Cost-Effective Patent Litigation in the UK – the PCC Relaunched

This article was included in our Winter 2010 edition of Inside IP magazine.

Background

When the Patents County Court (PCC) was originally set up in 1990, it was done with the aim of bringing about a real change to the world of patent litigation in the UK.  In theory, this was supposed to be a cheaper alternative to patent litigation in the High Court and make justice accessible to all, particularly to individuals and small and medium-size enterprises (SMEs).  Twenty years on, the PCC is yet to live up to the hype everyone was expecting.  So what went wrong?

This was effectively the question put forward to the Intellectual Property Court Users Committee in 2009, which concluded that, in practice, the PCC was not in any way differentiated from the High Court and was therefore not an attractive alternative to the High Court.  In particular, there was no difference in procedure or costs between the PCC and the High Court.  The PCC had the same jurisdiction and procedural rules as the High Court, which meant that the proceedings in the PCC and the High Court were managed in exactly the same manner.  As a result, the PCC did not always provide a cheaper or faster service.  Another significant factor was the potential cost consequences: since the general rules on costs (i.e. loser pays) applied to the PCC cases as it does to High Court cases, SMEs and individuals were deterred from bringing proceedings because of the risk of having to meet other side’s adverse and substantial costs (as well as its own) if unsuccessful.  Effectively, access to justice was being denied to those for whom the PCC was originally established.

Thus, the Committee, with the backing of Lord Justice Jackson (Review of Civil Litigation Costs, 2009), recommended a set of sweeping changes to the PCC with a view to creating a new, streamlined and cost-effective IP litigation forum.

These important changes – mainly relating to procedure and the costs regime of the PCC – came into effect on 1 October 2010.  Many of the procedural changes are influenced by litigation procedures in other European countries and the European Patent Office, so making it much easier for patent attorneys to act as litigators.

Limit on recoverable costs

The most eye-catching change relates to recovery of costs by the winning party.  Whereas before the PCC followed the general English court procedural rules which provided that the losing party had to pay all reasonable costs incurred by the winner (usually 70-80% of winner’s costs), the new rules have now put a cap on the costs recoverable by the winning party. As a result of the new rules, the costs recoverable by the winner are now capped at £50,000.

Procedural changes

Other important changes include:

• Detailed submissions (statements of case): The parties are now required to set out all the facts and arguments upon which they rely in detail, from the outset.  The aim is that the statements of case should truly represent the basis on which the case would go to trial, and to deter the parties from modifying or adding further arguments at a later stage – a litigation strategy commonly used in the past.  The changes to the statement of case are openly based on the type of submissions that are usually made before the European Patent Office (EPO), so that patent attorneys are well placed to draft these submissions and to conduct proceedings before the PCC.

• Tightly controlled case management: The new rules remove certain procedures (and associated costs), such as disclosure, witness statements and experts’ reports, that are considered to be excessive.  This is in contrast to the previous position where evidence in the form of both witness statements and experts’ reports was required as standard.  The aim is to allow, where possible, the case to proceed based on the submissions alone and to shorten the proceedings.

• Shorter trials: The case will be determined based on documents alone (with the parties’ consent) or at a trial which should not last more than 2 days.

Further changes

It is also intended (when the relevant legislation is passed next year) that the level of damages that may be awarded in the PCC will be capped at £500,000.  As a result, only cases that are valued at £500,000 or less will make it to the PCC in the future.

Practical consequences

So what does all this mean? In short, if the new rules are implemented and enforced as intended, then litigation in the PCC should become quicker and cheaper.  Furthermore, it will also be a welcome addition to different ways of conducting patent litigation in the UK – e.g. as an alternative to Patent Office litigation and High Court proceedings.  Also, from a commercial perspective, the cap is hugely significant in that any potential litigant would now have much more confidence about their maximum costs exposure.

Conclusion

It remains to be seen how the PCC enforces the new rules in practice.  If the procedural changes really work as intended, the new PCC will not only be a more attractive alternative to High Court litigation in England, but also an alternative to other European jurisdictions such as Germany.

Patent litigation at Venner Shipley

We are well-placed to give strategic litigation advice, as well as being able to handle any litigation in the new PCC.  Two of our partners, Jan Walaski and Tim Jump, hold patent attorney litigator certificates entitling them to represent clients in the High Court.  We also have two trade mark attorney litigators, in Kate Széll and Claire Birro.  In total, five of our professional staff qualified as solicitors prior to joining our firm, and these and our other attorneys have extensive commercial and intellectual property litigation experience between them.

Our qualifications and experience allow us to conduct IP litigation throughout the UK court system either alone or, according to the demands of the case, in conjunction with other IP professionals, including solicitors and barristers, with whom we have well-established relationships.

Jae-Woo (Jae) Park

Jan Walaski 29 Nov 2010

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