October 2012 saw the launch of the “small claims track” for intellectual property cases, offering a fast, and hitherto unthinkably cheap, access to justice for small businesses which have had their IP rights infringed.

What's new?

IP rights owners can now bring infringement cases in the Patents County Court (PCC) without fear of being liable for their opponent’s costs if they lose. Under the small claims track, a winning party cannot recover its costs from the losing party, except for very limited fixed costs (such as court fees). The fear of being liable for the other side’s costs, a major inhibiting factor to SMEs bringing IP infringement cases, is therefore removed.

The costs each party itself incurs are also likely to be far lower: the procedure is greatly relaxed and intended to encourage IP rights owners to bring cases without legal representation. Many of the procedural formalities of normal litigation have been abandoned, and the trial will be a comparatively informal affair – for example, the usual strict rules on evidence will not apply.

The small claims track is for low value claims only – the damages that can be awarded are capped at £5,000 (as opposed to £500,000 in the multi-track of the PCC and unlimited damages in the High Court).

What kinds of cases are appropriate for the small claims track?

The PCC small claims track is available for copyright, trade mark, unregistered design right and passing off cases. It is not available for patent or registered design cases. The remedies available are damages (or an account of the infringer’s profits) and a permanent injunction to prevent future infringement.

It is most likely to be used for copyright cases – in particular, those involving the unauthorised use of someone's copyright-protected image (such as a photograph or graphic artwork). It should also be useful for small brand owners: a big company will no longer be able to simply use the same brand as a small company’s or individual’s trade mark feeling safe in the knowledge that the aggrieved person will not be able to afford to take it to task.

Relevant factors in deciding whether a case is appropriate for the small claims track include the complexity of the facts or law, and the amount of oral evidence which will be required. For example, a case where there is a major factual dispute over who created the allegedly infringed work is unlikely to be appropriate.

Mishcon's view

The PCC small claims track is to be welcomed as widening access to justice in what was until recently the prohibitively expensive world of IP enforcement. Cases can be prepared for relatively modest costs. SMEs can now protect their IP rights without fear of incurring thousands of pounds in costs or being hit with a big bill from the other side if they lose.