Aim is to improve access to justice for less complex and valuable cases that are nonetheless too big for the IPEC
The pilot of a capped costs scheme for claims which are issued through the shorter trial scheme in the Patents Court began this month with the support of specialist lawyers.
New Practice Direction 51ZD says the aim of the three-year pilot is “to improve access to the Patents Court for litigants with cases which are less complex and less valuable but for which the Intellectual Property Enterprise Court (IPEC) is not appropriate”.
While costs are capped at £60,000 in the IPEC, the cap in the Patents Court will be £500,000, with a £250,000 cap on any quantum phase (plus VAT).
Court fees, enforcement costs, wasted costs and “additional costs where the paying party has behaved unreasonably” can also be recovered.
Where a party is entitled to costs for a part of the proceedings in question, “the court will apportion the costs cap taking into account that part of the proceedings in relation to the whole”. Part 36 applies, subject to a similar apportionment exercise and the overall cap. Where an order for costs is made pursuant to rule 36.17(4), the total of the costs awarded cannot exceed 125%.
The pilot was recommended in last May’s Civil Justice Council costs working group report, which said there was widespread support for the idea. It said that, in addition to backing from the Intellectual Property Bar Association, the Intellectual Property Lawyers Association and a number of individual law firms, “a notable supporter of the proposal is IP Federation, which represents United Kingdom industry. Their view is that the proposal would improve access to justice for mid-tier patent disputes”.
Martin Noble, a partner at national firm Freeths, said the pilot was “very welcome news to many SMEs who want certainty over their overall costs exposure when litigating a patent case.
“It has been reported that the introduction of the IPEC’s costs capping regime led to a surge in new cases (damages are limited to £500,000 in IPEC), but this did not lead to a decrease in the number of High Court patent cases. So it did meet a pent-up demand and this is what may happen in this case.”
Zoe Albon, an associate at London firm Mishcon de Reya, added: “The shorter trial scheme will now potentially be a more attractive option for litigants in certain patent disputes, which will need to be taken into account when considering patent enforcement and challenge strategies, including alongside potential litigation in the Unified Patent Court.
“The next key question is when, or if, the pilot should be extended to other areas of IP, with suggestions that it could extend to all STS cases in the IP list.”