Small and medium size enterprises have traditionally been wary of enforcing their intellectual property rights because of the cost of taking action, the possibility that they will have to pay a sum into court by way of security for costs, and the risk that, should they lose, they will be liable for the other side's costs as well.
The Patents County Court went some way towards solving this problem, with a fixed costs liability of £50,000 and maximum recoverability of £500,000 in damages. However, for many small businesses, particularly start-ups, the key remedy is a final injunction, to prevent future infringement, not damages.
Furthermore, the possibility of having to pay £50,000 towards your opponent's costs (should you lose), on top of your own solicitor's costs, can be a real deterrent to taking action at all. Indeed, according to the Hargreaves Review, one in six small and medium size businesses have given up enforcing their intellectual property rights due to the high costs associated with doing so.
The government has now moved further to increase access to effective intellectual property protection by introducing a new small claims service in the Patents County Court. The service will not be introduced until next year, and complete details are not yet available, but at present it seems that:
- damages will be limited to £5,000 per case; and
- costs will be fixed at a low figure.
The Intellectual Property Office's press release only refers to copyright, trade marks and designs. It is not clear whether patents are specifically excluded from the new small claims service, or whether this is an inadvertent omission from the press release. We are currently investigating:
- whether a patent infringement action can be brought using the small claims service; and
- at what level costs will be fixed.