For the half-year to 30 June 2014, the IPKat's regular team is supplemented by contributions from guest bloggers Alberto Bellan, Darren Meale and Nadia Zegze.

Two of our regular Kats are currently on blogging sabbaticals. They are David Brophy and Catherine Lee.

Monday, 26 September 2011

Unpaid costs re-revisited

The IPKat didn't really expect the issue of unpaid costs in contested IP proceedings to disappear (see earlier post, "Unpaid Costs Revisited", here). That will only happen once there are no more unpaid costs. He has however been giving some thought to the letter, below, from Andy Bridle (Bridle Intellectual Property Limited, Canterbury), who has acted on behalf of a client who was awarded costs following a vexatious trade mark opposition by a competitor and who has been unable to recover the costs award that was made in his client’s favour.  He writes:
"...  It occurred to us that the attorneys for the other side could be considered to be liable for their client’s costs, as they are acting on behalf of their client. On this basis, a complaint could be raised with the relevant regulatory body for the attorneys in question (e.g. the Intellectual Property Regulation Board, IPReg, in the case of UK attorneys), if the costs award was not paid by the attorneys for the other side, on behalf of their client. This should represent a cost-effective method of recovering a costs order, as firms would not relish the idea of being dragged before the body responsible for regulating their industry for alleged non-payment of costs incurred by their client. It would then be up to the attorneys in question to recover this cost from their client in the same way that they would recover the cost of an official fee paid on behalf of their client.
I suspect that most firms would start to ask clients for funds to be held on account when asked to represent them in such proceedings, to cover the possibility of a costs award being made against their client. This should make parties think seriously before proceeding down the opposition route.

Of course, there exists the possibility of a party bringing proceedings without having professional representation. In such cases, it would be a relatively straightforward matter to increase the official fees in such cases to provide for a proportion of the fee being held by the Office in the event of a costs order being made against that party. Thus the fees payable by a party represented by a professional representative would be £X (or Euros) and the fees payable by a party representing itself would be £X+Y, where £Y would be refunded in the event that the party in question is successful or used as payment (or part payment) of the costs order in the event that a costs order is made against them. If the party is defending an opposition filed against them, then they would simply pay £Y when filing their counterstatement if they choose not to be represented.

The USPTO seems to be able to cope with a two-tier charging system (small entity fees and large entity fees), so such a system which charges different fees depending on the nature of the party in question should not be overly difficult or expensive to manage.

In terms of our experience, we are seriously considering raising a complaint with IPReg that the firm of attorneys representing the other side are breaching their professional duty by failing act on behalf of their client in settling the costs award that was made against their client".
Both Andy and the IPKat (who is mildly annoyed that he didn't think of putting this on the list of options in his recent poll) would like to hear from readers in the UK and beyond as to whether they think this might be a viable remedy to a problem which, though small in global terms, has a disproportionate power to annoy and frustrate successful parties in opposition proceedings.

Meanwhile, from Graham Burnett-Hall (a partner in Marks&Clerk Solicitors LLP) comes the following suggestion:
"With regard to the non-payment of costs relating to Community trade marks, I suggest a procedure by which, if any costs order was not paid within 28 days, the creditor could have the details of the debtor added to a list to which all credit rating agencies would be notified, or at least have access. The prospect of being given a bad credit rating should encourage prompt payment".
This Kat, who has at times been infuriated by the difficulty of raising credit even though he is the proud possessor of a perfect credit rating that stretches back into the mists of antiquity, would hate this fate to happen to him, but he wonders whether it would have the desired effect.  Again, readers' thoughts are welcomed.

6 comments:

Filemot said...

while I entirely agree that it is the duty of any professional representative to explain the costs obligation to their client and to pass on requests for costs, it is a step too far to give them personal liability. For that, it would be necessary for regulated representatives to insist on holding client funds. If you suspect that the representative has been conducting the case on a frolic of his own without specific instructions, there might be an argument thatthis did not display the necessary integrity or duty to act in the interests of justice. However, such frolics are far easier to suspect than to prove.
I wonder if Mr Bridle's adversary representative was paid his own fees. In any event, the money claims online procedure is very straightforward and a great deal easier than making complaints of professional negligence.
Frankly, many representatives don't ask for the costs to be paid. Most organisations need some sort of invoice type document to facilitate payment and a costs order generally doesn't fit the requirement for an invoice.

Anonymous said...

I think Andy's suggestion is a very good idea and should be viable. I also think many attorneys will vehemently oppose this idea (one very active participant in the recent Marques conference springs to mind, and I know many others who share his view).

Just for the record, the Serbian IP Office also has a two-tier system where patent filings are concerned. Natural persons, as opposed to legal entities, only pay 50% of some official fees (such as the fee for filing a national patent application). Until fairly recently, they had to pay only 10% of the official fees. One of the reasons for the change in proportion of the official fee for natural persons was apparently the fact that a large number of fairly nonsensical (is that a word?) patent applications were being filed by various would-be-inventors, which placed an undue burden on the Examiners. (Not that I think that excellent inventions cannot arise from something that initially seems like nonsense….Also, examining them must have been great fun!)

This solution would seem to have the opposite effect – it may discourage groundless oppositions and leave the Examiners more time to deal with more serious issues.

Anonymous said...

"It occurred to us that the attorneys for the other side could be considered to be liable for their client’s costs, as they are acting on behalf of their client."

What is the limit to this train of thought? Liability for costs in PCC proceedings? High Court? Court of Appeal? Supreme Court? ECJ?

There is already a solution (to an extent) made available by the UKIPO, which publishes details of those parties who do not pay their costs orders on its website - the idea being that, particularly for repeat or serial 'offenders', security for costs will be that much easier to obtain on the basis of such evidence.

The page is at:

http://www.ipo.gov.uk/t-unpaid-details

Besides the matter of making clients aware of their obligations as regards costs from the onset, this page of the UKIPO should be the first port of call of the practitionner as soon as contentious proceedings are contemplated in the UK/beforte the UKIPO.

Filemot said...

The unpaid costs order page is no use at all as it gives insufficient details for any credit reference agency to use. If we look a the latest case a Geoffrey Thorpe owes £3100 but there is no link to the case or his details and I could not find them, so this is just pointless. Mr Thorpe is in no way incomoded by this.

Anonymous said...

At a SWAG (simple wild a55 guess), have a look at UK Trade Mark 2424755.

Took me less about 15 seconds to find it, searching for any TMs owned by a Mr Geoffrey Thorpe.

Not cast-iron, for sure, but certainly sufficient to correlate a client (or the other side's) name and address.

Anonymous said...

The above said (about Mr Thorpe), I certainly agree that the page could do with more/better information, rather than (seemingly) rely on imprecise 'detective work'.

For starters, each entry should feature at least the application/registration number and the party's (clickable) ADP. Surely, implementing this technically cannot be that difficult?

To my mind, and within the context of the discussion, a 'better' solution may be to 'automate' the naming & shaming system. For instance, with the promulgation of a reasonable "default compliance period" (say, 3 months?) within which the party sentenced to costs must provide payment evidence to the UKIPO (/OHIM), else it automatically goes onto the name & shame list.

Again (momentarily putting aside legal implications, however), implementing this technically should not prove that difficult.

Subscribe to the IPKat's posts by email here

Just pop your email address into the box and click 'Subscribe':