PCC Page 30: Managing your tentacles

A Red Letter Day for
limitation of damages
claims in the PCC

Suavely served up by the Chartered Institute of Patent Attorneys (CIPA), the PCC Pages seek 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 30th, immediate past CIPA President Alasdair Poore does a little more updating in the light of a recent case and, unusually, tomorrow's news.

"Before catching up on the latest moves on in the slow-moving case of the robot octopus, there are a couple of news items to record:

The Order bringing the limit on damages into effect in the PCC has been signed.  The limit on damages for PCC cases in the special jurisdiction (that means patents, designs and matters ancillary to or arising out of the same subject matter as such proceedings) will be introduced with effect from 14 June 2011 [a.k.a. tomorrow ...] under the Patents County Court (Financial Limits) Order 2011 No 1402.  Note that this is only in relation to the special jurisdiction (Copyright, Designs and Patents Act 1988, s.287(1)(b)).  Damages outside the special jurisdiction (a category that includes trade marks and copyright disputes) are not at present affected.  

However, since the Order also covers matters ancillary to or arising out of the same subject matter as patents and designs proceedings, it is worth bearing in mind that previously copyright and breach of confidence issues, where there were related patents issues, were heard on the basis that they were in the special jurisdiction (see CIPA Guide to the Patents Acts 287.06 citing PSM International v Special Fastener Products [1993] FSR 113 and McDonald v Graham [1994] RPC 407).. There were also rumours that the PCC's very first judge, Judge Ford, had decided passing-off matters within the special jurisdiction in each case as ancillary to the other part of the proceedings.  Bear in mind also that the claimant can abandon the excess over the limit or the parties can consent by “written memorandum signed by them or their representatives” to the court awarding damages in excess of this amount (CDPA s 288(2) and (4)).

The second news item is that the Patents County Court Users Guide has now been released on the Courts’ website, here.  This is a slightly irritating link as it is not at all intuitive [if you want to remember or guess it, it goes something like 

http://www.justice.gov.uk/guidance/courts-and-tribunals/courts/hearing-lists/list-patents-cc.htm].  If you go to the Justice website, under “Guidance” you can pick out “Courts and Tribunals” and then “Courts” – half way down a list of what looks like courts is a reference to “Court hearing lists”, and the Guide under “Patents County Court”.  Particularly misleading as the first list also has “Patents County Court” it, and in case you are misled, it is also worth noting that the information on this page is deceptively out of date.  This can be determined by the fact that, although Judge Birss QC features in the first few lines, his name reverts to that of his predecessor Judge Fysh QC after the beginning.  You have been warned: rely for the time being on the information in the PCC User’s Guide.

Readers will know that Cautious’ patent attorney has been finding all sort of things to consider such as settlement and costs exposure, while waiting for the definitive issue of the PCC Users Guide to guide him on what to do in the case of the Case Management Conference (CMC).  The PCC Users Guide conveniently includes, at Annex A, a draft order for the CMC.  The guidance in the User Guide is also very valuable and is reproduced below – with Cautious attorney’s initial comments, and a couple of additional considerations he will think about at the end:

The basis on which the court will decide whether to permit material to be filed in a case is by applying the cost-benefit test (PD 63 para 29.2(2)) and by giving permission in relation to specific and identified issues only ((PD 63 para 29.2(1)). PD 63 para 29.1 lists the material which the court may order: disclosure of documents, a product or process description, experiments, witness statements, experts’ reports, cross-examination at trial, and written submissions or skeleton arguments. The parties need to attend the CMC in a position to assist the court in making appropriate orders on this basis. In particular, the parties should consider:

(a) The need for and scope of any evidence from factual or expert witnesses. Note the court will consider whether there is sufficient evidence in the statements of case or whether further evidence is required.  No more facts (subject to disclosure of Product Description (see below)), but might need expert on patent issues, don’t need expert on design issues (see for example Albert Packaging v Nampak Cartons & Healthcare ([2011] EWPCC 15), a recent design case where neither party had independent expert witnesses).

(b) The need for and scope of any oral testimony and cross-examination. Note that the court will confine any permitted cross-examination to particular issues and to time limits.  In relation to unregistered design right IPOff are denying copying and asserting independent design.  This will clearly call for cross examination of IPOff’s star witnesses on these issues.  In relation to patent infringement IPOff have refused to provide any information pending confidential disclosure of their Product Description, so will have to reserve position on this.

(c) The need for, and scope of, any disclosure of documents.  Documents relevant to the non-copying and independent design issue; and subject to the Product Description, relating to design of the Robot Octopus.  (IPOff will be wanting documents relating to the creation of the design since they quite unreasonably refuse to accept that it is owned by Cautious (but see Albert Packaging (para 33) for the problems of written and signed assignments/licences, where they got (slightly) tripped up – always as well to double-check these points).

(d) The need for any experiments, process or product descriptions or supply of any samples. Samples and product descriptions will be required; wait and see if IPOff are going to ask for experiments in relation to their insufficiency argument.  I think we will argue that this is purely speculative and should not be permitted on the grounds of proportionality.

(e) The need for written submissions or skeleton arguments. Skeleton arguments will be required (at least to spell out issues on infringement and validity, copying and substantial reproduction)

(f) The likely timetable up to trial. This may include dates on which disclosure of documents, product and process description and experiments is to take place as well as a schedule for witness statements and experts reports including provisions for any evidence in reply (if required). Like to keep this pretty tight, but need to see Product Description and have time to review it before deciding on whether further evidence is required, and before obtaining any expert evidence.

(f) [second (f)]The need for an oral hearing or whether a decision can be made on the papers. If an oral hearing is considered to be appropriate, the court will order that the hearing be of a fixed duration of no more than 2 days.  An oral hearing will be required.

In addition at the CMC, IPOff have indicated that they will be seeking security for costs under CPR 25.12 – really, Cautious is not a foreign company, and do they think that Cautious can’t manage £50,000!, some amendments to their case (CPR 17), and are still going on about an application to transfer the whole case to the High Court (CDPA s289, CPR 63.18, and PD 30.9), given that the order limiting damages recovery will now be in place – have to deal with this, but of course the order limiting damages recovery only applies to cases issued from commencement (14 June 2011) or transferred into the PCC from that date (The Patents County Court (Financial Limits) Order 2011, Art 3).".