Friday, 22 April 2011

PCC 25: Will High Court litigation threat make Cautious’ tentacles wobble?

The PatLit PCC Series, subtly scripted by the Chartered Institute of Patent Attorneys (CIPA), seeks to explain how litigation works in the recently-revamped Patents County Court (PCC) for England and Wales, taking as its theme a dispute between Cautious Co and IPOff Ltd as to whether IPOff has infringed the IP rights of Cautious in its robotic octopus. In this episode, the 25th, CIPA President Alasdair Poore considers further the issues raised with regard to transfer of litigation between the PCC and its big, more expensive brother the Patents Court.
Last week Cautious was considering the possibility of having IPOff’s claim in the Patents Court struck out – on the grounds that it was an absurd abuse of process to bring proceedings in the High Court when there were already proceedings which raised many of the same issues pending in the PCC.  Despite gaining a taste for litigation, Cautious's patent attorney has decided that discretion is (partly) the better part of valour, and will be making an application to have the proceedings transferred to the PCC, at least as an alternative to strike out. 
As readers will know, the considerations in relation to transfer are set out in s.289 Copyright Designs and Patents Act 1988.  This disapplies (currently) s.41 of the County Courts Act 1984 (order by the High Court to transfer from the County Court to the High Court) – but this only applies to the special jurisdiction of the PCC, so it is relevant in Cautious's case but might not be in other cases.  It then provides that, in other cases, the Court will have regard to the financial position of the parties.  This leads to the provisions of Part 30 (CPR30.3), which sets out the general criteria for transfer between any County Court and the High Court.  Of these, Judge Birss QC pointed out in Alk-Abello v Merdian ([2010] EWPCC 14), rules 30.3(c), (f), (g) and (h) were unlikely to be relevant in most PCC cases (para 18), leaving the financial value and amount in dispute (30.3(a)), an alternative court being better 30.3(b), simple or complex facts, issues, remedies or procedures (30.3(d)), and the importance of the outcome to the public (30.3(e)).  
In addition, CPR63.18 explicitly provides for transfer, and in particular that the provisions of PD63.9 will apply.  These are: 
(1)      the financial position of the parties and whether a party can only afford to bring or defend the claim in the Patents County Court;

(2)        whether the claim is appropriate to be determined by the Patents County Court having regard, in particular, to
(a) the value of the claim;
(b) the complexity of the issues;
(c) the estimated length of the trial.”
Finally, Judge Birss QC referred to Memminger v Triplite (Court of Appeal) ([1992] RPC 210) and Chaplin v Lotus (ditto, unreported) to bring in several commonsense propositions: first in Memminger: if there is no reason to alter the position, all the factors are neutral, the proceedings should stay put; and proper administration of justice is important and not just the parties wishes (para 24); and transfer is not required just because there are important matters of fact or law, and the aim of the PCC is to handle the smaller, shorter, less complex, less important, lower value actions.
These propositions were reflected equally in the subsequent case in the High Court seeking transfer to the PCC, Caljan Rite-Hite v Solvex ([2010] EWHC 669 (Ch)).  Here Kitchin J had to decide on possible transfer of a trade mark ownership dispute.  Interestingly, the case started in the IPO, was transferred to the High Court at Solvex’s request, and then Solvex sought to have it transferred to the PCC.  In addition, as in Cautious's case, there were also patent and other disputes in the offing, but these were not discussed further. 
Kitchin J’s analysis is a useful summary of the some of the steps to go through: could Solvex afford to litigate in the High Court – although somewhat impoverished, there seemed to be evidence they could raise finance, and they agreed that they would continue to defend the proceedings in the High Court (para 18, 19).  Value: the value of the claim seemed to be about £500,000 (over or under but significant).  Complexity: it was clearly to require disclosure, probably 6 witnesses each with cross examination.  Trial length: in the light of these it really was unlikely the proceedings would last less than 3 days, and probably more.  So no transfer was ordered.
How will those apply to Cautious?  It is always difficult to say “no, I will not fight the proceedings if they are in the more expensive forum”, unless really being squeezed.  But it is worth bearing in mind that this really may be pretty decisive.  In this case  Cautious did not bring proceedings in the High Court because they were too expensive, so …?  Will he hold his nerve and say he would not defend the threats claim in the High Court?  The other factors, Cautious's patent attorney has already concluded that he could justify proceedings in the PCC.
There is one other factor which will surely be relevant here: the existing PCC proceedings.  The factors should be the same in applying to transfer the High Court proceedings to the PCC, and the PCC proceedings to the High Court, with the exception that the PCC proceedings were started first, because it cannot be sensible for proceedings on many of the same facts to take place in both jurisdictions.  However it would seem strange for Cautious to be arguing the case for not transferring the PCC proceedings to the High Court as part of the application to transfer the High Court proceedings to the PCC.
The proposal is, in medium term, to make an amendment to s.292 of the CDPA 88 to permit both applications to be brought before the High Court.  In the meantime, if this situation crops up in real life there are probably some imaginative ways of finessing the problem – for example by having Judge Birss wear two hats (or is it wigs).

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