Patent litigation in the United Kingdom is notoriously expensive. Historically, patent cases were heard exclusively in the Patent Court, a specialist court in the Chancery Division of the High Court.
About 20 years ago, a new forum for patent litigation was created: the Patents County Court (PCC). There were high hopes that the PCC would enable individuals and small and medium enterprises (SMEs) to enforce their intellectual property rights in a simpler and less costly alternative to the High Court. However, in practice this proved not to be the case and the PCC became a parallel venue to the High Court, with similar procedures, timescales and costs.
A fresh attempt has now been made to achieve the original objectives of the PCC. On 1 October 2010 a new set of rules was introduced with the intention of bringing major changes to the way the PCC operates. The aim was to make it more attractive as a forum for IP litigation to individuals and SMEs, enabling them to enforce their IP rights in a controlled environment where costs cannot spiral out of control. The changes include a cap on recoverable costs, a scale of costs for the main procedural steps, a tight procedural timetable and restrictions as the evidence that will be admitted.
The costs that can be awarded have been capped at £50,000 for liability and £25,000 for an inquiry as to damages or an account of profits, thereby limiting the cost exposure of the parties involved. This will be particularly beneficial for an individual or an SME with limited resources; no matter how much their opponent spends on their case, the maximum amount of costs that the individual or SME will be liable for is £50,000.
In addition to the overall cap on costs, there is a scale of costs for the main procedural stages which limits liability in each case; for example, the maximum sum recoverable for the preparation of witness statements is £5,000. There is provision for costs above the maximum to be awarded where the court considers that a party has behaved unreasonably. However, this is likely to be used sparingly or it will risk undermining the purpose of the new PCC.
New procedural rules have also been introduced. Where possible, the case will be determined entirely on paper on the basis of the parties’ statements of case, which should fully set out their respective cases. In addition to this, there will be a much tighter procedural timetable and strictly controlled case management. The judge will take an active part throughout and, at the case management conference, will decide whether to order any evidential steps. These may include a product or process description, experiments, witness statements, cross examination at trial and/or experts’ reports. Whereas the use of most of these may have been common practice under the old PCC, it is hoped that under the new system the majority of cases will proceed without most, if not all, of them, and a request for such evidence to be allowed will only be granted where the judge is satisfied that the likely benefit of the evidence justifies the cost of producing it.
Where a case does go to trial, the aim is that trials will last no longer than two days with equal division of time for the parties involved.
It is hoped that these changes will result in quicker and lower cost resolution of disputes, encouraging those with limited resources to enforce their IP rights. Some fear that the restrictions on procedure may prevent the court having full access to all the relevant facts and witnesses, and that as a result the quality of the justice meted out will suffer. However, for those that can afford it and wish to ensure that everything is considered in full, litigation through the High Court is still an option.
The implementation of the new rules has coincided with the appointment of a new and relatively young judge to the PCC, and he has already issued several robust judgements. It remains to be seen whether these initiatives will truly transform the patent litigation system in the United Kingdom.
25 November 2010