jeudi, décembre 16, 2010

United Kingdom: Changes to Patents County Court procedure aim for cheaper and quicker litigation

Changes to Patents County Court procedure aim for cheaper and quicker litigation

Contributed by Reynolds Porter Chamberlain LLP


Introduction

A revolution in UK court practices, aimed at cheaper and quicker IP litigation, occurred on October 1 2010, with the introduction of unprecedented changes to Patents County Court procedures. At the same time, a young judge - Queen's Counsel, Colin Birss - was appointed to the court.

The reforms, influenced by the Gowers Review of Intellectual Property 2006, herald a potentially paper-based and witness-free approach to litigation. The main aims, summed up by the authors of the change, are "first, an inherently cheaper procedure; secondly, limited and predictable costs recovery; and thirdly, proper differentiation from the High Court".

Streamlined procedure

The main feature of the new court procedure is a paper-based approach, with detailed statements of case the key to the court's jurisdiction. Statements of case must set out concisely all facts and arguments on which the parties rely. They will also stand as evidence, with a statement of truth to be signed by one person, or several people, who know the facts of the claim.

To reduce costs, case management is to be very tightly controlled. Following the filing of a defence, the court will identify the issues in the claim and decide what further steps the parties must then take to enable the court to decide the dispute. The presumption is that the court will make orders for the parties to do more work only on specific and identified issues that justify the additional cost.

Disclosure will be limited to certain specifically identified items. In many cases there is likely to be no disclosure. In addition, applications are to be dealt with without a hearing unless the court considers one necessary. If a hearing is necessary, it will be held in person only if that is cost effective or required by the interests of justice; otherwise, hearings will be by telephone or video conference.

The aim is that cases should go forward to trial solely on the basis of statements of case and oral submissions. Trials are to last no more than two days and parties may also consent to having the claim decided on the papers, to avoid even such a truncated trial. Paper hearings have been available to litigants for some time, but have seldom been used.

Historically, there have been applications to switch cases into the High Court. When asked to transfer proceedings to the High Court, the Patents County Court will consider whether the party can afford to bring or defend the claim elsewhere and whether, on the basis of the complexity and value of the claim, it can be appropriately determined in the Patents County Court. This begs the question of whether it is fair to entice people to pursue cheaper legislation, only for proceedings then to be transferred to the more expensive High Court.

Judge Birss has already decided that the new rules will not apply to proceedings commenced in the Patents County Court before October 1 2010.(1) The judge has also decided his first application for transfer of a case to the High Court. This was a dispute about a medical device between two large corporations, started before October 1 2010. In a lengthy judgment, the judge reviewed all the factors and law applicable to transfers and decided that a transfer to the High Court was appropriate.

A detailed new court guide is also being produced, with guidance on what should be included in statements of case and which cases are suitable for the reformed court. In the interim, the court's judgment in Westwood v Knight (a case transferred from the High Court to the Patents County Court) gives valuable guidance about what the court expects and will do to manage the cases before it.

Costs recovery

The Gowers Review suggested that small and medium-sized enterprises (SMEs) have been deterred from pursuing litigation in the past, for fear of unlimited costs in the event of defeat. As part of the move towards making litigation cheaper, there are now limits in the Patents County Court on the costs that can be recovered from the losing side. A £50,000 cap has been set on the amount that may be recovered in a case on liability, with a £25,000 cap on the maximum recoverable in an inquiry into damages or an account of profits.

In addition to these caps, scale costs have been introduced specifying the maximum amount that may be awarded at each stage of the proceedings (eg, £6,125 costs for particulars of claim).

The court may order further costs if a party either acts in a manner that amounts to an abuse of court process or behaves unreasonably. However, one suspects that such orders will be used sparingly in order to achieve the main objectives of these reforms.

Expected future changes

A number of other amendments will not come into force until 2011 because they require an act of Parliament. These include a potential £500,000 limit on the value of claims heard in the Patents County Court to ensure a focus on lower-value IP litigation. Such a limit, if introduced, would come into force in April 2011.

Other proposed changes include:

  • the renaming of the Patents County Court to the IP County Court, a name which reflects the jurisdiction it already has over all types of IP claim; and
  • the separation of the Patents County Court's office functions from those of the London County Court.

Comment

There has been general support for the reforms, and some commentators have welcomed them for bringing the Patents County Court into line with some tribunals in European jurisdictions. The changes are designed to increase the number of cases heard by the court and lead to quicker and cheaper resolution of claims. Parties with limited resources may now feel able to litigate where they would otherwise have felt constrained from taking action, knowing that their potential liability for the other side's costs is kept.

However, critics have argued that some IP owners will consider the reforms as swapping quality of justice for costs certainty. They suggest that the changes will prevent the court from having full access to the facts and some litigants will continue to litigate in the High Court to ensure a detailed review.

These caps may see more SMEs bringing or defending claims, but equally they may see larger businesses pursuing smaller infringers cheaply, where it would not have been worth pursuing them in the past.

Keeping expenditure below the recovery caps will be a challenge. The fact that a litigant is an SME is no bar to it patenting complex technology likely to blow the budget at the statement of case level, let alone the entire case. The judge is alive to this and may deal with it in the forthcoming guidance.

For further information on this topic please contact Matthew Littlestone at Reynolds Porter Chamberlain LLP by telephone (+44 20 3060 6000), fax (+44 20 3060 7000) or email (matthew.littlestone@rpc.co.uk).

Endnotes

(1) Technical Fibre Products Ltd v Bell [2010] EWPCC 011