The ”New” English Patents County Court

(IPRinfo 5/2011)

Robert Williams
London
Bird & Bird LLP

A number of changes to the procedural rules of the English Patents County Court have been introduced with the aim of streamlining.

On 1 October 2010, a new set of rules came into force setting out the procedure applicable to cases brought in the English Patents County Court (PCC). These rules are intended to makes cases in the PCC more streamlined, and cheaper, and hence make the PCC a more attractive forum for small and medium-sized enterprises (SMEs) to bring (and defend) IP disputes in the UK.

The bulk of the new rules can be split into three categories: (I) rules intended to streamline the procedure (and hence reduce total costs incurred); (II) rules intended to limit the scope for recovery of costs; and (III) rules related to transfer of cases between the PCC and the English High Court.

Procedural Changes
A number of changes to the procedural rules have been introduced with the aim of streamlining cases in the PCC. First, the new rules provide that the parties’ Statements of Case (SoC) should ”set out concisely all the facts and arguments upon which the party serving it relies”. The intention is that the SoC should therefore form the basis of the parties’ respective arguments and evidence.

Once any Defence(s) have been served, a Case Management Conference (CMC) should take place. At the CMC the court may order any of the following: specific disclosure, a product or process description; experiments; witness statements; experts’ reports; cross-examination at trial; written submissions or skeleton arguments.

However, the court should only do so in relation to ”specific and identified issues” and if satisfied that ”the benefit of the further material in terms of its value in resolving those issues appears likely to justify the cost of producing and dealing with it”.

So the default position is no disclosure or witnesses or experts or cross-examination, unless you seek, and justify, then need at the CMC. The default position is emphasised by a specific rule which states ”Where possible, the court will determine the claim solely on the basis of the parties’ statements of case and oral submissions”. The court should also endeavour to ensure that any trial lasts no more than 2 days.

Costs Capping
Whilst the procedural rule changes referred to above are designed to reduce the costs incurred by all parties in PCC cases, it remains the case that a well-resourced defendant might still spend significant sums on preparing and prosecuting its case.

Accordingly, the second set of rule changes are aimed at limiting the amount a successful defendant may recover from an unsuccessful claimant (albeit that the rules are drafted so as to apply to any party).

The first way in which they do so is by imposing a total costs cap of £50,000 (+ VAT, where applicable) for any claim relating to liability. This is distinguished from an inquiry as to damages or account of profits, in relation to which a £25,000 cap applies.

The only exceptions to the application of these costs caps are (I) where the court considers that party has behaved in a manner which amounts to an abuse of the court’s process (i.e. a high hurdle); and (II) where the claim concerns the infringement or revocation of a patent or registered design which has been found valid by a UK court in earlier proceedings.

The second way in which costs are capped, is by reference to a scale of costs, which limits the amount that can be recovered for each stage of a claim.

Transfer of Cases
A fundamental problem with the old PCC was that whilst it was intended to deal with smaller, less technically complex, lower value actions, claimants were, in practice, able to ”forum shop” as between the PCC and the High Court, and applications to transfer cases between the two courts were often expensive, and unpredictable (creating a further disincentive on claimants from starting proceedings in the PCC).

Additionally, and in any event, the procedure in both courts was the same, so ultimately the choice of court might not have a huge impact on the costs ultimately incurred. However, the new PCC regime is very different from the High Court regime, so transfer of cases between the two courts needs to be carefully managed.

Accordingly, a new provision provides specific guidance on what the court should take into account when considering whether to transfer a case from or to the PCC. In particular, the court is now required to firstly consider whether a party can only afford to bring or defend a claim in the PCC, and secondly whether the claim is appropriate to be determined by the PCC having regard to the value of the claim (including the value of an injunction); the complexity of the issues; and the estim
ated length of the trial.

Furthermore, if a transfer is ordered, then this may be on such terms as the court sees fit, and in particular, the court may award no (or reduced) costs if it allows the claimant to withdraw its claim (presumably where the court considers that a transfer from the PCC to the High Court is appropriate).

Additional Changes
A further aspect of the new rules worth noting is the more recent introduction of a cap of £500,000 on the damages (or profits) recoverable in the PCC.

In conjunction with this cap, claimants with higher value claims are entitled to limit their claims to £500,000, albeit that defendants are still be able to contend that such cases should nevertheless be transferred to the High Court, in line with the guidance on transfer of cases (where the ”value” of the claim is considered to warrant such a transfer).

In order to provide additional guidance on the PCC, a dedicated Guide was published on 12 May 2011. This contains lots of useful information about the Court, and some guidance on how various matters referred to in the Rules will be dealt with in practice.

In particular, it summarises the scope and extent of the court’s jurisdiction by reference to a number of recent decisions, provides additional guidance on the criteria for transfer of cases, and explains how various procedural aspects of the Rules will be applied.

It should also be noted that it has been proposed that the PCC should be renamed the Intellectual Property County Court, so as to reflect the nature of the business it conducts (the court, since April 2005 having jurisdiction to deal with all IP cases). This is hardly fundamental to its operation, but clearly desirable, and will hopefully occur in the not too distant future.

How’s it going so far?
A good number of cases have now been subject to hearings in the PCC. Whilst the majority have dealt with interim issues (e.g. related to jurisdiction/transfer questions) and CMCs, there have also been several trials.

What is abundantly clear from the decisions delivered during its first year of operation is that the judge in the PCC (HHJ Birss QC) is taking a firm grip of cases and actively (and indeed proactively) managing them by way of the PCC rules. His decisions are comprehensive, well-reasoned, and delivered quickly.

In summary, the PCC seems to be shaping up well. Whilst we haven’t seen that many patent cases in the PCC yet – the majority of cases to date have concerned trademarks/copyrights and designs – it looks like it has a bright (and busy) future ahead of it.