Recently the Working Group of the Intellectual Property Court Users’ Committee for reform of the Patents County Court, England and Wales, has published proposals for reforming the Patents County Court (PCC). The proposal aims at providing more affordable and effective Intellectual Property (IP) litigation. Studying the proposal may be fruitful since expensive and time-consuming IP litigation is also a problem in Canada.

According to the IPKat blog the proposal is both “constructive and sensible”, and the Working Group has not shied away from problems.

Patents County Court (PCC):

Established in 1990 by Parliament, the PCC intends to provide cheaper alternatives for simpler IP cases to the Patents Court of the High Court. The aim of the PCC is to meet the needs of small and medium sized enterprises. Although the name of the court is Patents County Court, this court also addresses cases regarding copyrights and trademarks. There are no restrictions on the complexity of cases that can be heard at this court or the amount of damages and costs awarded. Furthermore, cases can be transferred from the High Court to PCC and vice versa.

Although PCC was created with good intentions, it failed to meet its goals. IP litigations at PCC are both expensive and time consuming. According to the proposals for reform, there are numerous reasons for this. Firstly, the procedure of PCC is identical to the High Court and thus is costly. Secondly, since there are no limits on the awarded costs many enterprises, especially small ones, settle actions out of court due to fear of having to meet “substantial, and unpredictable, adverse cost awards if unsuccessful”. Thus, it seems that the current structure and procedure of PCC denies small enterprises access to justice. Thirdly, long battles over transfer of forum makes litigation both costly and time consuming.      

The Proposal:

To address the shortcomings of the system, the proposal aims at differentiating the PCC from the High Court and tries to provide incentives to stop forum shopping. The latter is done by limiting the costs and damages awarded. The proposal includes the following changes in procedure and cost recovery mechanisms:

• to require parties to present their cases by sequential written arguments;
• to impose robust case management;
• to permit or require disclosure, experiments, factual evidence, expert evidence, and cross-examination only where a cost-benefit test is satisfied, namely when the benefit of further material in terms of its value in resolving the issue justify its costs;
• to limit trials to one or at most two days;
• to limit recovery of costs to £50,000 in patent infringement actions and £25,000 in other IP cases;
• to limit available financial remedies to £250,000, this limit can be increased if needed;
• to change the name of PCC to Intellectual Property County Court, since PCC’s operation is not limited to patents.

Reform in Canada:

Since Canada like the UK is a signatory to Trade Related Aspects of Intellectual Property Rights (TRIPS) agreement, under article 41 of TRIPS, it is obligated to provide effective protection for intellectual property rights. However, the time consuming and expensive nature of the current IP litigations in Canada could, arguably, be barriers to meeting this obligation. Furthermore, similar to England and Wales, the costly IP litigations may also prevent some enterprises from having access to justice. Thus, Canada may also need to reform its IP litigation system. However, adopting the exact same proposed reforms may not be appropriate in Canada as there are differences between the legal procedures and damages awarded. For instance, in Canada the provincial courts and the Federal Court have jurisdiction over patent disputes. However, the majority (more than 90%) of patent litigation is heard at the Federal Court. Thus, it seems that forum shopping may not be a major problem in Canada.

Posted in IP, Patents