Monday 22 November 2010

Shall We CAP Damages in PCC Litigation?

The IPO is conducting a short consultation on the implementation of the limit proposed in the Jackson Review on the financial remedies available in the Patents County Court. Originally the Intellectual Property Court Users Group proposed that this should be £250k but upped that to £500k before their final report in July 2009. This indicates a certain arbitrariness about the figure and the IPO would like some justification.

To put a Cap on the Damages Consultation?
Paul Cole has circulated members of the Patent Agent Litigator's Group encouraging us to argue against the cap. We do not need one. He points out that the IPO has no cap in its patent infringement jurisdiction under section 61(3) of the Patents Act 1977. However that jurisdiction is pretty moribund as both parties need to agree on going to the IPO.  The IPO does not deal in trademark infringement at all.

The new Patents County Court Judge has had his say  in an early case, Alk-Abello v Meridian which he kicked out of his court to the High Court.  He opined:

  • Why does value matter? The answer in my judgment is to emphasise what the Patents County Court was set up to achieve. 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. 
In this case an injunction was in issue. Indeed in my experience of David and Goliath litigation, the Injunction is ALL that matters. Surely the PCC is not just for SMEs battling it out amongst themselves. To me its most important role is in the David and Goliath matters. David cannot usually ask for an interlocutory injunction for fear of a cross-undertaking in damages. If this limit affects that cross-undertaking £500k is still enough to have David cowering. However the PCC can offer speed and simplicity to a final injunction if appropriate with a manageable costs cap.

The IPO have offered an Impact assessment based on "cost savings for business through re-positioning cases previously heard in the High Court into the cheaper County Court (achieved by limiting the value of claims heard in the lower court)". This is not a consequence of the Cap on Damages it is a consequence of the already introduced Cap on Costs, which is BRILLIANT.  Do we need to go this extra step which could come back to haunt us. The Judge has already clarified the cases he wants. Why waste time with a Cap that could be wrong. Forget it. The damages are what the damages are shown to be.

We cannot expect the IPO to go reading blogs so we have to respond to the consultation. Comments would be greatly appreciated.

1 comment:

  1. I have been discussing this issue with a number of people and a couple of points that have been made in favour of a higher or no cap are:
    Complexity is not directly linked to value and it is the complex cases including those where expert issues are involved are better in the High Court.
    The inequality of size is a major concern. Think of a University who believes their patent is infringed by a large corporation. If they choose to wait and ask for an account of profits the figure could in some cases be substantial because of the duration of the infringement.
    A damages cap that is low will mean that a settlement offer anywhere near the cap will have to be accepted regardless, if the claimant wants the protection of the costs cap. The original £250k figure would certainly make the jurisdiction of little use except for injunctions.
    If we have to have a cap then lets just exclude the pharmaceutical cases and that could be done with a cap of, say, £2million.
    The IBIL lecture on claim construction last week showed that there is often an element of lottery involved in claim construction and scope. If thats your boundary, ADR offers you a better resolution rather than fighting two rounds in the courts.
    I have not yet found anyone to support the cap but lots of folk are not interested, which is sad.