Tuesday, 17 May 2011

PCC Page 27: Two more bricks in the wall

In an effort to make things
clearer for litigants, every
brick is labelled "brick" ...
Masterfully managed by by the Chartered Institute of Patent Attorneys (CIPA), the PCC Pages seek to explain how litigation works in the recently-revamped Patents County Court (PCC) for England and Wales, taking as its theme a dispute between Cautious Co and IPOff Ltd as to whether IPOff has infringed the IP rights of Cautious in its robotic octopus. In this episode, the 27th, CIPA President Alasdair Poore takes time out from the constant round of riotous partying to which participants of the annual International Trademark Association meeting must reluctantly subject themselves, in order to bring us this, the next instalment:
Cautious & Co are still fully engaged with their patent and design right infringement proceedings in the Patents County Court. Their patent attorney is enjoying a break in San Francisco.  It is raining just like England – well, wetter actually. 

In a damp moment, reflecting on IPOff’s director’s break at Christmas snorkeling in the sun, Cautious’s patent attorney has news of two more bricks in building a solid understanding of PCC procedures: publication of the PCC Guide; and a judgment on assessment of costs.  Boring stuff?  Perhaps, but stuff which means that patent attorneys can be more confident in advising clients to use the PCC.

Brick 1:  The PCC Guide is available here via PatLit and CIPA.  It will be published on the Court’s website soon -- but just how long it will take to get there is not yet clear.

Brick 2:  Costs: In Dame Vivienne Westwood v Anthony Edward Knight ([2011] EWPCC 11), Judge Birss QC has assessed costs.  His judgment explains in detail the process for assessment, including assessment of individual elements and how the maximum limits will be applied.

The general approach is set out in the Civil Procedure Rules, CPR 44.3, subject to CPR 45.42. This provides that the Court has a discretion (CPR 44.3(1)), generally the unsuccessful party will be required to pay the successful party’s costs (CPR 44.3(2)), and the court should consider the conduct of the parties, whether a party is partly successful (CPR 44.3(4)), and complexity (CPR 45.42(4)):

The costs recovered are limited in two ways: there is an overall costs cap of £50,000 (for the proceedings on liability), after taking into account any set off of costs due to the other party; and there is a costs cap for each individual stage (CPR 45.42 and PD 43-48 25 and Table A)

In this case there was no set off – all the costs were to be awarded in favour of Dame Vivienne Westwood.

In carrying out the assessment, HHJ Birss QC made some general points:
·         In many PCC cases the costs may not approach the £50,000 limit (para 19) – see the comments on complexity below;
·         The court has a discretion in the amount of the costs, but it is clear that the limits for each stage, and for all stages are intended to be adhered to.  So, although departing from these limits is possible, other than in cases where the rules specifically provide for it  (abuse and certificate of contested validity (CPR 45.41) the discretion to do so will be rarely, if ever, exercised.  It will only be in the “most rare and exceptional case” (para 20);
·         The costs awarded will depend on the nature and complexity of the case (CPR 45.42(4)) (para 24), and in simple cases there is no reason to suppose that the costs need reach the stage limit.  In this case, with several trade marks, passing off and copyright infringement, the claim was quite complex (para 37).
·         The demarcation of stages is to be understood in broad terms (par 28 to 30), so that, for example, pre-action costs may be covered by preparation of a statement of case if they contribute to identifying the content of the statement of case (para 30);
·         The “Defence and Counterclaim” stage can include (depending on the facts) the claimant considering the defence (para 33).

And procedurally:
·         Consider whether costs are payable to the other party (ie in respect of any element where the losing party is entitled to payment of some of their costs) (para 21);
·         Break down, and provide a “statement of costs” for each of the relevant stages shown in the Table of stages.  Preferably provide this in a single document (signed by the representative) (para 22);
·         It is helpful to provide a summary table of costs for the stages as well (para 23);
·         The Court will assess the appropriate costs for each stage (taking into account complexity as noted above (see para 24)).  If they exceed the maximum, then they will be limited to the maximum (para 25);
·         The Court will then add the costs for all stages.  (Note that one “stage” may occur more than once.  For example there were three applications in addition to the case management conference in this case.)  If the total exceed the maximum it is limited to the maximum.

In this case, part of the costs were incurred in the High Court.  These were (summarily) assessed on a High Court basis.  Also VAT was due on most but not all of the amount (and VAT falls outside the limit on costs).  The approach taken was to apply VAT to the assessed amount after deducting any amount not subject to VAT, although the option was left to apply a different approach in other cases.  Finally interest was applied by choosing some date, probably where about half the costs have been incurred, and applying interest to all the amount due from that date.

The judgment also illustrates some of the reasoning and is a useful guide to carrying out an assessment.

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