PCC Update 1: new regime, new judge, old case, old rules

Judge Colin Birss QC, the recently-appointed judge for the recently-revamped Patents County Court, gave an instructive judgment for prospective PCC litigants and their professional representatives today in Technical Fibre Products Ltd & Anor v Bell & Ors [2010] EWPCC 011. The dispute revolves round a patent application which the claimants say belongs to them, not to their former employee and his associates. The claimants also allege breaches of confidence, contract and fiduciary duty, passing off and infringement of database right.

The action began in the High Court in October 2009 but was transferred to the Patents County Court in February 2010. Today's ruling is the outcome of a rather belated Case Management Conference (CMC), which was put off while the parties tried to negotiate a settlement but only succeeded in pruning the outstanding issues a bit. Said Judge Birss, in businesslike fashion: "... the court's task now is to get on and give directions to bring the case to an orderly trial".  Having done so, he then focused, at paragraphs 5 to 11, on something completely different: the new Patents County Court procedures [PatLit has provided the emphasis in bold]:

"The new Patents County Court procedures came into force on 1 October 2010. They consist of new CPR [for non-England and Wales readers and first-time visitors to PatLit, that's the Civil Procedure Rules] Pt 45.41 – Pt 45.43 and corresponding section 25C of the Costs Practice Direction; CPR Pt 63, Section V Patents County Court, consisting of CPR Pt 63.17 – 63.26; and Section V of the Practice Direction 63 – Intellectual Property Claims paragraphs 27 – 31.

As a preliminary matter the parties raised the question of whether the new procedural provisions applied to this case. Submissions were made on the point in the parties respective skeleton arguments and I am very grateful to Mr Geoffrey Pritchard on behalf of the Defendants and Ms Anna Edward-Stuart on behalf of the Claimants for their assistance on the matter. In my judgment the new procedural rules do not apply to this case. However since both sides made the same submission (that the new rules did not apply) it must be made clear that I have not heard full argument on the point between parties making rival submissions. Nevertheless having regard to the practical importance of the matter for practitioners in this Court, the parties invited me to provide my reasons in summary form in this judgment. That seems to me to be a helpful course.

In brief, my reasons are as follows:

i) Although there are no express transitional provisions forming part of the new rules, nothing in the provisions bringing the new rules into effect states expressly that they should apply to existing cases and if so how.

ii) The new Patents County Court procedures are intended to be radically different from the familiar rules of procedure under the CPR. The rules address statements of case, statements of truth, case management, conduct of trials, costs and other matters. The new procedures consist of a package of measures which interact with each other and were intended to operate as such. To best achieve that objective the rules need to be applied as a whole. The rules cannot be applied as a whole to an existing case. The position of a case started in the High Court and transferred into the Patents County Court after the new rules have come into force is not before me and may raise different considerations.

iii) Litigation which had been started in the Patents County Court before the 1st October 2010 was commenced under a regime in which costs were dealt with in the familiar way. There is a general presumption against retrospective legislation (16(1) of the Interpretation Act 1978) which applies to subordinate legislation as much as to primary legislation (Nicholls v Greenwich [2003] EWCA Civ 416).

If the new rules do apply to existing cases in the Patents County Court, it seems to me strange results would ensue. The new provisions on costs in CPR Pt 45.41 – 45.43 provide for a ceiling on the overall costs of a case (subject to certain irrelevant exceptions). To impose the costs ceiling on costs incurred by parties in litigation when, at the time they were incurred, the ceiling did not apply seems to me to be potentially unfair, retrospective and likely to lead to injustice. One could conceive of an argument for saying that the costs rules could apply to all costs incurred after 1st October 2010 in all cases in the Patents County Court list as at that date but the risk of injustice in that course seems to me to remain. Although the table of scale costs includes a breakdown for different steps and stages of a claim (section 25C of the Costs Practice Direction (CPR Pt 45)), the scale system operates as a limit on the total costs at the determination of the claim (CPR Pt 45.42(1)). If the costs incurred prior to 1st October 2010 and assessed in the normal way produce a figure above the ceiling (£50,000) where does that leave the ceiling?

Accordingly in my judgment the new procedural rules set out in paragraph 5 above apply to cases commencing in the Patents County Court on or after 1st October 2010. The new procedural rules set out in paragraph 5 above do not apply to cases which were already pending in the Patents County Court before 1st October 2010.

So far in this judgment I have referred to the new procedural rules set out in paragraph 5 above. That does not include the new provisions on transfer in Practice Direction 30 which supplements CPR Pt 30. These new provisions (new paragraphs 9.1 and 9.2 of the Practice Direction) seem to me self evidently to apply from 1st October 2010 to all cases whenever they commenced.

I have not addressed the application of the rules to cases transferred into the Patents County Court after 1st October 2010 by the High Court and since that is not this case I will say only the following. There is no doubt that in general terms the new rules apply to cases transferred from the High Court into the Patents County Court as much as to cases commenced in this Court. Equally it seems to me that a Court transferring a case into the Patents County Court after 1st October 2010 is likely to do so in the expectation that the new procedures (in some form, perhaps suitably modified as appropriate) will apply to such a case. These issues should be dealt with on a case by case basis as and when they arise in future".