PulseOn sued Garmin in the UK under the Shorter Trial Scheme for infringement of its unregistered UK design right and registered Community Designs (“RCDs”) for smart watches incorporating heart rate monitors. It dropped its claim for infringement of UK unregistered design after oral evidence from Garmin’s witnesses. Garmin counterclaimed for revocation and a declaration of invalidity of the RCDs.
The judge held that the RCDs were valid but had not been infringed by Garmin.
It was accepted that Garmin (the “Defendant”) was the winner of the action. Its total costs were £924,837.39. Garmin asked for all of its costs with no deductions. PulseOn’s (the “Claimant”) costs were £609,389.32. PulseOn argued that Garmin’s costs were 50% higher than its own and therefore submitted that Garmin’s costs were not proportionate.
The CPR rules state that the court will allow costs which are proportionate to the matters in issue. Costs which are disproportionate in amount may be disallowed or reduced even if they were reasonably and proportionately incurred. What is reasonable and proportionate should be judged objectively.
PulseOn submitted that a good starting point for proportionality would be its own costs of £609,000 and that the court should start from that basis, and deduct any necessary sums from that. Garmin argued that proportionality should take into account the risk to it both in terms of monetary loss and damage to its reputation and future business. In particular, it pointed to the fact that the unregistered design claim had been dropped at a late stage.
The judge agreed with Garmin that the importance of the case to it and the damaging effect of losing it were significant factors. He took those factors into account under the CPR when considering proportionality of costs. He also took into account the fact that a large proportion of the costs were incurred in relation to the unregistered design claim and that Garmin’s substantial costs defending that claim were necessarily, reasonably and proportionately incurred.
He concluded that Garmin’s costs were proportionate to the importance of the case against it. There were inevitably costs which were not reasonable and he therefore deducted 10% from the overall figure.
PulseOn argued that certain costs should be deducted from the overall costs on the basis that they related to certain discrete issues which Garmin lost, in particular, the counterclaim to invalidate PulseOn’s RCDs. The judge rejected that argument.
PulseOn was directed to pay Garmin 90% of the costs that it claimed.
Case Ref: IPEC 1 February 2018