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The Intellectual Property Enterprise Court (IPEC) The UK’s Cost-Effective Venue for Litigation in Europe

17 April 2014

The UK has a reputation for litigation to be extremely expensive, lengthy and complicated.  As a result, many companies have chosen to litigate their patents in Germany, where it is perceived that litigation is cheaper and quicker.  This article aims to demonstrate that patent litigation in the UK can be just as inexpensive as it is in Germany, and quicker.  To achieve this cheaper and quicker litigation, it is necessary to use our specialist Intellectual Property Enterprise Court (IPEC), the court formerly known as the Patents County Court.

A Choice of Courts

In the UK, we are fortunate to have a legal structure which gives the claimant an excellent choice of different courts to litigate in.  At first instance a claimant has a choice between the Patents Court, which is a specialist branch of the High Court; the Intellectual Property Enterprise Court; and, for some issues, the UK Intellectual Property Office (UKIPO).  Each court has a range of advantages and disadvantages.

Litigation of high value, such as Pharma cases, will almost always be brought in the Patents Court.  The majority of cases, however, are of much lower financial value, or require an injunction as the primary remedy, in which case the IPEC is a much more appropriate forum.  If a matter is of very low value, and the principle issue is one of validity, the UKIPO might be the appropriate forum.

This article concerns itself primarily with the Intellectual Property Enterprise Court because we believe that it is the most appropriate venue for the majority of IP disputes, and because it contrasts so favourably with the Patents Court.  A case run in the IPEC might typically cost about £120,000 and reach judgment within twelve months of a claim being issued.  Additionally, you are not faced with an unpredictable substantial bill for the other side’s costs if you lose, so litigation through the IPEC involves much less risk than through the Patents Court.

History of the IPEC

The IPEC was, until recently, known as the Patents County Court.  The Patents County Court was established in the early 1990s as a forum for litigating patents at a much lower cost than through the Patents Court.  While the Patents County Court was moderately successful, its rules limited its attractiveness.  In 2010, the Court was reformulated under a new set of rules and with a new judge, Colin Birss, and since then, the Court has gone from strength to strength.  It has become a very popular venue for litigation of all types of Intellectual Property.  His Honour Colin Birss has now been elevated to sit as a judge in the High Court, and has been replaced by HHJ Richard Hacon QC.

IPEC – An Overview

The IPEC can take any type of IP case: patents, trade marks and designs.  To distinguish it from the Patents Court, it has a cap on the damages that can be awarded of £500,000.  This cap can be waived on the agreement of the parties.  However, for many litigants the most important remedy is an injunction, and the Court is not limited in the injunctions that it can award. In this respect, the IPEC has the power to make any injunction order it chooses, if infringement is found.

One of the most attractive aspects of the IPEC is the limit of £50,000 in legal costs that a winning party can claim from a losing party.  This significantly increases the certainty the parties have on their exposure to costs and levels the playing field between parties.  Probably the biggest disincentive to litigate an IP case in the High Court is the unlimited award of costs in the event that you lose.  The cap to costs available in the IPEC gives a degree of certainty which can be budgeted for so that a litigant does not feel that he is writing a blank cheque. In practice, owing to the detailed rules applying as to how costs are calculated, it would be difficult for a successful litigant to recover the entire £50,000 that is available; costs awards around £35,000 to £40,000 are more realistic.

The trials themselves are short.  They are limited in length to two days, meaning that there is no time for lengthy cross examination.  The Court relies much more heavily on written evidence submitted in advance of the trial rather than on oral evidence at the trial itself.  This makes a big difference to the cost of a trial compared with the High Court, where the trial can last for weeks.

The evidence that can be submitted in a litigation action is also very constrained.  Discovery is not usually ordered, and the judge controls the litigation very closely to ensure that the evidence that is submitted is highly focused, thereby minimising cost.

The constraint on the length of the trial, and on the extent of the evidence contribute to the rapid progress of a case to a decision, normally within twelve months.  All of the issues are normally dealt with together, avoiding the bifurcation of issues which often causes German proceedings to become protracted.

The streamlined procedure also means that the cost of taking a case to trial through the IPEC is relatively low, typically as little as £120,000.  This is highly cost-competitive with actions brought in courts in other European countries.

Representation

Unlike the Patents Court, where a litigation case will be run for a party by litigation solicitors who will, in turn, instruct barristers to advocate on the part of the party, UK patent attorneys also have the rights to conduct litigation before the IPEC.  This has several potential advantages, including the fact that all patent attorneys are technically qualified, proceedings are handled predominantly in writing, consistent with the way in which patent attorneys interact with Patent Offices. Another issue is that the cost of patent attorneys engaging in this kind of work tends to be significantly less than if litigation solicitors are engaged.

In the last couple of years, Withers & Rogers LLP has been the most active firm in the Court, so we have developed extensive experience of handling cases there.