07 March 2015

How to enforce your IP claim after court fees sky rocket

A patent or other intellectual property rights is essentially a right to bring a lawsuit. With a few limited exceptions, it is not a crime to infringe an intellectual property right. Patentees and other intellectual property rights holders have to enforce their rights themselves which generally means bringing proceedings in the civil courts.

1.  Court Fees are about to Sky Rocket

Unfortunately, the costs of issuing proceedings in the civil courts of England and Wales are about to soar through the roof. Art 2 of The Civil Proceedings and Family Proceedings Fees (Amendment) Order 2015 which is currently before Parliament requires those claiming more than £10,000 in damages or other monetary relief to pay 5% of the value of the claim up to a cap of £10,000.  At present, the most that anyone has to pay for issuing a claim is £1,920. That will increase to £10,000 after the Order is made - a whopping £8,080 or 421%. It is even worse for those with modest claims. Those seeking damages of £190,000 will have to pay £9,500 an increase of £8,185 or 622%.

The peers including the law lords have protested at these new fees as have the senior judges and lawyers (see Senior judges attack government's planned court cost rise 4 March 2014 BBC and Wednesday in Westminster 4 March 2015) but governments tend to get their way and the draft order will go through. So what should inventors and other small businesses do now?

2. Limit Damages Claim to £10,000

The issue fees for claims under £10,000 remains unchanged. They increased quite a bit last year but they will not be going up this time. If your claim for damages is between £5,000 and £10,000 the issue fee will still be £455. Limiting claims to £10,000 is not nearly as bad as it sounds because the principal relief that an intellectual property owner wants is an injunction - that is to say, an order of the court to do or refrain from doing something on pain of a fine or imprisonment for disobedience. Inquires as to damages and accounts of profits are very rare in IP litigation. I can count on the fingers of one hand the number of cases in which I have been instructed that have actually gone all the way to a full-blown inquiry.

Happily, there is now a court for small intellectual property claims, namely the Intellectual Property Enterprise Court (formerly the Patents County Court) small claims track. The judges of that court will hear claims for all types of IP cases except those involving patents, registered designs, registered Community designs, semiconductor topographies and plant breeders' rights where the damages or other pecuniary relief is £10,000 or less. I have written a lot about that tribunal, given a lot of presentations and even argued a case before it. You will find links to those articles at Patents County Court - the New Small Claims Track Rules 20 Sept 2012 NIPC Law. The great advantage of the small claims track is that the procedure is very simple. There is usually only one hearing which lasts less than half a day and the judge can award an injunction and damages at the same sitting. Something that can't be done in any other court. The risk as to costs is limited to a few hundred pounds though by the same token you can's recover more than a few hundred pounds if you are successful.

Even if your claim is in relation to patents, registered or registered Community designs, semiconductor topographies or plant breeders' rights you can still limit your damages claim to £10,000. Your case will be allocated to the multitrack which means that your liability for costs will increase but you will still only be charged £455 for issuing proceedings and recoverable costs in the multitrack are limited to £50,000.

3.   Bring your Case in the Intellectual Property Office

The hearing officers of the Intellectual Property Office have extensive jurisdiction in patents, trade marks, registered designs and unregistered design rights disputes and recoverable costs in proceedings before hearing officers are limited in most cases to a fixed scale (see Tribunal Practice Notice 2/2000 Costs In Proceedings Before The Comptroller).

In patients, for instance, hearing officers can decide who is entitled to a patent or to be named as an inventor, they can amend or revoke a patent, they can declare that a patent has not been infringed and they can decide compulsory licensing and licence of rights disputes. They can even hear infringement claims with the consent of the parties under s.61 (3) of the Patents Act 1977 though that has rarely if ever happened, possibly because hearing officers cannot grant injunctions.

In trade mark disputes hearing officers can revoke or declare trade mark applications invalid.

In designs, hearing officers can cancel design registrations and determine the conditions for licences of right.

Appeals from decisions of hearing officers in trade mark disputes can be made to an Appointed Person rather than the court who will generally award costs on the same scale as hearing officers.   S.10 of the Intellectual Property Act 2014 makes similar provisions in respect of designs.

4.   Seek an Examiner's Opinion

For the last 10 years, Intellectual Property Office examiners have delivered non-binding opinions as to whether a British or European patent is valid and whether it has been infringed.  This has proved very popular and their jurisdiction has recently been extended to other patent disputes and will shortly extend to designs. The cost of an examiner's opinion remains at £200.  In some cases, an authoritative opinion is all that is needed to resolve a dispute. In cases where the losing party refuses to back down a favourable opinion should make it easier to get after-the-event insurance or litigation funding.

5.  Use established Arbitration or other Alternative Dispute Resolution Schemes where they exist

Probably the best-known schemes are the ICANN Uniform Domain Name Dispute Resolution Policy for generic top-level domain name disputes and Nominet's Dispute Resolution Service for domain name disputes in the .uk top level domain name space. For a few hundred pounds trade mark owners can obtain an order for the transfer of a domain name in less time than it takes to exchange statements of case in many intellectual property disputes. Costs are irrecoverable but then you don't usually get all your costs back on a detailed or summary assessment anyway.

6.  Insert Dispute Resolution Clauses into your Licences and other Agreements

If you don't want to go to court to resolve a dispute with your licensee, joint venturer or other associate you can insert provisions for mediation, expert determination or arbitration into your licences or other agreements.

7.  Take out Before-the-Event Insurance

Although the 622% and 421% increases that I mentioned above are enormous, they are not a large part of the total cost of litigation and should not increase before-the-event insurance premiums greatly. There are some good IP packages on the market, particularly the IP Insured package which Sybaris IP offers to ACID members.

8.  On the Horizon

The British government has signed an agreement to establish a Unified Patent Court with exclusive jurisdiction to determine disputes over European patents and passed enabling legislation to implement the agreement. Art 71 of that agreement restored legal aid for inventors which was taken away from them by paragraph 1 (h) of Schedule 2 to the Access to Justice Act 1999. The Court will consist of a Court of Appeal in Luxembourg and a Court of First Instance with a central division based in Paris with a section in London. The Court will have its own rules and charge its own fees. So long as this country remains in the EU it is the best news for private inventors for 20 years.

Should anyone wish to discuss this article or IP law in general, he or she should call me on 020 7404 5252 during normal office hours or message me through my contact form.

No comments: