Getting the balance right: when not to transfer a patent suit to a cost-capped forum

In Canon Kabushiki Kaisha v Badger Office Supplies Ltd and others, a Patents Court, England and Wales, ruling of Mr Justice Arnold last Friday, the court had to consider an application by the three defendants to transfer
a patent infringement claim from the Patents Court to the Intellectual Property Enterprise Court (the IPEC -- technically, like the Patents Court, part of the High Court but which, for all functional purposes, is a lower court and the successor to the Patents County Court). This application failed since the infringement claim was of some complexity and would be difficult to try within the two-day framework allowed for the IPEC. To address the defendants' concerns as to costs if the costs regime of the High Court were to apply instead of the cost-capping regime of the IPEC, the Patents Court would however exercise firm costs management. On that basis, Arnold J directed that a hearing take place so as to enable the parties could prepare for trial in a proportionate manner, adding that to try an infringement claim of some complexity, and an attack on validity on the basis of three items of prior art, in a two-day trial would be difficult.

This decision, which was delivered extempore, was picked up by the Lawtel subscription-only service, which also gave a brief summary of the salient facts.  In financial terms the defendants argued that the cost of a High Court patent action, estimated at £500,000, was disproportionate to the claim's value, while Canon -- the patentee  -- argued that the patent protected sales of products worth approximately €70 million per annum, and had 12 years to run, so that the claim's value greatly exceeded the £1 million identified as a guideline threshold in the IPEC guide. Canon also objected that it was unfair to subject it to the cost-capping regime in the IPEC where the defendants had not asserted that they could not afford to litigate in the High Court.