Sunday, 11 May 2014

How to bring or defend a small Intellectual Property Claim in the Intellectual Property Enterprise Court

Royal Courts of Justice, Home of the Small Claims Track of the
Intellectual Property Enterprise Court
Photo Wikipedia

Jane Lambert

This article is for those who find themselves in the Small Claims Track of the Intellectual Property Enterprise Court ("IPEC"). I have written it with litigants in person in mind but it should also be useful to lawyers who do not specialize in intellectual property ("IP") work and patent and trade mark attorneys who do not litigate regularly in the civil courts.  As I am trying to make this article as jargon free as possible I should add that "litigants in person" are parties to disputes who represent themselves in court

How to use this Article
There are already two excellent guides that you should download and read:
The General Guide applies to all small claims and not just IP ones.  The IP Guide is a little out of date in that it refers to the small claims track of the Patents County Court.  The Patents County Court was abolished on the 30 Sept 2013 and replaced by IPEC immediately afterwards. Nearly all the rules that applied to the Patents County Court apply to IPEC including the provision of a Small Claims Track,

I should stress that this article is intended to supplement those guides and not to be a substitute for them.  

Do you need a Lawyer?
It is nearly always a good idea to consult a lawyer if you think that you may have to go to court.  However, many of those who come before the IPEC small claims represent themselves. That is because the cost of hiring a lawyer is often disproportionate to the sums of money at stake and only a fraction of that cost can ever be recovered from the other side. As many parties do act for themselves the strict rules of evidence and procedure that apply in other courts are relaxed in the small claims track. However, even in the small claims track difficult points of law and procedure can arise.  It is possible to hire a lawyer (particularly a barrister under the Public Access rules) to help with part of the litigation and you should certainly consider that option. Paragraph 1.9 of the IP Guide and Section 2 of the General Guide contain more information on how and where to get legal advice and representation.

Have you got a Case?
One of those difficult points upon which you should take specialist legal advice if you possibly can is whether you have a case. The fact that you have suffered (or been threatened with) what you believe to be an injustice may not be enough. Courts have to apply the law which can lead to results that you may regard as unfair but, if that is the case, the sooner you find that out the better.

There are any number of reasons why a claim may fail.
  • The law may not be what you believe it to be. Copyright, for example, prevents people from copying certain types of literary or artistic work. It does not prevent others from making similar works if they can do that without copying the original.  
  • Maybe your right of action has not yet arisen. You can claim damages for infringement of a trade mark before the mark has been registered but your right to sue does not arise until after registration of the mark. 
  • Conversely, your claim may be statute barred, that is to say it should have been brought within 6 years of the wrongdoing. 
  • Perhaps the wrongdoing took place abroad (which could include Scotland or Northern Ireland) in which case you may have to sue there rather than here. 
  • Possibly you have agreed to resolve disputes of the kind in question to arbitration or some other method of dispute resolution in which case the court will expect you to get on with it in that forum.
These and many other potential problems are what a lawyer will look out.

You should also be aware that IP law contains a number of traps for the unwary. One of those traps is that you can actually be sued for threatening to bring an action for patent, registered design, unregistered design rights and trade mark infringement if your claim turns out to be groundless. This is called a "threats action". There is no such thing as a "threats action" in any other area of law.

You can get advice on those points for just a few hundred pounds and most clients find such advice is worth every penny. There are also a number of pro bono advisory schemes where you may even get the advice that you need for free. Paragraphs 2.2 of the General Guide and 1.9 of the IP Guide provide help with that.

Pre-Action Correspondence
Going to court is supposed to be a last resort and you will be expected to have done everything in your power to avoid legal proceedings.

As a first step you should write a letter before claim in accordance with paragraph 2 of Annex A of the Practice Direction - Pre-Action Conduct. It is particularly important to comply with that requirement in IPEC because CPR 63.22 (3) allows the defendant another 28 days to lodge a defence if you fail to do so. In composing your letter before claim it may be helpful to consult the Code of Practice for Pre-Action Conduct in Intellectual Property Claims which you can download from Reed Smith's website.

If you receive a letter before claim you must acknowledge it in accordance with paragraph 3 of the Annex within 14 days and respond in full in accordance with paragraph 4 within 28.

You should read the other side's letter very carefully and not dismiss it just because it does not sat what you want to hear.  If it disputes your case check the facts or legal arguments upon which the other side relies. If you find that some substance in what they say then you nay have to modify your claim or defence. If they suggest mediation, a meeting or other alternative means of resolving your dispute you must consider it very carefully.  If you reject their suggestion you must have a good reason for doing so.

Starting the Claim
Ignore the first 4 sub-paragraphs of paragraph 4.1 of the General Guide and any reference in the IP Guide to the Patents County Court. IPEC (including the Small Claims Track) is actually part of the High Court and it is based in the Rolls Building in London. IP claims can be brought in the Birmingham, Bristol, Caernarfon, Cardiff, Leeds, Liverpool, Manchester, Mold, Newcastle upon Tyne and Preston County Courts and the High Court offices known as "district registries" located in those cities and towns but there is rarely any point in suing in any of those courts particularly, if at least one of the parties is in London or South-East England. The provisions of CPR Part 63 that expedite procedure and limit costs do not apply to those County Courts or District Registries. A claim in any of those County Courts or District Registries will often be transferred to to IPEC either upon the request of one of the parties or its own initiative.

