Costs in Trade Mark Oppositions

Did you happen to notice that while we were enjoying the Orlando sunshine at INTA2016 the UK IPO put out a new tribunal practice note 2/2016 relating to scale costs in oppositions. Here it is in case you missed it. It's not very exciting. In fact it's almost depressing.

The general principle in the UK is that the winner is reimbursed his costs by the loser. It sounds as if the winner should therefore not be out of pocket. This is not the case. It is sometimes difficult for clients to understand that. In the case of UK trademark opposition proceedings the registry uses a nominal scale of costs which bears no relation whatsoever to the costs that you might be charged by even the most economical of professional advisers.

So costs don't put the winner back in the position he would have been had he not had to fight the contest. What are they for then? I think the philosophy is that they're supposed to act as a deterrent to bringing oppositions. I am ready to be corrected on this if you have any better justification for this irritating procedure. As the practice note explains, they are also available to deal proportionately with unreasonable behaviour. What is unreasonable is a very subjective thing and hearing officers have quite diverging views on the behaviour of some parties. It really depends on the lens that you are looking at it through. If you are facing a bad faith claim it is always unreasonable. If you are making one it is totally reasonable.

Trademark owners now must bring oppositions if they want to stop conflicting marks getting on the register. Although they can do this as litigants in person, it isn't ideal for them or their adversary or the office. Therefore, in the interests of efficient opposition procedure we need to reduce complexity and encourage competent professional participation.

If you commenced your opposition after 1 July the new scale applies to you. This is going to be fun on consolidated cross oppositions. But not such fun because the difference between the two scales is minuscule. In fact the scales are pretty minuscule and strangely remain focused on the largest amount of costs being reserved for the hearing not its preparation. Personally I think it might be a good idea if we either had fixed costs (like the silly scale used by EU IPO were all representation is deemed to cost €300 or €550 in the case of appeal even if the winning party didn't participate)  or none at all.

Fast Track costs are still capped at £500 and even I cannot offer a client that low a fee for the most streamlined no-negotiation opposition. This may be acting as a deterrent to the use of fast-track oppositions. The other major deterrent to the fast-track opposition is the upfront requirement to demonstrate use which makes them much more expensive than ordinary oppositions if your earlier rights have any seniority.

With Brexit about to happen we no longer have to follow harmonisation rules. Many are useful but the inundation of earlier rights that community trademarks became prevented the UK from giving trademark owners a reasonable degree of protection. We can rethink this now.

Reaching the Cap in the Intellectual Property Enterprise Court

A splendid Cap

For claims started after 1 October 2013 it is going to be a little easier to reach the £50 k and £25k caps on Practice Direction 45 have just got a bit richer and are in rounder numbers. You can find them in the Practice Direction Making Document
costs for trials and enquiries as to damages respectively. This is because the Tables which set out the maximum costs of each stage as set out in CPR
and below.  





Table A

Stage of a claim                        Maximum amount of costs
Particulars of claim                                                    £7,000
Defence and counterclaim                                         £7,000
Reply and defence to counterclaim                           £7,000
Reply to defence to counterclaim                              £3,500
Attendance at a case management conference           £3,000
Making or responding to an application                     £3,000
Providing or inspecting disclosure
or product/process description                                £6,000
Performing or inspecting experiments                       £3,000
Preparing witness statements                                   £6,000
Preparing experts' report                                         £8,000
Preparing for and attending trial and judgment         £16,000
Preparing for determination on the papers               £5,500

Table B
Stage of a claim                                                          Maximum amount of costs
Points of claim                                                              £3,000
Points of defence                                                          £3,000
Attendance at a case management conference                £3,000
Making or responding to an application                         £3,000
Providing or inspecting disclosure                                 £3,000
Preparing witness statements                                        £6,000
Preparing experts' report                                             £6,000
Preparing for and attending trial and judgment              £8,000
Preparing for determination on the papers                    £3,000

Three Judges Chatting

Last night's excellent seminar hosted by Sir Hugh Laddie of UCL gave a platform for three judges from three jurisdictions to address their concerns about the patent system. The audience was drawn from all sections of the profession, patent attorneys, barristers and solicitors with a good sprinkling of SOLO members amongst the generally swanky city suits. It was a complacent audience and you sensed that it did not care too much when David Kitchin expressed his concerns that the Patents Courts lists were full but only with cases of those spending millions on settling their disputes.
Judge Rader gave us a masterclass in the double-edged compliment but, to be fair, the insulting flattery game had been started by Sir Hugh Laddie. Apparently the one thing the global IP judges have in common is a school boy camaraderie of cheek. Randy's substantive address was about the US approach to the grant of injunctions, which he attributes to English principles of equity. No doubt it is expedient to prevent abuse of the patent system by those with patents that relate to a relatively unimportant contribution. The US has a problem with trolls, but no compulsory licence provisions so the judiciary has had to invent them. There was a certain amount of discussion of trollism but there were many who benefit from the University IP market so there was little agreement on how to define them. The ownership of trivial patents that are infringed in big established and financially successful products or services like EBay or mobile phones seems to be a key feature.
There was some publicity for the Burdon plan to reduce litigation costs and several times it was stated that the Patents County Court had failed. Costs caused everyone lots of problems much to the amusement of Randy. Our (former) European judge, Jan Brinkhof smiled inscrutably knowing that mega-costs are not such a problem in mainland Europe.
The EPO came in for some criticism with one member of the audience complaining that the EPO opposition and appeal procedures were so cheap and accessible that his rich clients did not enjoy the exclusive use of resources as they did in the English Patents Court. David Kitchin did have some sympathy about the slowness of the EPO and said it was less likley today for UK cases to be stayed pending resolution by the EPO
Sadly we got a good understanding of the problem, but no solutions to the accessibility to patent resolutions for players with fewer resources than Nokia and Merck.
We look forward to more provocative seminars from IBIL. Thank you.