PCC Page 14: Threats loom larger than the PCC

In this, the 14th in the series of Patents County Court (PCC) Pages, we continue the saga of the litigation between Cautious Co and its arch foe IPOff Ltd, which Cautious accuses of infringing various intellectual property rights in its robotic octopus.  PatLit thanks the Chartered Institute of Patent Attorneys (CIPA) and in particular its President Alasdair Poore, for supplying these episodes.  The tale now unfolds like this:

Cautious is suing IPOff in the PCC for patent and unregistered design right infringement.  Because IPOff’s boss is currently enjoying the winter sun (and for other good and plausible reasons), IPOff has applied for an extension of time for its defence.  IPOff would still like to make Cautious’ proceedings messy and expensive.

"Dear xxxx, Thank you for letting me know our success in applying for an extension of time.  It would be nice to know that Cautious has been clobbered in costs. 

 Your previous letter explained why Cautious’ patent attorney was so obscure in his “letter before action” [Threats issues].  This rang a bell – we had a major bid in to a betting syndicate for our product.  They were willing to give us a share of their profits resulting from successful predictions, which they expected to be millions. They cancelled their order when Cautious issued a press release saying it had this patent and was determined to enforce it; when they called Cautious he said not to touch us with a barge pole.  Our profits would have run to millions too.

 I would like you to launch proceedings against Cautious & Co for threats in the High Court. The PCC is clearly not suitable for such high damages. That will mean the PCC case will have to be moved to the High Court.

 In the meantime [some issues on the defence – to be discussed next week] …”

Although its aims are not very laudable, IPOff raises some interesting questions and points.  First, on costs (see CPR 44 generally on costs, subject to CPR 63(26) and CPR 45.42) – the court has a discretion (CPR 44.3):  there are several approaches to awarding costs on an application: among others, cost to one or other party (where one or other party can be said to have “won”), costs to follow the overall result (where the costs are incurred in the overall handling of the case), costs to be reserved until trial (where whether a party has “won” an issue depends on later findings), or no order for costs (see table in PD 43-48 Section 8.5 for description of various costs orders).  However, unlike the High Court, even in cases where one party is awarded the costs, the judge will not usually assess the amount of costs at that time.  That will be held over until summary assessment of the costs of the whole case (CPR 63.26(1)).  Note also that the maximum award of costs (£50,000) is determined after setting off costs awarded the other way (CPR 45.42(2)). In some cases, where a party has behaved unreasonably the court will make an order for costs at the conclusion of the hearing (CPR 63.26(2)). 

The second issue IPOff raises is  bringing a parallel set of proceedings.  It looks as though issuing threats proceedings in the High Court is improper and might be an abuse of process.  See for example Daniels v BBC ([2010] EWHC 3057) referring to CPR 1.4.15 (which appears not to exist!), and such cases can be struck out (CPR 3.4(2)(b)).  In this case there are probably no good reasons for bringing the threats claim in the High Court, as there is currently no damages limit in the PCC (although there is a plan to bring one in (see ALK-Abello v Meridian para 26).  Damages will potentially be a (subsidiary) issue in assessing whether the PCC is suitable for a case (see para 30).  But what happens if there is a damages limit and the amount of damages is essentially speculative.  Of course here the claimant AND defendant would be potentially able to agree that a higher limit should apply (CDPA s288(4)) – what happens then if the defendant refuses to agree?  

One of the issues which remains to be resolved by legislative changes is that currently an application to transfer from the PCC to the High Court has to be heard in the PCC, and an application to transfer from the High Court to the PCC has to be heard in the High Court (CDPA s289(1)).  The proposal is to change this, but in the meantime Cautious will have to make an application for dismissal on the grounds of abuse, or transfer, in the High Court – and of course there may be costs consequences, although one hopes that the court will deal robustly with attempts to disrupt proceedings.  If Cautious were to lose, IPOff would then have to apply to the PCC for transfer – a recipe for possible disaster!