Proposals for Patents County Court reform issued

United Kingdom
Following a consultation process that attracted the interest of leading names in the IP world in the United Kingdom, on July 31 2009 the Working Group of the Intellectual Property Court Users' Committee published its proposals for the reform of the Patents County Court.  

The key objective of the reform is to grant small and medium-sized enterprises (SMEs) and individual litigants improved access to justice. This will be achieved by:
  • the introduction of an "inherently cheaper" procedure;
  • a modification of the costs recovery regime; and
  • a clear differentiation between the Patents County Court and the High Court. 
The new rules would also see the re-branding of the Patents County Court as the Intellectual Property County Court (IPCC), officially reflecting the expansion of the Patents County Court's special jurisdiction to include all forms of intellectual property.

In terms of procedural changes, the parties will be required to set out their cases by sequential written arguments at the outset. Under the working group's proposals, the IPCC will issue specific guidance, including model pleadings, to enable practitioners to present their cases fully, yet concisely.

The proposals envisage the introduction of a robust case-management system characterized by:
  • a strict timetable;
  • control by the judge;
  • trial length limited to one or two days of court time;
  • the introduction of a cost-benefit test to permit or require disclosure, experiments, factual evidence, expert evidence and/or cross-examination; and
  • applications to be made and responded to in writing.
The recovery of costs by the successful party will be modelled on the UK Intellectual Property Office's scale fees system and will be capped at £50,000 for all types of claim. The working group suggests that the cap will be inclusive of any disbursements, any success fee payable under a conditional fee agreement and any insurance premium. Inquiries as to damages or account of profits would be considered as a separate proceeding and subject to a costs cap of £25,000.

The IPCC would reserve the right to award costs on an off-scale basis in exceptional circumstances (eg, where either party has behaved unreasonably).

As far as the differentiation of the IPCC from the High Court is concerned, the IPCC should be reserved for cases where the financial remedies sought do not exceed £500,000 (excluding interest). The proposals envisage that the IPCC will issue specific guidance on the differentiation and the types of cases it will hear.
 
The working group's initiative and proposals are certainly laudable. In particular, there will be clear benefits for trademark (and design right) litigants:
  • The trademark jurisdiction of the Patents County Court has been underutilized. However, litigants may be more willing to bring disputes before the IPCC as a result of the procedural changes and the change of name.
  • If the case is heard by a well-respected and active judge and no (or limited) survey evidence is presented, the £50,000 costs cap could constitute a better overall recovery for trademark actions than for patent litigation.
  • It may prove beneficial that trademark cases will be heard by a court exclusively versed in IP matters, thereby minimizing cost and the risk of appeal.
However, certain areas of key risk have to be addressed if the IPCC is to provide access to justice to SMEs and individuals effectively. First, with regard to the transfer procedure from and to the IPCC, the following questions arise:
  • Will the new rules prevent transfer applications from becoming costly and uncertain pieces of satellite litigation?
  • Will the envisaged IPCC guidance assist in a speedy and cost-effective determination of the competent forum?
This is particularly true in trademark cases where the injunction is often of paramount importance to both parties (and its 'value' difficult to quantify) and the actual damages awarded may be less than £500,000.

Second, with regard to the question of what to do with costs on appeal to the Court of Appeal, the working group recognizes that this is an issue, but considers it to be within the remit of Lord Justice Jackson's review. Finally, any new judges at the IPCC must have trademark as well as patent expertise, and have proper resources allocated to them.

Cam Gatta, Ashurst LLP, London

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