The introduction of a cheaper and faster forum for simple intellectual property disputes has been welcomed by many, but is it good for business? The Patents County Court (PCC) was originally streamlined in 2010 to provide parties with a cheaper and less complex forum in which to litigate their intellectual property disputes. The new court has been largely successful and has attracted a wide range of intellectual property disputes. Subject matter litigated before the PCC includes ‘Glee’, Weightwatchers and Vivienne Westwood’s trademarks for her clothing range.

On the 1 October a small claims track was introduced to the PCC, which actually deals with all kinds of intellectual property dispute. This new procedure allows an individual or a business to raise an action for breach of copyright, trademark, passing off or unregistered design without the requirement of legal representation and with an informal hearing. The procedure will not be available for patents, registered designs and plant varieties. The court deals with cases in England and Wales but given the UK and EU wide nature of intellectual property rights the new procedure will be of relevance to Scottish businesses also.

As this is a small claims procedure the value of the claim cannot be more than £5,000 and costs orders are very limited (they are capped at £260). This compares with the PCC’s multi track procedure which allows claims of up to £500,000 and caps costs at £50,000. Initially its resources will be limited whilst demand is gauged, but the Intellectual Property Office estimates that 150 businesses will take advantage of this procedure every year. This would obviously significantly reduce the time and cost of an action.  

Advantages of this procedure

The key feature of the system is that the judge has wide case management powers. This means that the process will suit individuals who represent themselves. The rules of the court provide that the court ‘may adopt any method of proceeding at a hearing that it considers to be fair.’ Hearings are intended to be informal where strict rules of evidence do not apply and there is no need to take evidence on oath. Alternatively the Court can dispose of a hearing and deal with the whole case on paper. This simpler, streamlined procedure will help keep costs proportionate to the dispute.

Problems with the procedure

One of the challenges with this process is that it may encourage people to raise claims where they would otherwise not. If an individual can bring a claim for copyright infringement with little risk of costs, this may open the “floodgates”. Businesses may find themselves having to deal with difficult and perhaps spurious claim at significant costs – both in terms of legal costs and management time.

John MacKenzie, an Intellectual Property specialist at Shepherd and Wedderburn commented:

The introduction of a cheaper and faster forum for simple intellectual property disputes will be of value to businesses who have many claims to enforce. However there is a real risk that rights owners are drawn into low value court battles that take up a lot of management time. What is needed in these cases is an early assessment of the prospects of success, and then active use of alternative dispute resolution processes to try and avoid the need for court.”

The only further reform proposed for the PCC is to rename the Court to better reflect its remit. This reform is not expected for another year.