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.

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Thursday, 13 September 2012

Two years on, the Patents County Court is ready for change

The AmeriKat looking fondly over the
Rolls Building glowing in autumnal hues
This afternoon as the gentle autumnal light began illuminating the curling corners of the legal district of London, the AmeriKat was nestling into a seat on the 11th floor of 6 New Street Square (aka the offices of DMH Stallard) where she could fondly overlook the Rolls Building. The Rolls Building houses, amongst other things, the Patents Court and the Patents County Court (PCC) - the latter being the subject of this afternoon's seminar on the simplified IP court proceedings, the PCC and what's next.

Opening the proceedings DMH Stallard Partner, Nick Kounoupias briefly summarized the 2010 reform to the PCC which introduced a new streamlined IP litigation procedure with a £500,000 damages cap, a £50,000 costs cap and very active case management hearings. Rosa Wilkinson, Innovation Director at the UK's Intellectual Property Office (IPO) followed. Perching on a side-table in front of the audience, Wilkinson energetically explained that her enthusiasm for joining the panellists on this topic was due to the fact that she is the person responsible for connecting businesses with the IPO so that the IPO is positioned to deliver the tools that businesses need to deliver the growth objectives that are necessary for businesses and the economy. 

Rosa Wilkinson
Before making her way up to the 11th floor, Wilkinson earlier attended a meeting with the new IP Minister - Lord Marland - who replaces Baroness Wilcox following the recent ministerial reshuffle (see IPKat post here). Wilkinson stated that as a result of Lord Marland's experience, specifically citing his experience with Hunter Boots, he has a "real grip of what managing IP is like" and he understands "how, it is felt, expensive it is to develop a good IP strategy especially for an international company". As part of his continued role as the Chair of Council of Business Ambassadors, Wilkinson explained, that Lord Marland will continue marketing the UK to potential investors but will also use these opportunities to speak with other national governments on their policies on IP protection. With Lord Marland's ears burning somewhere in London (but plainly not on the 11th floor), Wilkinson turned to the task at hand - IP enforcement in the UK. She explained that many businesses were sceptical about their ability to enforce their IP rights, expecting that it would be so long, painful and expensive that it would not be "worth the candle to invest in new ideas." This is problematic given that 99% of the UK's businesses are SMEs and account for over half of the UK's employment. This is why SMEs needed "justice rather than a test of their wallets" and if the UK government could improve access to protection of IP, there would follow valuable economic growth.

The wonderful Dids Macdonald, CEO of Anti Copying in Design (ACID) turned her attention to a list of issues that she said needed to be addressed in UK IP enforcement to help businesses. She said that although IP had gone "from the fringe to the mainstream" it still required a great deal of awareness on the part of businesses. She said that, following Wilkinson's presentation, it was reassuring to know that Lord Marland is on board, but although she took solace in this and the fact that the UK is the only country in the world to have a dedicated IP minister, she wanted to see IP feature across all governmental institutions not just the Department for Business, Innovation and Skills (BIS) and the IPO. She said that much could be learned from the U.S. example, where President Obama has said that IP is the U.S.'s single most important asset and as a result IP features in almost all of the US trade missions. IP cannot, Macdonald said, be just important to BIS and the IPO - it must be important to the Treasury as well, for example.

Dids Macdonald
Citing a recent figure that gauged the value of designs to the UK economy at £33 billion, Macdonald began listing a few concerns and observations that businesses have regarding IP enforcement in the UK. She explained that there needed to be criminal sanctions for persistent copying of designs, like there is in other areas of IP, that the PCC needs to be sufficiently funded for administrative support so that the court could continue running efficiently, and that businesses have very little knowledge of the IP enforcement process and therefore there is still a great deal of education that is required. Concluding her brief speech, Macdonald cited a recent IPO paper by Alex Carter-Silk and Michelle Lewiston on The Development of Design Law Past and Future with exciting sections such as "The Protection of Sculptures, 1798 - 1814" and "Additional Cognitive Biases". Macdonald who, unlike the AmeriKat, rightly recognizes the value of the paper said that she very much hoped that the recommendations set out in Chapter 6 be adopted.

Finally, but by no means least, His Honour Judge Colin Birss QC and IPKat favorite was the final speaker. Judge Birss QC again reiterated the big changes to the PCC procedure in 2010 of which the cap on costs was the most significant. He said that in reality the costs awarded in the PCC are never more than £30,000; it is unusual to see costs of above £30,000 and in some cases they are much lower. The point of the new PCC procedure was that costs have to be proportionate to the case and the court was seeing this play out in practice, especially with the more "hands-on" case management process. It was important that businesses realize that the cost-cap does not mean that either party won't spend more than £50,000 on legal costs, its just that they cannot recover more than £50,000 from the other side.

HHJ Colin Birss QC
In 2008/2009 when the consultations and reports were being drafted as to whether or not the PCC system needed reform some contingents were skeptical that there was a demand for a low-cost, simplified IP court procedure. This was the view taken in the Jackson Report. This view was wholly incorrect because there has been great demand, if the judge's experience was anything to go by. The PCC has been incredibly busy with cases coming from every area of industry - from clothing to photography, pharmaceutical industry and film/television. Despite the amount of cases, the procedure has allowed quick resolution of disputes. In one patent case, the action was heard in the morning and decided in the afternoon and included cross-examination ["Can any EU lawyers cite examples that beat this timeline? Are there any examples in Germany?", asks the AmeriKat?].

