05 March 2012

The New Small IP Claims Jurisdiction

On 15 Nov 2011 the government announced that a new small claims service will be introduced at the Patents County Court (PCC)  with a view to helping small and medium sized businesses to protect their copyright, trade marks and designs.(see the press release "New Intellectual Property Court process will boost UK business"). Such a service had been recommended by Jackson (Review of Civil Litigation Costs, Final Report Dec 2009 at page 257) and Hargreaves ("Digital Opportunity, A Review of Intellectual Property and Growth", Final Report page 85).  Gowers had favoured a slightly different service, namely a fast track scheme for lower value IP cases though his 54th recommendation went no further than a review by the Department of  Constitutional Affairs (see page 117 of the Gowers Review of Intellectual Property, June 2006).

In the consultation document "Introducing a Small Claims Track into the Patents County Court" which the Intellectual Property Office published on 19 Jan 2012 the government announced that it intended to launch this new service in October and gave some details as to how it is expected to operate.   The consultation period was very short - less than a month in fact - and it is now closed.   However, none of the proposals upon which evidence was sought is likely to be controversial.

In relation to mediation, hearings, representation and appeals, the new small claims IP track is likely to work in the same way as the small claims track for every other type of case. The procedure will follow CPR Part 27 and the Part 27 Practice Direction rather than Section V of  CPR Part 63 and Section  V of PD Part 63. These procedures should ensure that cases are dealt with quickly. The costs that may be recovered will be governed by CPR 27.14. Any future changes to the ‘general’ small claims IP claims.

So what sort of claims will come before this new jurisdiction? Paragraph 3.5 of the consultation document suggests:
"Lowest value copyright disputes may be best suited to a small claims track in the PCC, for instance in cases of direct copying. Certain design disputes possibly in relation to unregistered designs, may also fit well into the track. Some trade mark disputes could also be resolved here for example; continued use of a body’s accreditation mark after membership of that body has lapsed/ceased or been withdrawn. It is therefore suggested that the small claims track covers appropriate copyright, trade mark and unregistered design cases."
However, patents and most registered designs cases are unlikely to be allocated to this track.  Many of these cases will be disposed of on paper.

This new service is intended to help SME and individuals but I think that photo libraries such as Getty Images and collecting societies will be among the first to use it.  High costs of litigation and delays in the Chancery Division and county courts will have acted as a disincentive to many cases.  Removing such disincentives will probably result in an increase in claims against consumers.   If it educates consumers into respecting intellectual property rights that may not be a bad thing,

There are still a lot of unanswered questions.  Will these cases come before Judge Birss QC or a district judge.   Does the claim have to be brought in the Rolls Building or can other chancery county courts hear small IP claims.   What about small IP claims from Scotland and Northern Ireland?   There are plenty of creative and innovative  enterprises in those parts of the UK but no patents sheriffs' court in Edinburgh or patents county court in Belfast.   Over the next few months I shall be looking out for announcements and reporting them here.  If anyone wants to discuss this topic with me they should call me on 0800 862 0055 or contact me through Facebook, Linkedin, twitter or Xing, or through my contact page.

Post Script 6 March 2013
The small claims track was launched on 1 Oct 2012 and I have written a number of articles and given a presentation on the new jurisdiction.  I have also teamed up with HutchinsonIP and JWK Solicitors to provide fixed fee advice and representation the details of which are set out in The Patents County Court Small Claims Track IP North West 6 Mar 2013.

Further Reading
Jane Lambert "The New Patents County Court Rules" 31 Oct 2010
Jane Lambert "Soon there will be a remedy if somebody steals your idea" Inventors Club 19 Sep 2012
Jane Lambert "Patents County Court - the New Small Claims Track Rules" (with bibliography) 20 Seo 2012
Jane Lambert "How to bring a small claim in the Patents County Court" NIPC website 12 Oct 2012
Jane Lambert "Patents County Court - More on the Small Claims Track" 13 Oct 2012
Jane Lambert "How Small Businesses in Yorkshire can protect their Intellectual Property" (contains presentation) IP Yorkshire 14 Oct 2012
Jane Lambert "The New Patents Court and Patents County Court Guides" 14 Jan 2013
Jane Lambert "The Patents County Court Small Claims Track" IP North West 6 Mar 2013

2 comments:

David Hoffman said...

You write "I think that photo libraries such as Getty Images and collecting societies will be among the first to use it." I'm sure that you are right. I run a small photo library and I head up a group of 1,000+ editorial photographers. We lose millions of pounds in unpaid licence fees every year.

The Intellectual Property Office (IPO) estimate

that around 150 firms will benefit from the service every year. This seems a gross underestimate to me. If I had the time I could provide this many myself. In reality I might well submit a dozen. There are about 400 small photo libraries and tens of thousands of individual professional photographers, all are likely to have at least a few valid claims.

I'm concerned that under the workload that I anticipate the PCC (or IPCC) may find ways to turn away cases or to make it less than worthwhile to pursue them. We already have a problem in that the sum recovered in a successful case is no more than the licence fee that a lawful publisher might have paid despite the real cost of an infringement being many times greater than the cost of an agreed licence. HHJ Birss has made it clear that normal trade discounts and the like should be applied to the calculation of damages. A publisher is only being sensible if s/he decides to publish in breach and then pay up only when caught. It costs no more than having bought a legitimate licence.

If the court is unable to make judgements that are genuinely deterrent then this potentially game changing innovation will be a failure.

Anonymous said...

A very interesting case was heard decided by the Court of Appeal, and this contains some observations regarding the small claims track and IP claims procedures.

http://www.bailii.org/ew/cases/EWCA/Civ/2012/570.html paras 33-38.