Piddle Patch vs Oui Oui Patch: From case management to the Marleasing principle

This post concerns extremely unusual subject matter to reach the Court of Appeal. The case is Makeality Ltd v City Doggo Ltd & Anor [2025] EWCA Civ 400 and, despite the presence of dogs, is worthy of this Kat’s attention. It concerns a dispute about litter trays and case management but involves important questions about the role of appeal courts and the ongoing relevance of EU law in the UK.

 

The case

In short, the claimant (Makeality) owns a trade mark for PIDDLE PATCH, which is registered in relation to litter boxes containing real grass and litter trays more generally. The business was featured on the BBC programme, Dragon’s Den. It commenced proceedings against a competitor (City Doggo), which was selling a competing product called the “Oui Oui Patch”, and its director. City Doggo has also made some use of the words "piddlepatch"/"Piddle Patch"/"PiddlePatch" in various ways.

Makeality issued a claim in the IPEC (the IPEC being a division of the UK High Court tasked with handling less-complex IP claims) claiming for infringement under sections 10(1), 10(2) and 10(3) of the Trade Marks Act 1994. City Doggo denies the claim, saying that the uses of ‘Piddle Patch’ etc. were de minimis and had been removed, that the mark is descriptive, and that there is no infringement. All pretty standard IPEC-fare.

Then came the case management conference, prior to which City Doggo had applied to have the case transferred into the IPEC ‘small claims track’ (“SCT”). This is a track designed for parties to litigate very small cases (<£10,000 in damages) without lawyers, and with very low (almost insignificant) costs consequences for the losing party. Where the parties are legally represented (as in this case), this would mean that the successful party would recover a tiny fraction of its legal costs.

The judge, who is the presiding judge of the IPEC, and enormously experienced in hearing and managing disputes in that court, agreed to transfer the case to the SCT. He did so based on the evidence from City Doggo that the damages would be less than £10,000. Makeality had been challenged to provide evidence that the damages would exceed that amount, but had apparently not done so.

 

Up to the Court of Appeal

The decision to transfer a case from the normal IPEC multi-track is in this Kat’s experience, very unusual. Even more unusually, this case management decision was appealed by Makeality. The appeal was on the basis that (1) the factors pointed towards a level of complexity that was not suitable for the SCT, and (2) the case being in the SCT, and the consequent denial of any chance of recovering anywhere near the level of costs it would incur, violated Article 14 of Council Directive 2004/48/EC of 29 April 2004 on the enforcement of intellectual property rights (the "Enforcement Directive"), which was not specifically implemented in the UK. The appeal was heard by Arnold LJ, who also gave Makeality permission to appeal despite his view that it was “obviously undesirable for further costs to be expended on the issue of track allocation”.

 

Ground 1: Not suitable for the SCT

Arnold LJ confirmed that first instance decisions on case management may only be overturned on limited grounds. While Makeality pointed to factors supporting its position that the case should have been in the multi-track, Arnold LJ rejected this ground. He seemed particularly persuaded by Makeality’s failure to produce evidence to support its case that the claim was worth over £10,000. While Arnold LJ accepted that the case had been pleaded in a way that made it quite complex, HHJ Hacon was entitled to take the view that it could be managed fairly in the SCT.

Ground 2: Ability to recover costs

Costs recovery is limited in even the IPEC multi-track (up to £60,000 for the liability phase, and £30,000 for quantum). In the SCT, costs recovery is essentially not available. As Makeality sought to rely on Article 14 of the Enforcement Directive, Arnold LJ considered the UVP case where the CJEU had decided that reasonable legal costs should be recoverable, with a flat rate significantly below the likely costs being contrary to Article 14. However, the Enforcement Directive did not have direct effect, even pre-Brexit (when will we stop having to mention Brexit?), meaning that it could only be relied on as between private parties under the Marleasing principle. Arnold LJ held that the costs rules in the SCT could not be read in line with the Enforcement Directive.

More importantly, and much more interestingly, Arnold LJ held that following the enactment of the Retained EU Law (Revocation and Reform) Act 2023 ("REULA") meant that the Marleasing principle no longer applies. This could have a significant impact on other areas of law, such as the long-running debate over the applicability of Cofemel and the related case law (save as insofar as that case law is already reflected in UK law).

Paws for thought

This is the latest in a string of appeals from the IPEC to the Court of Appeal over the last 18 months (including Safestand, Morley’s, Thatchers, M&S, and Yours Naturally). As was discussed at the Retromark conference [IPKat summary here], there could be a number of reasons for this, but this Kat wonders if these appeals, while generating a sizeable amount of interesting appellate decisions, might be undermining the IPEC.

The IPEC enables parties who otherwise would not or could not litigate disputes, to get in front of a judge fairly quickly and with limited risk. It is crucial to the administration of justice in our field, and particularly important to the SMEs for which it was designed. The restrictions on its procedure mean that justice is sometimes slightly rough, but that is the price paid to make it work.

When its decisions are revisited by the Court of Appeal, with a great deal more time than was available to the first instance judge, it is not surprising that decisions are sometimes found wanting. Even where the first instance judgment is upheld, the mere fact of an appeal inflates costs and can delay proceedings.

There is clearly a balance needed; wrong decisions should be reversed. However, if IPEC decisions are to be so readily revisited by the Court of Appeal, perhaps the procedure of the IPEC itself needs changing. Is a 2-day hearing limit appropriate? Should parties be limited to a smaller number of causes of action? Should the volume of disclosure be further curtailed? That is probably a debate for another day.