Language – Zero-Sum Game

This collocation of language has its genesis in mathematics but now is frequently used in gaming and otherwise metaphorically.

The Cambridge Dictionary (Online) provides the following definition:

‘a situation in which an advantage that is won by one of two sides is lost by the other- eg ‘free trade benefits everyone in the end because trade is never a zero-sum game.’

The Merriam-Webster Dictionary (Online) provides the following definition:

‘a situation in which one person or group can win something only by causing another person or group to lose it – eg ‘dividing up the budget is a zero-sum game.’

The following usage of the language is found is case law:

• Sigma Pharmaceuticals (Australia) Pty Ltd v Wyeth (2018) 136 IPR 8; [2018] FCA 1556 per Jagot J:

[1241]  I encouraged the generics and the manufacturers/suppliers to resolve these disputes on some appropriate basis between themselves because they are a zero‐sum game. The sales volumes to pharmacists which are an outcome of Professor Hausman’s work dictate the amount of product the generics would have ordered from the suppliers. Those sales volumes are related to the sales prices to pharmacists, another outcome of Professor Hausman’s work. The supply prices to the generics are not part of Professor Hausman’s work. They thus do not affect sales volumes in the model. In reality, however, the manufacturers/suppliers and the generics had both competing and mutual interests. They both wanted the generics to sell as much product as possible to pharmacists. The generics could only continue to do so, however, if the sales to pharmacists could be made at an acceptable profit. The supply prices to the generics were the main variable cost which enabled them to continue to tailor their offers to maximise sales. So the manufacturers/suppliers had an interest in the generics being able to continue to make a profit which (together with the low cost of the manufacture of generic drugs) explains why the evidence discloses supply prices to generics being re‐negotiable and re‐negotiated. Professor Hausman and Ms McTavish both recognised this dynamic as fundamental to the generic pharmaceuticals industry and the overall trend over time towards lower prices to consumers on the entry of multiple generic brands of a drug into a market.

[1242]  Despite their disputes being a zero‐sum game, the generics and manufacturers/suppliers were unable to reach an agreement for the purpose of their hypothetical loss when the evidence shows that when required to do so by commercial circumstances they do reach agreements which ensure continued mutual profitability. This same principle of re‐negotiation as and when required to ensure continued mutual profitability is the only sensible approach to these disputes.

• Australian Securities and Investments Commission v Mitchell (No 2) (2020) 146 ACSR 328; [2020] FCA 1098 per Beach J:

[1571]  This was where I came into the picture. In summary, I imposed a solution that was fair to all. I permitted the tender of the internal Seven emails and I ordered that Mr McWilliam appear to be examined exercising my powers under s 46 of the FCA Act and also other express or implied powers. And I permitted both ASIC and Mr Mitchell to cross-examine Mr McWilliam. Indeed, this was doubly advantageous to ASIC although it might not quite perceive it that way. First, this solution avoided the risk to ASIC that I might reject the admissibility of the internal Seven emails or make an order under s 135 of the Evidence Act if they were otherwise admissible under s 69. Second, ASIC was able to cross-examine Mr McWilliam, and as it turned out at large. Of course, Dr Collins QC for Mr Mitchell was also able to cross-examine, although for the most part he exercised admirable restraint in asking many non-leading questions.

[1572]  Further, my solution did not entail a zero sum game. Judged ex ante, everyone had a win. But judged ex post facto, the fact that ASIC’s cross-examination of Mr McWilliam did not go as well as it might have wished for was the result of its forensically impoverished position on the facts, rather than an inevitable outcome of my solution which had been imposed to get around the strategic posturing of the parties and to get to the forensic heart of the matter.

[1573]  Did I impose a Continental solution? Or is there nothing to see here? I will leave those competing meta-questions for others to ruminate on.