Out-Law News 2 min. read

Plan to slash patent litigation costs would boost access to justice, say authors


A plan to cut the cost of litigating over patent infringements by a factor of ten has been submitted to a review of litigation costs in England and Wales. The plan proposes cutting the cost of action from between £500,000 and £1 million to £50,000.

A Working Group of the Intellectual Property Court Users' Committee has submitted its proposals to improve the workings of the Patents County Court (PCC), which was designed to help smaller companies take patent action more cheaply than is possible in the High Court.

The Working Group said that it had failed in this aim.

"The PCC was created by Parliament to serve the interests of small- and medium-sized enterprises by providing an affordable forum for intellectual property litigation," said the Working Group's report. "The PCC has not succeeded in providing this."

"There are two main reasons for this," it said. "The first is the fear of having to meet a substantial, and unpredictable, adverse costs award if unsuccessful. The second is that the procedure of the PCC is itself costly, because it is identical to that of the High Court. Changes both to the costs regime and to the procedure of the PCC are therefore needed."

The report is to be submitted to Lord Justice Jackson, who is conducting a review of civil litigation costs. The Working Group said that it hoped the plans would be considered in the second phase of that review.

The report had four main recommendations. These were "to require parties primarily to present their cases by sequential written arguments; to impose robust case management; to permit or require disclosure, experiments, factual evidence, expert evidence and cross-examination only where a cost-benefit test is satisfied; [and] to limit trials to one or at most two days".

The report said that a major problem with the PCC as it currently operates is that the costs are worked out on the same basis as the High Court to which it was meant to provide an alternative.

"Costs were assessed on the High Court scale prior to the CPR [Civil Procedure Rules], and the costs orders and the amounts spent by litigants are routinely little different from those in the High Court, particularly in patent cases," it said.

"Since the advent of the CPR, there has been a lack of a clear, or arguably any, distinction between the Patents Court and the PCC," it said. "Moreover, there has been relatively little use of the PCC by SMEs, particularly in patent and trade mark cases."

The Working Group said that the effect of the high costs was that smaller companies were denied justice.

"We are convinced that at present SMEs are denied access to justice in IP cases because they are priced out of the system," said its report."If litigation were made affordable, many more IP claims would be brought and defended."

"As Lord Justice Jackson has already observed in his Preliminary Report, 'one size does not fit all' in litigation," its report said. "This is certainly true in the field of IP litigation where costs can be extremely high. IP litigation must not be the preserve of the richest corporations. A system which is radically different from that currently existing must be introduced if IP litigation is to be affordable to all litigants."

It said that a key proposal was the limiting of recoverable costs. "We propose that the maximum total fees (including disbursements) recoverable after a fully contested action for patent infringement and validity should be no more than £50,000. In other IP cases the maximum total recoverable should be £25,000," it said.

The Chartered Institute of Patent Attorneys said that current costs were between £500,000  and £1m.

“These proposals show real innovation in the UK,” said CIPA vice president Alasdair Poore. "For the rest of Europe, this is much closer to what they already have. Now that the proposals have support from business, lawyers and judges, we look to the politicians to make them happen.”

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