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Wednesday, 9 January 2008

Hungary goes for the PLT, while Monsanto and Cargill make a meal of costs

The World Intellectual Property Organization has today issued PLT Notification No. 19, which brings news that the Republic of Hungary, on 12 December 2007 deposited its instrument of ratification of the Patent Law Treaty (PLT), which was adopted at Geneva on 1 June 2000. The PLT entters into force for Hungary on 12 March 2008.

Text of Patent Law Treaty here
Contracting parties here
Great Hungarian inventions here
The greatest Hungarian invention here


The IPKat never quite got around to posting the decision of the Patents Court for England and Wales in Monsanto Technology LLC v Cargill International SA and Cargill plc [2007] EWHC 3113 (Pat) -- a decision handed down by Lord Justice Pumfrey on 21 December, just days before his premature demise. This was a decision on costs, following an earlier trial (noted here by the IPKat).

In essence, the court had to determine costs arising out of a patent infringement action brought by Monsanto which, to some extent, that company won -- though it failed on the validity of one of its claims and, in relation to infringement, also lost on one relatively short construction point regarding the meaning of the word "isolated". The costs were not insignificant: £2.2 million for Monsanto and £1.9 million for Cargill. so how should they be split?

The judge concluded as follows:

* Before the current Civil Procedure Rules (CPR) came into effect, the court exercised general control over costs through a process of certification. Following the CPR's abolition of the requirement for certification the court was required, in awarding costs, to identify the overall winner of the proceedings.

* Except in the most exceptional circumstances, the overall winner was likely to be entitled to payment of all costs that were not, or could not be, allocated to a particular issue.

* As to costs that could properly be allocated to issues on which the overall winner had nevertheless lost, two questions had to be asked: (i)should the winner recover his costs of that issue? (this used to be answered by the old process of certification) and (ii) should he pay the otherwise unsuccessful party's costs incurred in respect of that issue?

* In answering question (ii), one should have regard not just to the reasonableness in raising the issue at all, but to whether there was something more than conduct justifying his being deprived of the costs of the issue in the circumstances.

* The further one moved away from the general rule that the unsuccessful party should pay the costs of the successful party, an increasingly strong justification was required. Where such justification existed, it was convenient to treat both parties' costs arising from an issue as being equal to and double the deduction. Thus if a party failed to recover costs of an issue amounting to 15 per cent of his total costs, he would be deducted 30 per cent of his costs if the court concluded that he should also pay the costs of that issue to the other side.

* Applying those principles in this case Cargill, who had won on the infringement issue only on the construction point, did not receive its costs but had to pay half Monsanto's costs on that issue. Monsanto would also received its costs on the issue of validity, subject to a deduction for the single claim on which it failed.
The IPKat is always saddened by litigation that, in seeking to resolve costs issues, has the effect of increasing them. There is no comfortable way for judicial discretion to be preserved while also reducing the level of uncertainty that causes parties to ask for that discretion to be invoked.

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