October 2011 marks the first anniversary of the new rules of procedure of the Patents County Court (“PCC”), and the appointment of a new judge tasked with making the court a low-cost forum in which small and medium-sized enterprises (“SMEs”) can enforce their intellectual property rights (not just patents) in the UK. The first year of the PCC has been hailed as a success by IP owners and IP litigation lawyers.

Background

Although the PCC has existed for over 20 years, new rules of procedure were introduced in October 2010. They implemented a package of measures intended improve access to justice in IP disputes for SMEs (who in many cases had become resigned to being priced out of the Courts).

The package of measures was proposed in June 2009 by the Intellectual Property Court Users’ Committee (“IPCUC”) in the context of the Jackson Review of civil costs. It was fully endorsed by Jackson LJ in his final report in January 2010. Indeed, Jackson LJ commented that:

“the fact that almost universal support for the IPCUC’s proposals was expressed during the consultation exercise is compelling. My own experience this year suggests that it is rare for court users or lawyers to agree about anything which is on the reform agenda”.

The new rules

There are four main planks to the reforms.

  1. A radical simplification of procedure. The starting point is that there are no witness statements, no expert reports, no disclosure and no cross-examination. (The judge can depart from this starting point, but only in relation to specific and identified issues and only where he is satisfied that the benefits of the additional material justify the costs of producing and dealing with it ). Trials should not last more than 2 days, unless unavoidable.
  2. The traditional cost-shifting rule in English multi-track litigation is largely abolished. The maximum costs liability of a losing party is now capped at £50k, broken-down between the various stages of the proceedings according to a schedule of scale costs.
  3. The PCC’s money jurisdiction (previously unlimited) is fixed at £500k or less (excluding interest and costs). This is to prevent high-value cases which properly belong in the Patents Court (which forms part of the Chancery Division of the High Court) from clogging up the PCC.
  4. The name of the PCC will be changed to the “Intellectual Property County Court” as soon as possible. This will make clear that the PCC can handle disputes relating to all types of intellectual property right, not just patents.

The first 12 months

Since October 2010, 130 cases have been commenced in or transferred into the PCC. The period between the case management conference and trial date has ranged from 11 to 33 weeks with an average of 21 weeks. This means that an infringement action can typically get from start to finish within 6-12 months. This is speedy, and compares favourably with the High Court and specialist patents tribunals in other countries. The PCC has so far heard 10 full trials, with 13 more due to be heard before the end of 2011. Of course, in its first year the PCC has still been dealing with a hang-over of claims started before the new rules applied (which continue under the old rules). So the full impact of the new regime will only emerge over the next year - watch this space!

The PCC is in London, and is in the course of moving to the new Rolls Building on Fetter Lane. There it will take its place alongside the Chancery Division (including the Patents Court), the Commercial Court and Mercantile Court, and the Technology and Construction Court.

Food for thought

  • The changes in procedural and costs shifting rules are a radical departure for the English litigation system. They were inspired in large measure by the procedure in the German, French and Dutch Courts, where the costs of patent litigation are typically lower than in the High Court (Patents Court) and hence where the volume of such litigation is much higher. For example, 70% of litigation in the EU in relation to European patents takes place in Germany. With the relaunch of the PCC, the English Courts are ready to redress the balance.
  • The landscape for IP dispute resolution has changed completely in the UK over the last year as a result of the launch of the PCC. SMEs for whom IP litigation was previously unaffordable now have a realistic possibility of bringing infringement proceedings. Similarly, SMEs which have relied on being small enough not to merit infringement claims by third parties, may be unpleasantly surprised to find that claims against them are now more cost-effective.