Tuesday, 16 November 2010

The PCC Page, no.6: Judge injects meaning into “SME Court”

The PCC Pages is a series of Tuesday features on the new regime for litigation before the recently revamped Patents County Court (PCC) for England and Wales, hosted by PatLit but furnished by the Chartered Institute of Patent Attorneys (CIPA). In this post, CIPA President Alasdair Poore focuses further on the rules relating to the transfer of litigation from the Patents Court.

Cautious Co: “So after all that stuff about costs [see The PCC Page No.5], tell me again what sort of case is suitable for the PCC, and what's all that about that transfer thing again?”

Optical Laboratories v Hayden Laboratories [1993] RPC 204 was a classic case under the “old regime” – that is the very old regime – of the PCC. It stands as one of the benchmarks of what went wrong with pleadings in the Patents County Court. More on that in future posts. Quoting Lord Justice Hirst, one can sense the incredulity: “The pleadings are by any standard astonishing documents” – in relation to a simplified procedure involving a defence of 128 pages and reply of 62 pages. Under the new rules, with Judge Birss QC, it seems likely that would be regarded as excessive. Indeed that concern about pleadings, and how the rules would address that, was one of the worries in the Working Group recommending the rule changes about the new rules. Now those worries are encapsulated in the rules in the word “concisely”.

This was a case started in the PCC, but Judge Ford refused to transfer it to the High Court. On appeal on an issue of calling two expert witnesses, McCowan LJ observed “I cannot help wondering if it is the sort of case for which the Patents County Court was designed”. The writer is sure that that would still be the case.

Judge Birss QC’s has given guidance on the transfer of cases in his judgment in ALK v Meridian Medical Technologies and Dey Pharma [2010] EWPCC 014, discussed here on the IPKat last week. This provides some useful insight into when a case is likely to be suitable for the PCC and when it is not, as well as when to transfer and when not.

Judge Birss QC repeated his conclusion from Technical Fibre, that the new rules apply to transfers, albeit taking into account that the case will be conducted on the basis of the old rules.

This case involved reasonably straightforward mechanical technology, involving a spring loaded syringe with a mechanism for covering the needle after use to prevent injuries by accidental stabbing – the well known Epipen, which allows patients to inject themselves with adrenalin in the case of a severe allergy reaction. The claim was for a declaration of non-infringement: infringement and validity were in issue, with one novelty citation and two obviousness citations. It was a case expected to last between 3 and 4 days at trial (and probably 2 days if it had been conducted under the new rules). In paragraphs 15 to 22, Judge Birss sets out briefly the framework of rules applicable to transfers. Of these, the amendments to the practice direction on transfers between the Courts in relation to the PCC, PD30 9.1 and 9.2 (affordability, value, complexity and trial length), are particularly important. His summary (para 25, last sentence) was that the Judge is
“to have regard to the financial position of the parties. He is not obliged to transfer if it is shown that the proceedings are likely to raise an important question of fact or law. But subject to those rules he should bear in mind that the Patents County Court was established to handle the smaller, shorter, less complex, less important, lower value actions. It was to provide cheaper, speedier and more informal procedures to ensure that small and medium sized enterprises, and private individuals, were not deterred from innovation by the potential cost of litigation to safeguard their rights”.
European Commission guidance on what a small or medium sized enterprise was found helpful (Commission Recommendation of 6 May 2003 concerning the definition of micro, small and medium sized enterprises" (2003/361/EC (see Article 2)) at OJ L 124/36 20.5.2003)

The judge found that it was a case which was suitable for the PCC in relation to the issues arising and the case management aspects. However, the value of the case (turnover over US$ 20 million) and the financial position of the parties (large parties) pushed it towards the High Court, but would not exclude it from being in the PCC. Ultimately (para 54) he found the decisive factor is that
"the court was set up to ensure that small and medium sized enterprises, and private individuals, were not deterred from innovation by the potential cost of litigation to safeguard their rights. With the new procedures in place I intend to devote my energies to making them work in order to achieve that objective. However this is not the case in which to do it”.
This will provide useful guidance for where to draw the line at least in some cases.

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