UK: Cost-Effective Patent Actions

Last Updated: 7 January 2008
Article by Ralph Cox

Patent litigation has long had a reputation for being expensive. As Lord Esher said in Ungar v Sugg in 1892:

"A man had better have his patent infringed, or have anything happen to him in this world, short of losing all his family, than have a dispute about a patent. His patent is swallowed up and he is ruined."

The Courts have introduced various measures over the last decade or so to combat this perception and provide a cost-effective means of litigating patents, particularly for smaller and medium sized enterprises. To paraphrase a judge's recent observation, why pay for a Rolls Royce procedure when a Ford will do the job?

DISCLOSURE & DESCRIPTIONS

One of the earlier measures introduced during the 1990s was to limit disclosure (or discovery), in particular giving the alleged infringer the option of providing a product and/or process description in place of disclosure. The use of descriptions led to some early issues over accuracy with, in one case, a trial being adjourned while inadequacies in the description were rectified (Pifco v Philips). In another indemnity costs were ordered against the alleged infringer for, as the judge saw it, trying to control the information made available to the court and claimant through the description (Taylor v Ishida). Accuracy will always be a potential difficulty with descriptions but, where there is doubt, an inspection should be conducted, possibly attended by the judge to introduce him to the technology, and it may also be necessary for the party providing the description to offer a witness at trial to prove its accuracy.

THE PATENTS COUNTY COURT

A more recent measure has been the revitalisation of the Patents County Court (PCC) in London following the appointment of His Honour Judge Fysh QC in August 2001. The PCC was set up with the express purpose of providing a less expensive forum for smaller companies than the High Court. As well as patents, it has jurisdiction to hear copyright, registered and unregistered design, trade mark and passing off actions. While the same procedural rules apply to the PCC as to the High Court, there have been a number of statements from the judiciary on the role of the PCC and the level of costs.

Thus on costs the Court of Appeal has said that "When [the PCC] was set up it was envisaged by the Lord Chancellor that it would apply procedures which were cheaper to enable medium sized enterprises and individuals to litigate without being deterred by costs. The figures of costs claimed in this case by the patentees are nearly £250,000 for a two day trial in the County Court do not reflect that which was envisaged by the Lord Chancellor when he set the court up." (Warheit v Olympia Tools)

In the Halliburton case last year, it was observed by Mr Justice Pumfrey that "the subject matter of the patents was complex and more than justified the 15-day estimate that the trial ultimately received. The proceedings were not suitable for the County Court and should not have been started there." (Halliburton v Smith)

THE STREAMLINED PROCEDURE

Following a similar approach to the introduction of product descriptions, the patents judges conducted a cost-benefit analysis of the standard steps in a patent action. They concluded that certain steps generally gave little benefit compared to the costs involved and so could justifiably be dispensed with in appropriate cases. These steps were experiments, disclosure and full cross-examination at trial. This led to the introduction a few years ago of the streamlined procedure in which:-

  • there would be no disclosure or experiments;
  • there would be limited cross-examination at trial on permitted issues only; and
  • the trial would normally be limited to 1 day within about 6 months.

These provisions can be varied if needed, e.g. to allow limited disclosure on a specific issue, and a description of the alleged infringement would still be required. HHJ Fysh QC commented in early 2003 that he expected the streamlined procedure to become the norm in patent and registered design cases in the PCC. More recently the High Court has also become firmer in applying the procedure as well as more aware of the need to make the UK an attractive jurisdiction. This has been shown by 2 judgments handed down by Mr Justice Pumfrey last summer. In the first, Canady v Erbe, on ordering the streamlined procedure for an early trial on infringement only, he said:-

"Those of the profession who admire the German way of doing things will be able to compare a streamlined trial of the issue of infringement with the manner in which the same issue would be disposed of, let us say, in Düsseldorf and draw what one can only hope will be helpful comparisons".

In the second, RIM v Inpro, while retreating from Mr Justice Laddie's view that "it should be the exceptional case where the Court decides that streamlining is inappropriate", Mr Justice Pumfrey nonetheless approved the streamlined procedure order made in June for trial in November. In his view it "was not possible that the parties would not be ready" for the November trial and so refused to move it by more than a few days (to avoid a diary clash for one of the barristers involved).

CONCLUDING COMMENTS

The procedures enabling cost-effective patent litigation have been in place for several years. To date the Courts have largely left it to litigants to decide between themselves whether to use them or not. However, the indications are now that the Courts will be more pro-active in ordering the streamlined procedure (in whole or in part) and parties will find it increasingly difficult to argue against its adoption.

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