Tuesday, 11 January 2011

PCC Page 11: Getting your tentacles in a twist

New readers start here: Last year PatLit published a series of 10 "PCC Pages", devoted to the newly-revamped Patents County Court (PCC) for England and Wales and how to use it (an index of the first ten PCC Pages can be found here).  Each page has been supplied by the Chartered Institute of Patent Attorneys (CIPA), through the kind offices of its President, Alasdair Poore.

The PCC Pages are themed on a piece of litigation brought by Cautious Co., whose Mr Cautious is anxious to deal a lethal legal blow to his competitor IPOff Ltd, an alleged infringer in respect of Cautious's Robot Octopus ...

Old readers can pick up the thread here, with this letter from Cautious's professional representative to his client ...
You can't acknowledge
service if you never received 
it in the first place 
“Dear Mr Cautious, you will recollect that we served proceedings on IPOff Limited in respect of the Robot Octopus, together with particulars of claim, just before Christmas. As I mentioned to you at the time, if IPOff (as we could have guessed they would from their previous blasé approach) failed to file and acknowledgement of service, in the PCC they still have 42 days to file a defence.

However, they have got their tentacles into a twist here. We have not received an Acknowledgement of Service and, in the light of a recent case, where the Court seemed to have muddled things a lot, I also checked with the Court and they have not received one either. Although IPOff still have the same time to file their defence, if they do not file an Acknowledgement of Service – required within 14 days of the particulars – we could seek judgment in default.

This is likely to be something of a tactical manoeuvre for several reasons. We can simply make a request for judgement which is a very cost-effective option and you can do this without giving notice to IPOff at all. But there are some important points:

• the claim must just be for money damages (although these can be assessed by the Court), or you must abandon claims to any other remedies;
• IPOff could apply to set aside the judgement in default and the judge may do so if there is a realistic prospect of defending the claim.

(There are quite a lot of other issues, but I won’t bore you with them here [see Civil Procedure Rules (CPR) 12.2 and 12.3 in particular]).

Given the time that IPOff have been infringing, this could still be a pretty embarrassing episode for them, and would certainly bring them to the negotiating table.

Alternatively you can make an application for judgment in default. This must be made to the Court and you have to give notice to IPOff. Although this will embarrass them (or their solicitor), the likely effect is that it will simply result in them filing a defence, and leave you with the additional cost of having initiated the application.

Give me a call so that we can discuss this.”
In his judgments just before Christmas on Media C.A.T. v A [2010] EWPCC 17 (and 18) – involving many cases of alleged copyright by sharing pornographic films over peer-to-peer file sharing networks – Judge Birss QC explained the intricacies of requesting judgment in default under CPR 12.

In most intellectual property cases it is likely that this will have relatively little application, because judgment in default, under CPR 12 can only be sought if the only remedy is a monetary one (either a specified sum of money of a sum to be assessed by the Court) (CPR 12.4(1)), or if claims to any other remedies are abandoned (CPR 12.4(3)). Most cases of IP infringement include claims for injunctive relief and/or declarations and/or delivery up. So a choice will have to be made as to whether to abandon these remedies. In practice it is likely that, if there is a subsequent infringement, the same remedies can be sought again (other than delivery up of materials subject of the first infringement) so this may not be so great an issue.

The second issue is that in many cases the claim is for an enquiry into damages, and there will not be evidence of the full scope of infringement, so that the court will not have the material to assess any damages above a pretty nominal amount.

However, in the right cases – those where the defendant may well not respond – it may well be worth drafting the particulars with the possibility of seeking default judgment under CPR 12, by ensuring that there is a monetary claim and that there is sufficient evidence to assess this included in the particulars. It would at least be a lesson to IPOff that they should not be so cavalier with potential proceedings.

It is also worth noting that the judgment may be set aside under CPR 13. If it is set aside, then any claims (such as to an injunction) which were abandoned, are automatically restored (CPR 13.6). And if you have done your job properly, it is likely that this will be on conditions (CPR 3.1(3)). On the other hand if there really is a pretty reasonable argument on the defence and there is an expectation that the defendant will soon respond with it, in practice it may not be very worthwhile. It will, cost money, cause some small embarrassment, and not necessarily progress matters very effectively.

There are some other salutary lessons to be learnt from Media C.A.T. First, do not suppose that the court has necessarily completed all the steps they should be completing (either in sending out documents to defendants, if you leave that to them) or in telling you what has happened. Judge Birss observes (para 35) that the White Book comments that the CPR are somewhat vague as to whether the defendant must serve the defence on the claimant, and it may be that the Court has not sent it to you.

In this case this may have resulted in the professional advisors requesting default judgement in circumstances when it was simply not appropriate and making a representation to the Court that defences had not been filed when in fact they had. This is not intended as a criticism, but just an observation.

Patent attorneys are just as competent as solicitors to represent clients in the PCC – and it is time to make sure clients obtain the benefit of this.

1 comment:

Anonymous said...

This latest instalment in the (excellent) PCC series is a bit lacking in some crucial details regarding default judgments. What is does say is right, but it ignores the fact that all types of non-financial remedies are also available through default judgment. However, the process of obtaining it is different - an application (under part 23) rather than a request, must be filed. I see no reason why the modern PCC would not decide this application on the papers. The Mediacat judgment, because it involved so much shocking incompetence on behalf of the claimant's advisors, made what is an extremely straightforward and oft deployed process look complicated.