The Patents County Court – faster, easier and cheaper

The Patents County Court (PCC) is likely to become a more popular forum for enforcing and challenging IP rights in the United Kingdom following recent changes to streamline the litigation procedure and to limit the costs and financial remedies available.

Background
IP infringement and/or validity proceedings can be brought at two tiers of the UK legal system: the High Court and the PCC which, despite its name, can hear disputes for all IP-related matters, not just patents.

The procedures for conducting IP proceedings before the High Court and the PCC were traditionally similar until changes to the procedure before the PCC were introduced just over one year ago. These changes:

• Allow PCC cases to be resolved faster.
• Simplify proceedings.
• Reduce the financial risk involved in bringing a case.

Streamlined procedure
The streamlined procedure at the PCC is intended to speed up litigation by allowing cases to be managed actively. There is also a greater emphasis on written submissions before the PCC than before the High Court, where oral testimony plays an important role. The emphasis on written submissions before the PCC means that parties should set out their case (ie, all facts and arguments) in writing at the outset (eg, see Liversidge v Mumford [2011] EWPCC 34) – the level of detail required is akin to that involved in filing a notice of opposition at the European Patent Office. No further evidence or written submissions are allowed into proceedings without the permission of the judge. If any requests to admit new material are made, the judge will consider whether the relevance of that new material outweighs the costs involved in producing it and dealing with it. Similarly, factual or expert evidence, new experiments or cross-examination are admissible only if ordered by the judge. The restrictive framework helps to minimise costs because it reduces the likelihood of new issues being raised once proceedings have begun.

Before the PCC, it is also possible to avoid the time and money involved in preparing for and attending a trial if the parties agree for a decision to be made based on the written submissions. Even if a trial is held, it should last no longer than two days and, as far as possible, an equal time will be allocated to the parties at the trial.

The new rules mean that cases before the PCC will proceed in a style that is similar to contentious patent proceedings before the European Patent Office and contentious trademark proceedings before the Office for Harmonisation in the Internal Market, which are familiar procedures to UK patent and trademark attorneys (both of which can represent parties before the PCC).  

Damages and costs
The damages and costs that can be awarded by the PCC have been capped in an attempt to reduce the financial risk of conducting litigation.

The damages or account of profits that can be awarded to the winning party have been capped at £500,000 (disregarding interest) and the costs that can be recovered by the winning side have been capped at £50,000 for liability, which is to include disbursements, success fees and insurance policies. If an account of profits or damages is sought, the costs are capped at £25,000. There are also fixed costs that can be awarded for each stage of proceedings should the case be settled (eg, the maximum recoverable sum for preparing witness statements is £5,000), but the more straightforward procedure of the PCC should help to minimise those costs. This is very different from the High Court, where the costs of the parties would be higher and the amounts recoverable are uncapped.

The costs of any potential appeal from the PCC are not capped, but the body which advised on the reforms to the PCC (the Intellectual Property Court Users Committee) has stated:

“we are confident that the Court of Appeal would be sensitive to the question of costs on appeal from the reformed PCC, and would be unlikely to award more by way of appeal costs than the first instance costs."

Thus, any award of costs that result from an appeal should be mitigated.

The cap on damages and account of profits means that it would be advisable for higher value cases to be heard in the High Court. Highly complicated cases – which the PCC is not designed to hear – should also continue to be brought before the High Court.

Summary
Cases can be brought in either the PCC or the High Court, but the use of the PCC limits the costs and financial remedies available and involves a more simplified streamlined procedure. The changes to the PCC bring greater certainty to the costs involved in litigation, which might be particularly attractive for lower-value cases for both large and small litigants. It is therefore likely that the PCC will become a more popular forum for hearing IP disputes in the future.

A party should seek legal advice either in the event that it becomes aware that its IP rights are being infringed or that it might infringe the IP rights of another party. It might be possible to come to a satisfactory conclusion by opening dialogue with the infringer or other party, thus avoiding litigation altogether.