Damages cap introduced for Patents County Court rulings on copyright and trade mark disputes

The 'damages cap', which is set out in the new Patents County Court (Financial Limits) Order (Number 2) 2011, gives small and medium-sized businesses (SMEs) legal certainty on the risks of bringing a claim of copyright or trade mark infringement, the Intellectual Property Office (IPO) has said.

There are already restrictions in place on what legal costs the PCC can order parties to pay. Costs awards at the PCC cannot exceed £50,000, whereas the High Court can order parties to pay unlimited costs.

"A more accessible justice system will give companies greater incentive to protect and enforce their intellectual property rights," Baroness Wilcox, Minister for Intellectual Property, said in an IPO statement.

"Making it easier for small firms and entrepreneurs to use the legal processes will give them more time to concentrate on business activities, innovate and support economic growth," she said. "These changes provide clarity on the legal processes, certainty over the risks and give small enterprises the confidence to stand on an equal footing with financially stronger companies." 

"The change in law will ensure that lower value, less complex cases, which would typically involve small businesses, will automatically fall within the jurisdiction of the PCC which has a less costly and more streamlined process. Therefore the risk of expensive disputes over where the case should be heard will be reduced," the IPO statement said. 

The average time it takes between a "case management conference" and a beginning of a trial at the PCC is 21 weeks, a senior judge at the Court said, according to the Patent Litigation Weblog.

In June a £500,000 cap was placed on PCC damages rulings in relation to patent and design rights disputes. 

The IPO said that the new law does not prohibit rights holders from filing a claim for their case to be heard in the High Court.

"This development is in line with the Government’s stated intention of encouraging innovation and creativity by providing owners of intellectual property rights with an accessible forum in which to enforce those rights," said David Bloom, intellectual property law expert at Pinsent Masons, the law firm behind Out-Law.com. 

"To date, enforcement of intellectual property rights has been the preserve of companies with deep resources but with the resurgence of the Patents County Court and the confirmation of the type of cases that can be heard by it, it is hoped that SME’s will take advantage of the relatively quick and affordable process to prevent infringement of their IP rights," Bloom said.