particularly valuable.

By reaffirming that cross-undertakings serve justice through compensation rather than punishment through profit recovery, the High Court has provided important guidance for pharmaceutical patent litigation whilst maintaining established legal principles governing interim relief.