‘Solicitor and own client’ Patents Act costs order is not the same as indemnity basis

An order for costs under section 65 of the Patents Act 1977 is not the same as indemnity costs and should not be referred to as such, a High Court judge has said.

Section 65 provides that costs in patent disputes should be assessed inter partes as if on a solicitor and own client basis and, in Optis Cellular Technology and Ors v Apple Retail UK Ltd and Ors [2020] EWHC 3248 (Pat), there was a debate about how this should be expressed in the order after the claimants were successful in their patent infringement claim.

Mr Justice Birss said: “Broadly it is a more generous basis than either an indemnity or standard basis, however, as Mr Burkill [for the defendants] points out, although the essence of the approach on solicitor and client assessment starts from an indemnity basis-type assessment, the precise way in which the costs are assessed is not the same because of the provisions of rule 46.9(3).”

CPR 46.9(3) provides that the presumptions in a normal indemnity basis assessment operate in a different way. “These show why it is generally fair to say that they are more favourable to the receiving party than assessment on an indemnity basis. However, that is not entirely so, and in particular, (3)(c) is a different kind of presumption from the one that one would apply in relation to an indemnity basis. So the important point is that this is not exactly the same as costs on an indemnity basis.”

This gave rise to “a point of detail” on the operation of rule 44.3(4), which says that where the court makes a costs order without indicating the basis on which they are to be assessed, or says they are to be assessed on a basis other than the standard or indemnity basis, “the costs will be assessed on the standard basis”.

The claimants were concerned that this meant the order needed to refer to the indemnity basis, even though that was not the basis on which costs were being ordered.

Birss J said: “To resolve this possibly minor drafting conundrum, the order I am going to make will recite that the costs will be assessed as between solicitor and own client in accordance with section 65(2) of the Patents Act 1977 and rule 46.9(3) of the Civil Procedure Rules, if not agreed.

“That way, the order will be clear about the basis on which the costs are being assessed. In my judgment, that is the right approach and that such an order is not overridden by rule 44.3(4)(b).

“I believe that, armed with this decision and an order drafted in that way, [the claimants’] fears about what might happen in the future in relation to costs assessment will not materialise.”

Mark Chacksfield QC and Thomas Jones (instructed by EIP Legal & Osborne Clarke) for the claimants. Guy Burkill QC and Brian Nicholson QC (instructed by WilmerHale) for the defendants.

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Costs News
Published date
02 Dec 2020

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