IP litigation in the UK: on the increase, thanks to IPEC

[Note: a slightly longer version of this post appears on yesterday's IPKat weblog, here]. Back in March, PatLit posted "Patent litigation in England and Wales 2007-2013: is it a predictor for UPC behaviour?", here, having received from Luke McDonagh some fascinating information and thoughts relating to current IP litigation research in the UK.  This has now been followed by the publication of a 53-page UK Intellectual Property Office-commissioned report, Evaluation of the Reforms of the Intellectual Property Enterprise Court 2010-2013, published on Wednesday and accessible via this link. As Luke explains:

In this report, which I co-authored with two economists, Christian Helmers and Yassine Lefouili, our task was to examine the impact of the 2010­-2013 reforms undertaken at the former Patents County Court (PCC), now the Intellectual Property Enterprise Court (IPEC). The primary aims of the reforms were to streamline litigation procedures and reduce litigation costs, and thereby increase access to justice for IP litigants, particularly for individual claimants and SMEs who had previously found the PCC an expensive and unwieldy litigation venue. The reforms introduced a number of changes -- staggered over the period 2010-­2013 -- including a cap on recoverable costs and damages, a reduction of the length as well as complexity of court actions, and the reconstitution of the PCC -- a county court -- as the specialist IPEC within the Chancery Division of the High Court.

In our report we assess the reforms both quantitatively and qualitatively. In our quantitative case counts we find that there has been a large increase in the quantity of IP cases filed at the IPEC post-reforms, and via a comparative study of IP cases at the High Court (HC) and Patents Court (PHC) we show that with the exception of patent cases, there has not been a corresponding increase in cases at the higher level.

We find quantitative and qualitative evidence that the costs cap and active case management by the IPEC judge have been the most influential reforms with respect to the large increase in cases filed at the IPEC post-reforms. We also note that case filings by SMEs have increased substantially following the reforms, fulfilling one of the key aims of the reforms. Importantly, we find that this effect is driven by changes at the extensive (more claimants) and intensive (more cases per claimant) margins of litigation behaviour at the IPEC. Finally, we provide a theoretical model that allows us to gauge the effect of the reforms on those IP disputes that never reach a court. Our theoretical predictions suggest that in addition to encouraging more IPEC case filings, the reforms have had the effect of increasing the quantity of out-of-court settlements as well.

This all suggests that the experiments in reformatting, restructuring and rebranding have paid off. The period in question stops before the Small Claims track started gathering its current momentum, so there may be even better news to come when use of the IPEC is next reviewed.