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Government consults on case value ceiling for Patents County Court


The Government has published a proposal to limit the value of cases that can be heard by the Patents County Court (PCC) to £500,000. It hopes that the move will reduce the cost of intellectual property (IP) litigation for most companies.

The Intellectual Property Office (IPO) has launched a consultation on the proposal. It said that the change is needed because litigation in the UK is more expensive than in other countries.

"As well as more clearly differentiating the PCC from the High Court, these changes are expected to reduce the cost of lower value IP litigation and will help to ensure that such litigation falls within the jurisdiction of the PCC from the outset," said the consultation (19-page / 323KB PDF).

"There is some evidence to suggest that IP litigation in the UK is costly in comparison with continental Europe e.g. small to medium cases may be three times more expensive than similar cases in for instance the Netherlands or Germany." it said. "Until recently litigants in the PCC were potentially exposed to having to meet a substantial, and unpredictable, adverse costs award if unsuccessful. As a result, it is possible that right-holders, and in particular SMEs, were deterred from bringing infringement actions or defending their rights, especially against larger enterprises."

The PCC has jurisdiction over all IP areas and not just patents. The placing of a ceiling on the value of cases which can be heard by the PCC implements a recommendation of Lord Justice Jackson's review of civil litigation costs, which reported earlier this year.

That review backed a suggestion by the Intellectual Property Court Users Committee (IPCUC) that there be a ceiling and that it be set at £500,000.

Now-dissolved Government agency the Strategic Advisory Board for Intellectual Property (SABIP) had commissioned IP litigation expert Dr Sivaramjani Thambisetty of the London School of Economics, to give it an opinion on the proposed measure.

"An equitable way to ensure that an affordable PCC is not used to further increase the market power of large firms would be to limit the amount of damages [...] that the PCC could award to an appropriate amount which would ensure that predominantly ‘low value patents’ were litigated, whether such rights are held by SMEs or not," he said, according to the consultation.

The consultation document said that, by ensuring that low value cases are heard by the PCC, the ceiling would reduce costs for smaller companies and make it easier for them to gain access to justice.

The consultation said that it is confident that there has been adequate setting of a limit and that the Government now wishes to hear the views of industry and lawyers on what that ceiling should be.

"There have been numerous opportunities for Judges, legal practitioners, court users, industry and business to consider and comment on the need to provide for such a limit during and since the Jackson Review," it said. "As a result, and given the broad support for the provision, the Government now proposes to implement it."

"The purpose of this consultation is to seek comments and any relevant evidence as to the actual level of the limit on the value of claims which should be set," it said.

"The Government is consulting to help to ensure that this limit is set correctly although it recognises it is possible there may be a need to adjust it in the future," said the consultation. "In considering the appropriate figure, it is important for you to bear in mind the principle of damages in the UK. The central purpose of a civil law award of damages is not to punish the defendant; it is to compensate the claimant for damage, loss or injury they have suffered as a result of another’s acts or omissions."

The consultation asks if people or bodies submitting answers to it agree that the limit should be set at £500,000 and, if they disagree, asks what the limit should be.

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