22 November 2014

Top 10 Tips for Resolving IP Disputes

1. Be careful what you say and do.
If you threaten to sue someone for patent infringement you can be sued yourself under s.70 of the Patents Act 1977 unless you can justify those threats. You can be injuncted (ordered to refrain from making those threats on pain of imprisonment or fine for disobedience) and made to pay substantial damages and costs. So leave the accusations to your lawyers or patent attorneys who can take care of themselves.

2. Consider Before-the-Event Insurance
It is not a crime to infringe a patent in this country. You and only you are responsible for enforcing your monopoly. You must do that through the courts which can be expensive. There is no longer legal aid for IP or other business disputes. Because most IP litigation proceeds in 2 phases it is difficult for most lawyers to accept "no win no fee" retainers, especially now that it is no longer possible to recover success fees and after-the-event insurance premiums from the losing party. You must also make provision for the costs of the other side if you are unsuccessful.  Unless you can raise at least £100,000 from your own resources you should consider before-the-event IP insurance before a dispute arises because the premiums for after-the-event insurance are astronomical (see IP Insurance Five Years On  23 Oct 2014).

3. Follow the Practice Direction - Pre-Action  Conduct
This is very important because the court has power under paragraph 4 to penalize parties who fail to comply with the Practice Direction.  Remember that the purpose of the Practice Direction is to enable parties to settle their dispute without the need to start proceedings and that litigation should be the very last resort. Make sure that your letter before claim complies with Annex A of the Practice Direction and that you supply all the information and enclose all the documents that the other side will need to decide whether you have a valid claim. Although it was published some years ago you may also find the Code of Practice for Pre-Action Conduct in Intellectual Property Disputes useful.

4.  Consider ADR (Alternative Methods of Dispute Resolution)
As a general rule the sooner you resolve your dispute the better it will be for all concerned. True, you may be able to force a settlement if the other side runs out of money before you do but then you will also have incurred costs which your opponent may not be able to pay. As I have said above, one of the aims of the Pre-Action Conduct Practice Direction is to help you settle your dispute without recourse to litigation. You can do that through direct negotiations with the other side or you can ask an intermediary known as a "mediator" to help you. He or she will collect information in confidence from each of the parties and look for common ground upon which a settlement can be based. Often the settlement is a solution that would never have occurred to either of the parties (see Mediating Disputes from the Trade Marks Registry 1 Sept 2005 NIPC Law). The Intellectual Property Office runs a good mediation service (see The IPO's New Improved Mediation Service - will it make a difference? 7 April 2013 NIPC Law) as does the World Intellectual Property Office (see ADR of Intellectual Property Disputes 22 Aug 2006 NIPC Law). If there is a bona fide dispute that only a determination by a trusted third party will resolve you may be able to obtain an opinion on the issue from an examiner of the Intellectual Property Office for as little as £200 (see Intellectual Property Act 2014: The New Law on Opinions 29 Oct 2014 NIPC Law).

5.  Budget for Litigation as you would any other Expenditure
Since April 2013 the parties to a dispute have had a duty to help the court to deal with cases justly and at proportionate cost. In order to comply with that obligation most parties that are legally represented have to draw up, file and exchange budgets for conducing the litigation before the first case management conference under CPR 3.13 and the court may impose limits to the parties' expenditure if it thinks fit. There are a number of exceptions to this rule but it is a good discipline to follow even if you are not bound by it. Just as war is conducting policy by other means litigation can be said to be conducting business by other means. Just as you would plan and review any other type of expenditure with defined objectives so you should with dispute resolution. Circumstances can change in litigation just as they can in other transactions and you have to be sufficiently flexible and astute to adjust quickly to changing circumstances which may require settlement, some other form of dispute resolution or even discontinuance in certain circumstances.

6.  Choose the Right Forum for the Resolution of your Dispute
There are many forums for the resolution of IP disputes. There are the courts of England and Wales, those of other parts of the UK and the courts and tribunals of other countries. There are also Intellectual Property Office tribunals for some patent, trade mark and registered and unregistered designs disputes, the Boards of Appeal of OHIM (the EU design and trade mark registry) and the EPO (European Patent Office). There are the domain dispute resolution panels for the determination of generic and national top level domain name disputes. There are the IPO examiners' opinions which I have mentioned above for certain patent disputes and there will soon be an opinions service for registered and unregistered design disputes. There is also old fashioned arbitration and mediation. Each of those forums has its advantages and disadvantages and you should seek specialist advice or at the very least carry out extensive research before launching proceedings.

7.  Choose the Right Legal Adviser
For most cases two sets of skills are needed:
  • advocacy, and
  • the ability to conduct litigation.
Advocacy includes presenting cases to a judge or arbitrator, examining witnesses, drafting statements of case, application notices, witness statements and skeleton arguments. Until the Courts and Legal Services Act 1990 higher court advocacy was the preserve of barristers but now other professionals have rights of audience. Conducting litigation means corresponding with the court and other side, filing and serving statements of case and other documents, interviewing witnesses, drawing up lists of, and exchanging, documents (including emails, texts and other electronic messages) and generally preparing the case for adjudication. Traditionally this work was done by solicitors but now barristers and patent and trade mark attorneys as well as other professionals can apply for the right to conduct litigation. Look beyond law firms' websites and brochures to discover expertise. Try to research their decided cases and publications and choose the advocate and litigator whose expertise most closely matches your needs.

8.  Do not fight Unnecessary Battles
If you are a claimant and you think the other side will not be able to compensate you in damages if you win your case you may get an order from the court known as an "interim injunction" forbidding the defendant from doing something that would infringe your IP rights until trial or further order. These are in the discretion of the court and they don't come cheap. You have to apply quickly and promise to compensate the other side for any loss or damage it may sustain if it transpires that you should never have got the order. Conversely, if you are a defendant and fear the other side can't pay your costs if you win you can get an order for the claimant to pay funds into court as security for a costs order against you. There are many other interim applications that you can make - summary judgment on the basis that the other side is unlikely to prevail at trial, specific disclosure of a document, striking out parts of the other side's statement of case and sanctions for non-compliance with a rule or order. Such applications are very expensive and can delay the progress of a case. Sometimes they are necessary but as often as not they are not and every effort should be made to avoid them. If you are a defendant do not resist reasonable requests just for the sake of it. Work out ways of meeting the other side's legitimate needs while safeguarding your interests.

9.  Comply with the Rules and Directions of the Court
This may sound like stating the obvious but it is amazing how many litigants fail to do this. The courts have extensive powers to penalize some of which are quite drastic. For instance if you fail to file a costs budget in time you will be deemed to have filed a budget requesting reimbursement only of your court fees and you will be precluded from recovering your counsel and solicitors' fees which could amount to tens or even hundreds of thousands of pounds.

10. Keep Talking
Even if settlement negotiations fail you are still likely to have much to discuss with the other side. It is in your interest to agree facts, define and limit issues and other procedural matters because it simplifies the process and reduces the bills you may well have to pay. One of the reasons for instructing solicitors and counsel is to keep open a channel of communication between the parties. As I said above, circumstances can change for both sides and you are more likely to learn of those changes if you keep in touch with your opponents.

If you want to discuss this or any other matter connected with enforcement give me a ring on 020 7404 5252 during office hours or message me through my contact form. You can also contact me through Facebook, G+. Linkedin, twitter or Xing.

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