Knight-capped

This Kat (who is an avid fashion fan) has been looking forward to the final instalment in the proceedings between Dame Vivienne Westwood and rogue trader Mr Anthony Knight. On Wednesday HH Judge Birss QC handed down his costs judgment after a prior successful claim by Dame Vivienne against Mr Knight in the Patents County Court (PCC): Westwood v Knight [2011] EWPCC 11 (11 May 2011). The judgment is of particular importance for it is the first time that the new costs capping provisions in the PCC (which commenced on 1 October 2010) was to be applied to the conduct of (more or less) an entire case.

For those who have missed the story so far, Mr Knight claims to be a fashion designer from Manchester who sells clothing and accessories online (both through his own websites and eBay). Many of the marks used in relation to his goods were the same or substantially the same as marks associated with Dame Vivienne. Not surprisingly, Dame Vivienne was far from impressed and threw the proverbial book at him by commencing actions for infringement of registered trade marks, passing off, infringement of copyright and declarations of invalidity of certain of Mr Knight’s registered trade marks.

After a one day trial in the PCC, Judge Birss found that Mr Knight had engaged in trade mark infringement and passing off and in some cases infringed Dame Vivienne’s copyright: Westwood v Knight [2011] EWPCC 8 (22 March 2011). A number of orders were made against Mr Knight including for declarations of invalidity of Mr Knight’s registered trade marks, injunctions, an order for delivery up, rectification of the register of trade marks, orders dealing with various of Mr Knight’s domain names and an order for an enquiry as to damages (or account of profits). In His Honour’s opinion, the Dame Vivienne’s action was ‘substantially successful’ (at [236]).

The final issue for consideration was the amount of costs payable by Mr Knight as the unsuccessful party. The applicable stages and scale for a trial on liability is in Table A in Section 25C of the Costs Practice Direction (CPR Pt 45). It is as follows:

	Stage of a claim	Maximum amount of costs
1	Particulars of claim	£6,125
2	Defence and counterclaim	£6,125
3	Reply and defence to counterclaim	£6,125
4	Reply to defence to counterclaim	£3,000
5	Attendance at a case management conference	£2,500
6	Making or responding to an application	£2,500
7	Providing or inspecting disclosure or product/process description	£5,000
8	Performing or inspecting experiments	£2,500
9	Preparing witness statements	£5,000
10	Preparing experts' report	£7,500
11	Preparing for and attending trial and judgment	£15,000
12	Preparing for determination on the papers	£5,000

As Judge Birss points out (at [20]), the purpose of the limits is to aim for certainty for litigants. That is, before they embark on litigation to enforce their intellectual property rights (or defend themselves), the potential users of the Patents County Court system need to be able to make a prediction in advance as to their likely costs exposure.

Subject to narrow exceptions, the PCC does not permit recovery of costs falling outside the scope of these discrete stages. The exceptions are:

* 1. any pre-action costs properly attributable to a PCC stage (such as the Defence) should be recoverable under that stage (subject, of course, to its cap); and,

2.any pre-action costs incurred in the High Court (as happened in this case) are not caught by the PCC caps and are dealt with in the usual High Court manner.

As Judge Birss highlights (at [30]), one clearly cannot invent stages which are not in Table A and there is no scope for what are sometimes called the ‘general costs’ of the action to be added on. (Merpel cheekily senses that some litigators will gasp in horror at this prospect …).

Working through the reasoning of Judge Birss, the correct approach for assessing and awarding costs at trial in the PCC is as follows:

1. Costs should be grouped according to the discrete stages as listed in Table A.

2. Each stage is summarily assessed in the normal way (reduced to approximately 70% of the costs which were actually incurred).

3. Then each stage may be adjusted according to the Table A limit. If the summary assessment amount is within the Table A limit, then the award is that sum. If the summary assessment amount exceeds the Table A limit, then the award is reduced to the Table A limit.

4. Finally, a £50,000 overall cap is applied. If the adjusted amounts described in step 3 are less than £50,000, then the award is that total. If said adjusted amounts exceed £50,000, then the award is £50,000.

Judge Birss concludes his judgment on an optimistic note (at [46]):

‘The practical application of the costs capping system in the Patents County Court was always going to raise issues to be addressed. Having now conducted an assessment under the scheme, none of the issues raised so far are particularly problematic. The costs capping system works and I am sure it can be readily applied to all the intellectual property disputes in the Patents County Court’.

The IPKat is pleased to have a comment from two friends at Taylor Wessing (Jason Rawkins and Damian Simpson) who represented Dame Vivienne:

‘Today’s judgment lets other users of the new PCC know what to expect from its reformed costs regime and, in particular, clarifies some key issues we and the Court raised at the costs hearing. The Court’s approval of the approach we adopted (as we stepped into the unknown!) demonstrates that the Court’s pragmatic and robust attitude is extending into all aspects of its work. This can only be a good thing, for the Court and all its users’.

The IPKat hopes that Judge Birss’s optimism indeed becomes a reality and that the positive experience of those at Taylor Wessing can be replicated in other cases.

Merpel wonders when the name of the actual court is finally going to be changed so that it is no longer the great misnomer of the IP world. She suggests that even ‘The Merpel Court’ would be less confusing to users than the current name …

Earlier IPKat blog on the case here.
Nightcaps here and here