1. LORD JUSTICE ALDOUS: The only issue that remains is costs. They are considerable, thus the dispute between the parties as to what the order should be.

2. In our judgment of 31st July 2002 we held that the Kirin Amgen patent had not been infringed by TKT. We went on to dismiss the attack against the validity of the patent. In doing so we rejected allegations that the patent lacked novelty and was insufficient. Before the judge other attacks upon the patent were raised. He dismissed them and there was no appeal against his conclusions on those issues. However he held that the patent was infringed and was partially invalid and in consequence it needed amendment. Thus the costs order has to deal with the costs before this court and before the judge.

3. The parties have agreed the basis of an order as to certain of the costs, for example the costs as to issues before the judge on obviousness, added matter and amendment of the patent. Thus this court is basically concerned with the other costs before the judge and the costs on appeal and the way that the order should be structured.

4. Kirin Amgen seek an order for costs which they submit would reflect which party won on each issue. To avoid an assessment relating to each issue they submitted that a fair result could be achieved by looking at the transcript and ascertaining the time spent in court on each issue. They submitted that in principle that resulted in an order that at first instance, TKT should pay 80% of Kirin Amgen's costs of the whole proceedings and that Kirin Amgen should pay 20% of TKT's costs. In respect of the appeal Kirin Amgen would recover 70% of their costs and would pay TKT 30% of their costs.

5. TKT, rightly in my view, criticised the way that the percentage figures were arrived at by counting pages of the transcript. That did not reflect the amount of time spent on preparation, nor the fact that the Roche were parties in the proceedings before the judge, nor the result of the whole proceedings.

6. TKT proposed that it would be right to take into account the way the proceedings started and in particular that the validity issues could have been avoided if Kirin Amgen had acceded to TKT's request for a declaration of non-infringement. They also submitted that it would not be right to award costs purely on an issue basis as some of the issues of validity, upon which TKT lost, were advanced as "squeezes" to ensure that the court concluded that TKT did not infringe the patent, an issue upon which they won.

7. They submitted that in any case the result was that TKT had won: no relief had been granted against them as they did not infringe. That was the result that they had sought to achieve at the outset. With that in mind TKT proposed that Kirin Amgen should pay TKT the general costs of the consolidated proceedings to include the issues of infringement before the judge and on appeal. There should be no order as to costs in respect of the issue concerning the validity of claims 19 and 20 of the patent, but that TKT should pay Kirin Amgen's costs of the action in relation to the two insufficiency arguments and the issue of novelty and the appeal in A3/2002/0928 which related to amendment.

8. I accept that TKT's submissions on novelty and a submission on insufficiency were said to be "squeezes", but those arguments played no part in this court's conclusion that there was no infringement. The fact they that were intended to be "a squeeze" would seem to be irrelevant to the conclusion as to who should pay the costs. The result would have been the same without those issues being pleaded or argued. They were in that sense an unnecessary addition to the case.

9. The major difference between the parties, namely whether TKT should recover the general costs of the proceedings before the judge and this court, is essentially one of principle. TKT's submissions are based upon the view that they won the action in that no relief was to be granted against them as they did not infringe. Thus they should get the general costs of the action. They should only pay costs in respect of those allegations upon which they lost and which could not have had a bearing on the result.

10. Kirin Amgen accept that they did not obtain relief for infringement, but believe that the costs should be awarded upon an issue basis. The loser of an issue should pay the costs of that issue.

11. The principles as to awarding costs in patent actions are no different to the principles which are applied in other cases. Thus the general principle is that the costs should follow the event: see CPR 44.3(2). However as has been made clear in a number of judgments of this court, the court should in appropriate cases award costs in favour of a party who wins an issue if to do so is in the interests of justice generally.

12. It is normal in patent actions for a defendant to defend himself upon the basis that he does not infringe and also because the patent is invalid. In most cases the allegation of invalidity takes the form of a counterclaim. In many cases the issues raised by the defendant upon validity produce the major costs of the trial. In my view it would not be right to make any order as to costs which would have a tendency to encourage parties to plead a case that did not succeed. However generally the order should reflect the outcome of the proceedings. This is a case where TKT did achieve that which they set out to achieve. Thus in my view it would be appropriate to award them the general costs of the proceedings to include the costs of the issue of infringement.

13. The other major issue between the parties related to the costs as to the issue of the validity of claims 19 and 20. It involved a long and complex analysis of pages in the notebooks of Kirin Amgen that were disclosed. It also involved some days of evidence. The judge upheld TKT's submissions that those claims were invalid. This court accepted the findings of fact made by the judge, but as a matter of law and construction of the claims came to a different conclusion.

14. Kirin Amgen submitted that as they had won on the validity of claims 19 and 20, they should recover their costs of these issues. TKT submitted that there should be no order as to costs.

15. I believe that no order as to costs would reflect the way that the sub-issues were decided.

16. The only other issue concerns a submission made on insufficiency based on an argument as to the breadth of the claim. The costs of that issue should be recoverable by Kirin Amgen with the costs of the other issues of insufficiency which TKT accept they should pay.

17. The conclusions to which I have arrived produces a complex, detailed assessment of both parties' costs. I am conscious of the costs that would be involved in carrying out such an assessment and the need for any order to be proportionate. With that in mind we sought help from counsel as to whether it was possible to arrive at a percentage figure that should be ordered in one party's favour upon the basis of the conclusions which I have reached.

18. Mr Kitchin QC for TKT submitted that a fair result would be that Kirin Amgen should pay 20% of TKT's costs. That figure could, he submitted, be arrived at by the court taking a general view of what had been involved.

19. Mr Waugh QC, upon the basis that the general costs would not be awarded to TKT, submitted that his clients should recover 60% of their costs before the judge and 40% in the Court of Appeal.

20. I am conscious of the costs that have already been expended by the parties. I am also conscious of the need to avoid further costs which is an overriding objective of the CPR (see CPR 1.1(2)(b)). It is also appropriate to have in mind the considerable drain on the court's resources that would occur if both sides' costs needed to be assessed (see CPR 1.1(2)(e)). Doing the best I can, I have concluded that TKT should recover part of their costs from Kirin Amgen. I conclude that justice would be served by ordering that Kirin Amgen should pay 10% of TKT's costs in all the proceedings, including the amendment proceedings, both in this court and before the judge.

21. LADY JUSTICE HALE: I agree.

22. LORD JUSTICE LATHAM: I agree.

ORDER: Kirin Amgen to pay 10% of TKT's costs in all the proceedings (including the amendment proceedings) both in this court and before the judge.

(Order not part of approved judgment)