The English Patent County Court (“PCC”) introduced a new small claims track on 1 October 2012. The PCC small claims track is intended to provide a proportionate procedure by which many straightforward intellectual property (“IP”) claims with a financial value of not more than £5,000 can be resolved without the need for substantial preparation and formalities of a full scale trial. The streamlined procedural requirements of the PCC small claims track ensure that the court process is quicker, cheaper and more user-friendly.
The PCC small claims track is applicable for claims:
- not exceeding a value of £5,000; and
- relating to copyright, passing off, trade mark and unregistered design rights.
Claims relating to patents or registered designs are not eligible for the small claims track and may be brought in the High Court or in the streamlined multi-track of the PCC.
With the introduction of the small claims track at the PCC, there will now be three main avenues for intellectual property infringement claims in England and Wales:
- The Chancery Division of the High Court remains the main venue for patent, copyright, design and trade mark infringement cases as well as trade secret and passing off claims and a host of other IP related cases.
- The PCC (multi-track option) has developed in the last few years as an alternative option to the High Court, with a cap on damages of £500,000 and limitations on the amount of costs that can be awarded (cap of £50,000). The PCC is suitable, therefore, for many claims of moderate value and complexity. The procedure before the PCC is tighter and allows the court greater power to manage the case efficiently and economically compared to the practice in the High Court which often involves costly proceedings.
- The small claims track which is designed for low value cases that can be dealt with on a semi-informal basis.
In addition, the UK Intellectual Property Office can provide a non-binding opinion (at a very low cost) on potential patent infringement claims (as well as on patent validity challenges).
Before Issuing Proceedings
Potential claimants should always have regard to the merits of instigating legal proceedings, as unjustified threats to bring legal proceedings in respect of many IP rights can themselves be subject to litigation in the UK. The PCC also encourage parties to consider ADR as a means to resolving disputes.
1. Court Rules: Modification and Additional Rules
The court rules which apply to all civil courts in England and Wales govern the procedure for proceedings in the PCC small claims track but within the framework set for the PCC. Hearings will take place on an informal basis where the strict rules of evidence do not apply, the court need not take evidence on oath and it may limit cross-examination.
Perhaps the most significant departure from mainstream rules in the small claims track is that interim remedies (temporary injunctions, freezing orders etc) are not available.
2. Allocation of Claims
All claims in the PCC are automatically allocated to the multi-track initially unless the claimant states in the particulars of claim that the claim should be allocated to the small claims track. If the defendant disputes the allocation of the claim to the small claims track the court can determine the appropriate allocation based on the value and complexity of the case.
3. Issuing Proceedings and Fees
All proceedings should be issued (by filing the claim form) at the public counter in the Rolls Building (Fetter Lane, London). The claim form should be served by the claimant on the defendant with a response pack and so the claimant should make sure the defendant’s copy of the claim form is obtained from the court at issue. Details of court fees can be found on the Justice website: http://www.justice.gov.uk/courts/fees.
4. Time limits
The claimant’s particulars of claim must be served within 14 days after the service of claim form. A defendant has to file its defence within 42 days after the service of the particulars of claim. Normally, the particulars of claim should be verified by a statement of truth. If they are not, the defendant is allowed 70 days to file e defence. Should the claimant wish to reply to the defence, it has 28 days from the service of the defence to do so.
The general rule is that small claims are heard in a public. The judge may however decide to hold it in private, or even deal with the claim ‘on paper’ (i.e. without a hearing) if the parties agree. Experts can give evidence only if allowed by the Court and cross examinations may be limited by the Court. Judges are expected to actively manage cases to ensure that the proceeding is streamlined and proportionate. Cases will be dealt with by District Judges or Deputy District Judges with relevant IP experience.
Appeals to the circuit judge sitting in the PCC can only be made with permission from the judge who made the order in the small claims track or from the circuit judge.
7. Costs Order
The general principle that the unsuccessful party will pay the costs of the successful party does not apply on the PCC small claims track. Cost orders on the small claims track are limited to certain fixed sums granted at the court’s discretion. Such fixed sums will comprise fees for issuing the claim, court fees and certain other expenses related to attending court hearings. Strict caps apply to the recoverability of other costs such as legal representation.
The PCC can award the following remedies in the small claims track:
- damages or an account of profit (capped at £5,000); and/or
- a permanent injunction to prevent future infringement of the IP holder’s rights.
Interim remedies such as interim injunctions, search and seizure and asset freezing orders are not available on the small claims track (but are available on the multi-track procedure).
Patent attorneys, solicitors and trade mark attorneys all have rights to represent claimants in the PCC. One way in which costs on the small claims track are kept proportionate to what is at stake is that any party may present it/his/her own case at a hearing without legal representation.
The PCC small claims track provides a faster and more efficient option for claimants wishing to protect their IP rights low value infringements. The burdensome procedural and evidential requirements have been significantly reduced in an effort to simplify the procedure and reduce costs for small businesses and individuals wishing to protect their IP. The small claims track, however, is limited in the remedies available with no option for interim protection, a cap for damages at £5,000 and strict limitations on costs recoverability.