Statements of Case
These are formal statements by each party of its claim or defence.  They are often referred to as "the pleadings" which is the old name for such documents.   They should be drawn up very carefully. This is another matter upon which you should consider taking specialist legal advice.

The statement of case of the person who brings the action  (nowadays called "the claimant" but formerly "the plaintiff") is known as the Particulars of Claim. Read Section 4 of the General Guide (particularly paragraphs 4.4 to 4.10) and paragraphs 2.2 to 2.4 of the IP Guide for guidance on form and content.  In addition to the matters mentioned in those paragraphs, CPR 63.20 (2) requires you to state whether you have sent the person from whom you are claiming relief ("the defendant") a letter before claim of the kind that I have described above.  Also, CPR 63.27 (1) (c) requires you to state that you wish the claim to proceed in the Small Claims Track of IPEC in the Particulars of Claim.

If you are a defendant you usually have to respond to the Particulars of Claim by filing a document known as "an acknowledgement of service" with the court. If you believe that the claimant has no right to sue you (either because you are outside England and Wales and the alleged wrongdoing also took place elsewhere or for some other good reason) you may sometimes apply to have the claim struck out but that procedure is very risky and you should certainly seek legal advice before taking that step.

Otherwise you must follow up the acknowledgement of service with a document known as "The Defence" that indicates the parts of the Particulars of Claim that you admit, those that you deny and those that you can neither admit or deny and require the claimant to prove.  If you want to make a claim against the claimant you must combine your Defence with a Counterclaim.  You will need to counterclaim if you believe that the claimant's trade mark is invalid or should be revoked for some other reason. If you are relying on certain grounds of defence you must plead them specifically in your Defence. If you object to the case proceeding in the IPEC Small Claims Track you must say so and give your reasons in the Defence.

Whatever your defence the most important thing to remember is to file and serve it in time.   Pay particular attention to paragraph 2.4.2 of the IP Guide.

Case Management
In most IP cases there is a hearing known as the Case Management Conference ("CMC"). That does not usually happen in the Small Claims Track.  Instead, the court reads the parties' statements of case and any other documents that may have been submitted by the parties and makes directions for the disposal of the case.  Typical directions are set out in paragraph 6.5 of the General Guide.  The court will order a preliminary hearing only if an important procedural issue arises such as an objection to the case proceeding in the Small Claims Track or a request is made for a party to disclose the existence of, and produce, a specific document. Such hearings usually take place in one of the court rooms of the Royal Courts of Justice in the Strand.  It is very important to comply with the directions of the court - especially with its deadlines - if the case is to proceed on time and on budget.

Sometimes the court will invite the parties to resolve their dispute through mediation or some other form of alternative dispute resolution or "ADR".

There are essentially two kinds of ADR:
  • those that facilitate negotiation such as mediation or conciliation; and
  • those that refer the dispute to a trusted third part such as arbitration or expert determination.
The Intellectual Property Office provides a good and inexpensive specialist mediation service as do our chambers (see "Our IP and Technology IP Dispute Resolution Team" 28 Dec 2013 4-5 IP). We also run a specialist arbitration service (see "Arbitration of Intellectual Property and Technology Disputes" 6 Apr 2014).

Interim Injunctions
In many IP disputes, claimants seek orders known as "injunctions" to stop the other side from infringing their IP rights until trial or other resolution of the dispute.  Often such injunctions (known as "interim injunctions" resolve the dispute once and for all. It is not possible to get an interim injunctions in the Small Claims Track. If you need such an injunction you must bring your case in a list known as the "multitrack" in IPEC or any of the other courts that can hear IP actions.

The Hearing
Unless the court decides, or the parties agree, to resolve the case without a hearing, the parties and their witnesses will be heard in  the Royal Courts of Justice. Section 8 of the General Guide tells you what to expect. The judge will usually sit at  the associate's desk rather than the judge's chair and he or she and any lawyers present will wear business suits rather than robes. If both sides are represented by lawyers the hearing will be very much like any other trial in the civil courts except that the proceedings will rarely last beyond an afternoon. If one or more of the parties represent themselves the judge may relax the strict rules of evidence and procedure and take the initiative

Legal Advice and Representation
IP law is complex and not all lawyers are familiar with it.  Patent and trade mark attorneys are familiar with IP law but not necessarily with civil litigation.  You need someone who knows both IP law and civil litigation.

Most barristers who specialize in IP law are members of the IP Bar Association. Some of those barristers can accept instructions directly from the public without the intervention of a solicitor or patent or trade mark attorney. Since January 2014 it has been possible for barristers to apply to conduct litigation, that is to say the right to issue proceedings and do other work that has traditionally been done by solicitors.

Many but by no means all of the law firms that specialize in IP belong to the Intellectual Property Lawyers Association.  These include some of the most prestigious but also some of the most expensive in the UK. Shop around and check rates before engaging a solicitor.

Some but not all patent and trade mark attorneys act as advocates and conduct litigation.  Again, the best advice is to shop around.

Further Information
I have written two other articles that may help:

If you need any more guidance, give me a ring on 020 7404 5252 during office hours or fill in my contact form. You can also tweet me, write on my wall or send me a message through G+, Linkedin or Xing.