Sunday, 1 July 2012

Disapplying the costs cap

An expensive cap ...
A recent Patents County Court for England and Wales (PCC) decision of Judge Birss QC which has not yet reached the BAILII case law database is the subject of a short but informative newsletter from Hogarth Chambers. The case is Polymer v D S Smith, in which Richard Davis of Hogarth Chambers appeared for the claimant. According to the newsletter
"... the claimant sued for patent infringement and the defendant counterclaimed for invalidity. The patent in issue had previously been granted a certificate of contested validity by the Comptroller, and the question arose as to what, if any, impact this had on the PCC cost cap.

Section 65 of the Patents Act 1977 (“the 1977 Act”) sets out that where a certificate of contested validity has been granted by “the court or the comptroller” following proceedings where the patent was held to be valid or partially valid, then if the validity of the patent is again challenged in subsequent proceedings, the party relying on the validity of the patent is entitled to his costs on an indemnity basis.

CPR 45.41(2) [note for first-timers and non-British readers: CPR stands for Civil Procedure Rules] disapplies the cost cap in the PCC where (a) the court considers that a party has behaved in a manner which amounts to an abuse of the court’s process; or (b) the claim concerns the infringement or revocation of a patent or registered design, the validity of which, has been certified by a court in earlier proceedings.

HHJ Birss QC held that the term “a court” is to be interpreted liberally, i.e. the exclusion in rule 45.41(2)(b) applies where the certificate of contested validity was granted after invalidity proceedings either before a court or the comptroller.

Furthermore ..., as regards the implication of costs, the exclusion in rule 45.41(2)(b) regarding the costs cap and scale fees applies to the costs of both the patentee and the defendant. The judge did not accept the claimant’s contention that the rule should be interpreted purposively for the benefit of the patentee who has already succeeded in a previous invalidity challenge to his patent.

The judge held that the rule is to be interpreted such that there is no costs cap on either party. This did not deprive the party having such a certificate of any benefit litigating in the PCC since it would still have the advantage of the PCC’s procedural approach. Moreover, as in the High Court, the patentee can recover indemnity costs pursuant to s.65 of the 1997 Act.

... HHJ Birss QC made clear that his court was not a small claims court and it was appropriate for medium sized business to litigate before it".
This is just one of a number of recent decisions focusing on curbing the cost of IP litigation in England and Wales. The same newsletter also brings news of rulings relating to copyright and trade mark infringement proceedings.

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