Judge Birss explained that
"part of the image of the UK justice system is that it is slow and expensive, but what we are doing in the PCC has international significance. It is possible to have a UK approach to justice in a quick, efficient manner. This matters for proposals such as the Unified Patents Court..."
It also matters, said the judge, because in the UK our sense of justice is tied up with cross-examination (i.e by not allowing to say someone is a liar without the accused being afforded the opportunity to put the record straight by cross-examination) and disclosure (i.e. that a party is obliged to produce important documents). All of this, which can be assumed to be costly and slow, can be done in an efficient and proportionate manner. The PCC has shown it is possible to do this.

Judge Birss has also noted that there is a demand for an even quicker, more streamlined procedure for lower-value claims - such as those brought by photographers. These claims are generally low value but that does not mean that they are not important.  The PCC system, therefore, needs to accommodate to allow for access to justice for these types of claims.  As such, new rules for the PCC, to be published on 1 October 2012, will create a new small claims track in the PCC for claims up to £5,000 in value and will essentially act how the High Court small claim tracks works. The cases will be dealt with by the deputy judges of the PCC and the costs that are recovered are limited to the claim form issue fee and a few other small court fees. The small claims PCC track will deal with unregistered Community and UK design rights, copyright, database rights and trade marks (what about passing off?).

The illustrious panel this afternoon - courtesy
of Dids Macdonald
In closing, Judge Birss observed that, importantly, the PCC has allowed there to be credible threats. Previously, if a small entity threatened to bring proceedings for IP infringement against a larger entity the larger entity would just shrug it off knowing that it would be unlikely that the smaller entity would actually go through with suing the larger player due to costs, time and other risks that can be inherent in the High Court procedure. However, now, with the PCC procedure, it allows smaller businesses to make a credible threat and to be taken seriously by larger (or even similar-sized) infringers.

Questions from the floor rounded off the proceedings, with proposals from the audience such as plant variety rights being handled by the PCC (apparently they are not?) and infringement of software licences being actionable with a quasi-Money Claim Online type system. Judge Birss took the opportunity of the question session to explain that in certain cases, where the parties agree, he may be prepared to give preliminary views on the case during a Case Management Conference and/or deal with cases on paper (as was done in Hoffmann v DARE). A question from the PRS on whether the PCC was able to refer questions to the Court of Justice of the European Union (the PCC is able to refer) prompted the AmeriKat to ask how the PCC would deal with cost-capping in the case of a reference given that the cost-capping bands would not accommodate such a mechanism. Unfortunately, but not unexpectedly, Judge Birss replied that he could not answer that question.  Generally, the PCC would not (given its procedure) be a breeding ground for CJEU referrals although it is possible (and in fact there may well be one).  The AmeriKat wonders if any readers have any genius solutions as to how costs of a CJEU reference could shoe-horned into the cost-capping PCC rules.

It is no doubt that two years on the PCC has been a resounding success, in no short part due to its proactive and productive judge. But the PCC will not rest on its laurels and with the impending publication of the new procedure, the PCC is continuing to improve and adapt to the needs of its users. Now if only the Rolls Building did the same, we may just find more elevators (sorry, lifts) in the building to help get our small trial bundles up to the PCC's court room.

5 comments:

MaxDrei said...

Aside from the extremely important issue of choice of tools to get the facts of the matter revealed, we should (in the context of comparing the English way of patent litigation with the way the continentals do it) also distinguish on the issue how many "goes" does it take to get to a Decision that disposes of the matter and effectively ends the litigation. I mean, an interim decision by well-meaning Uncle Judge is not much use if, after it issues, the squabbling children just keep on going with their litigation. Litigation is for those situations where ADR can't deliver. Lowerr court judges who think they can force the parties to settle are thinking wishfully.

Compare, then, two systems. In the first of these, the first Decision is a full one, and appeal from it is usually futile. That first Decision issues within months rather than years.

In the second system, a bifurcated one, one track handles issues of infringement (sometimes very quickly) and the other does validity, with everybody appealing each successive instance till there is confluence of infringement and validity for the first time, at the Supreme Court.

Perhaps the current Samsung and Apple design patent litigation will provide useful facts for a comparative study. I do hope such a study finally displaces the Improver story, so old that the patent in suit had a priority date from before the date of birth of most readers of this blog.

Anonymous said...

"In one patent case, the action was heard in the morning and decided in the afternoon and included cross-examination" is that fast if the parties have been kicking their heals outside the court for a year or more?

MaxDrei said...

Comment #2 might reveal more about its writer (and his jurisdiction) than it does about litigating in England.

I don't have any experience in English patent litigation of this year-long process of "kicking heels" (but I agree that, wherever it happens, it can't be very nice for the kickers or the kicked). If he has suffered repeated bouts of it, well then no wonder Commenter #2 and his heels are sore, and not yet healed.

In which jurisdiction is the personal direct experience of Commenter #2, that fuels his heartfelt lament about kicking heels all through the year. Will he tell us? It would be interesting to know.

Chris Hoole said...

@AmeriKat - Passing off will be included (CPR 63.1 but not 63.2). The full statutory instrument can be found here:

http://www.legislation.gov.uk/uksi/2012/2208/article/10/made

Graham Spencer said...

As it stands, the PCC will handle plant variety rights provided they are on the UK register maintained by the Plant Variety Rights Office in Cambridge. This is quite useless, as the vast majority of plant breeders are now using Community Plant Variety Rights (and have been since 1995) - simply because the single Community PVR is far cheaper than multiple applications in EU member states. These are held on the register maintained by the Community Plant Variety Office in Angers, France. Apparently, it would require a new SI to add CPVR to the PCC remit - this has been done for Community trademarks and designs, so why not plant varieties?
PVRs are the Cinderella of IP rights - we never get invited to the Ball!

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