Earlier this year, the High Court was asked to consider an application to transfer High Court proceedings under the Shorter Trials Scheme ('STS') to the Intellectual Property Enterprise Court ('IPEC').

In line with the Civil Procedure Rules, the Court considered the following

  • complexity of the case
  • access to justice by the SME (a Small and Medium Enterprise)
  • estimated length of trial
  • cap on damages
  • value of the claim and any injunction sought.

The Court held that the overall test was not whether an SME would be entirely capable of conducting litigation in the High Court but whether it would be affected by the process in the High Court to the extent that its ability to access justice would be severely compromised.

The Judge considered the issues in dispute were not particularly complex and the difference between the trial periods under the STS and in the IPEC was immaterial. Although presented with no direct evidence from the Defendant on the impact of costs, the Judge did infer that the costs cap would at least provide 'comfort' to the Defendant.

As the Defendant had actually waived the £500,000 cap on damages due to a perceived remoteness of recovery this was not a factor for the Judge to consider.

The real point in issue was the 'rule of thumb' that where the sales of the products protected by the intellectual property in issue exceed £1 million per year, these cases are unlikely to be suitable for the IPEC.

The Claimant argued where the value of the injunction sought exceed £1 million, it should be entitled to use more resources than limited by the IPEC (through use of the cost benefit test and limitations on case management, i.e. disclosure). Importantly, the Defendant indicated it had given an undertaking not to sell the potentially infringing designs and therefore the value of the injunction was likely to be nil.

The Judge expressed his hesitation in making his decision but transferred the case to the IPEC on the basis that the Defendant was entitled to the protection which the IPEC offered an SME.

This decision is a useful reminder of the key considerations where a party seeks to transfer proceedings to/from the IPEC. It highlights the importance of choosing the Court of issue carefully and reminds litigants acting against an SME that even in high value cases the Court will consider whether the IPEC better protects the SME's access to justice.

For claims under £500,000 in value it is clear that the IPEC remains the Court of choice for all businesses, in particular SMEs and private individuals, due to the relatively quick, informal and structured cost-effective procedure it offers.