DISCUSSION
6 The principles relevant to the judicial discretion on costs, including indemnity costs by reason of refusal to accept a Calderbank offer, are well-known and were not in dispute.
7 The first question is the notice of motion. It is true that when leave to amend was granted costs were reserved. It is also true that more than two years have passed without Apotex having claimed its costs of the motion. Equally, I have little information about the motion other than that Sanofi-Aventis sought leave by it to amend the patent by reducing the patent claims to a single claim (the basis of the principal judgment) and Apotex consented to the patent being amended. In my view, however, that is sufficient. As Apotex said, Sanofi-Aventis had to approach the court for the order it required and, for that purpose, had to satisfy the court the order was appropriate. The amendment no doubt did save time and cost thereafter. Presumably, that is the reason why Apotex raised no objection to the motion. But the usual principle that costs follow the event has no role to pay on such a motion. It is Sanofi-Aventis's patent and, when sought to be enforced and challenged, Sanofi-Aventis chose to seek to amend it. Apotex should not have to pay Sanofi-Aventis's costs on that account. Rather, Sanofi-Aventis should pay Apotex's costs of the motion.
8 The second question is the costs of the matter after publication of the principal judgment on 29 July 2011. Although there is considerable weight to Sanofi-Aventis's submission that the events after this date simply involved the working out of the form of the orders that should be made and thus formed part of the event (being Sanofi-Aventis's overall success in the matter), one factor is a distinguishing feature. Sanofi-Aventis raised the copyright issue which, although relevant to the orders that should be made, raised a discrete and substantive issue of construction. That issue involved the bulk of the hearing time after 29 July 2011; a fact that is reflected in the consequential judgment which is 54 paragraphs, 38 of which deal exclusively with the copyright issue. Although I did not accept all of Apotex's arguments I accepted Apotex's overall position and rejected that of Sanofi-Aventis about this issue. I am unable to identify any fair basis on which Sanofi-Aventis should receive its costs of that issue which, as I have said, was discrete and substantive and took up most of the hearing time after 29 July 2011. The compensation to Sanofi-Aventis which costs represent should not extend to this copyright issue. Should Apotex have its costs of this issue? An order to that effect, in my view, is likely to engender further disputes between the parties when costs come to be agreed or assessed. Given that Sanofi-Aventis is entitled to at least an order for costs in its favour on a party-party basis for the bulk of the proceedings, it makes no sense to make a cross-order for costs when those costs will not readily be able to be isolated (in contrast to the notice of motion where a separate costs order is appropriate). Rather, the appropriate order would be to reduce Sanofi-Aventis's overall costs entitlement in a manner that fairly takes into account the course of the proceedings after 29 July 2011.
9 The third question is indemnity costs. I am not persuaded that an order for indemnity costs in Sanofi-Aventis's favour is justified. Sanofi-Aventis did make an offer to settle and Apotex did decline to accept that offer. However, it is impossible to say that the result of the proceedings was more favourable to Sanofi-Aventis than acceptance of the offer would have been. Indeed, the offer and the outcome of the proceedings cannot meaningfully be compared. The offer was for Sanofi-Aventis to grant to Apotex a licence to sell its product for all indications after 1 December 2012 in exchange for royalty payments of 10% for the term of the patent. Royalties were payable under the offer on all sales. By reason of the proceedings Apotex cannot sell its product for the indication of psoriatic arthritis (PSA) but can do so for rheumatoid arthritis (RA). On the evidence RA is far more common than PSA and thus, presumably, would represent most of the sales in Australia. Apotex has also already launched its product, before the 1 December 2012 date in the offer. I am not satisfied that Sanofi-Aventis achieved a better result than the offer. I am also not satisfied that Apotex's refusal of the offer was unreasonable for the same reasons. It is true that the reasonableness of the offer and unreasonableness of any refusal to accept it is to be assessed in the circumstances prevailing at the time the offer is made. It is also true that the letter in response to the offer makes no reference to the royalties as a specific reason making the offer commercially untenable (which was Apotex's position). Nevertheless, the response refers to the whole of the offer including the royalty regime and the timing issue (that is, the licence commencing only on 1 December 2012). More importantly, the response states that Roger Millichamp, Apotex's Managing Director, would contact Jean Monin, Sanofi-Aventis's Managing Director, to explore a "commercial resolution to this matter", noting that this would be best done in direct discussions between the two Managing Directors. Evidence indicates that Mr Millichamp thereafter made a series of attempts to contact Mr Monin to which he received no response. Given the commercial nature of the offer, and Apotex's apparent willingness to explore a commercial resolution, it cannot be concluded that Apotex unreasonably refused the offer. Accordingly, no order for indemnity costs should be made in Sanofi-Aventis's favour.
10 The remaining question is the consequence of my conclusion about the copyright issue. Although that issue involved the bulk of the hearing time after 29 July 2011 it was not the only issue that had to be resolved. The parties had to articulate their competing positions and be heard on the appropriate declarations and orders irrespective of the copyright issue. Other than the copyright issue, as Sanofi-Aventis said, all of those disputes were merely part and parcel of working out the consequences of its success overall. None of those issues should be the subject of separate consideration (they were not discrete substantive issues) and none should diminish Sanofi-Aventis's compensation by way of a costs order irrespective of the outcome on any particular issue. Viewed in this context, it is apparent that any deduction from Sanofi-Aventis's overall entitlement to costs to account for Apotex's success on this issue must be limited to the period after 29 July 2011 and until 18 November 2011 (the date on which the consequential judgment was published) and must be of a relatively small order for that period despite the hearing time the copyright issue involved. I consider that there should be a reduction of costs of 20% for that period to reflect the fact that Apotex succeeded on the copyright issue, and make orders accordingly.
I certify that the preceding ten (10) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Jagot.