The Patents County Court has undergone a major makeover, to make it the venue of choice for small-to-medium-sized intellectual property disputes.

Intellectual property is generally seen as being a good thing, both for businesses or the individuals that own it, and for society at large. Patents encourage and protect innovation, and cause inventive knowledge to be made public, while trade marks act as a guarantee that a particular product or service comes from a particular provider. Copyright and design rights encourage creativity and protect originality.

IP rights are not much use, though, if their owners cannot enforce them. Litigation can be an expensive business, and innovative small and medium-sized businesses might generate a raft of IP rights, but find themselves unable to enforce or defend those rights due to the high cost and risk of IP litigation. Even big business can baulk at the cost.

This high cost and risk has also led to UK courts losing out to other European jurisdictions. IP can be international in nature, and parties sometimes have a choice of venues in which to litigate. Some European jurisdictions – especially Germany – have a reputation as being considerably less expensive places than the UK in which to litigate IP, and some litigants have been voting with their feet.

To address these issues, in 1990 the Patents County Court (PCC) was set up, with the hope that it should become the venue for less complex and lower-value IP disputes (despite its name the PCC was not just set up for patents – it now has clear jurisdiction over all IP rights, including UK and Community trade marks, passing off, designs, and copyright: Civil Procedure Rule 63.13 & Practice Direction 16.1). But the PCC experienced mixed fortunes. Its early years saw doubts as to its effectiveness. Hopes were boosted in 2001 with the appointment to its bench of the highly respected IP QC Michael Fysh. However, procedure and costs in the PCC were still not so very different to those in the High Court. Many litigants still preferred to take their chances in the High Court, or to stay away altogether.

In June 2009, a consultation paper with proposals for the reform of the PCC was published by the Intellectual Property Court Users Committee. The response from stakeholders was almost universally positive and some major reforms came into force on 1 October 2010, under part 63 of the Civil Procedure Rules and its accompanying PD. The reforms coincided with the retirement of Judge Fysh, and set the stage for an energetic young QC, Colin Birss, to take the changes forward from the bench.

One of the most striking changes is the introduction of a cap in the PCC on recoverable costs (CPR 45.42). These are capped at £50,000 for the final determination of liability, and at £25,000 for enquiries as to damages or accounts of profits (questions of liability and of damages are generally tried separately and consecutively in IP cases). In addition, a scale of costs has been introduced, with a maximum amount recoverable for each of the main procedural stages of the claim (Costs Practice Direction Section 25C). A party may, if it chooses, incur costs that exceed these caps, but the excess costs will not be recoverable from the losing party, which is, of course, a disincentive to incurring them in the first place.

In addition, strict procedural controls are designed to help ensure that costs stay within these boundaries. The rules emphasise the significance of the parties’ statements of case, each of which must set out all the facts and arguments on which the party serving it relies.

Thereafter, there is no automatic right to disclosure, or to the other evidence common to IP disputes: product or process descriptions; experiments; witness statements; experts’ reports; cross-examination at trial; or even written submissions or skeleton arguments. For the court to order any evidential step, it will only do so in relation to specific and identified issues, and if the benefit of the further material appears likely to justify the cost of producing and dealing with it (CPR 63.23 & PD 29). In fact, where possible, the court will determine the claim solely on the basis of the parties’ statements of case and oral submissions (PD 31.1).

The idea behind this procedural asceticism is that, in many IP disputes, you simply do not need a glut of evidence. For example, if you are alleging that a particular patent is not valid because the invention described in it is not novel, the court should in theory be able to hold in one hand the prior art that pre-dates the patent, and in the other hand the patent itself, and simply compare the two. Disclosure documents or witnesses-of-fact, so the theory goes, are generally superfluous to that simple comparison.

Under the new rules, the PCC will deal with interim applications without a hearing (unless it considers a hearing necessary, CPR 63.25.3), and the costs of applications will generally be reserved for summary assessment at the end of the trial (CPR 63.26). Parties can still apply to transfer the claim from the PCC to the High Court, but the application must be made before or at the case management conference, and any subsequent application to transfer will only be considered in exceptional circumstances (CPR 63.25.5). As regards the trial itself, the court will seek to ensure that it lasts no longer than two days, and will exercise strict control over cross-examination (PD 63.31.2).

Since the new rules came into force, a couple of PCC judgments have clarified some issues. In Technical Fibre Products Ltd & Ors v David Walton Bell & OrsM ([2010] EWPCC 011 2010 WL 4093074), the PCC held that the new rules do not apply to cases which were pending before it before 1 October 2010. Another case, ALK-Abello Ltd v Meridian Technologies & Ors [2010] EWPCC 014, set out the factors to be considered on applications to transfer proceedings to the High Court. These include the financial position of the parties, the value of the claim, the complexity of the issues, the estimated length of the trial and the importance of the case to the public.

This is overdue: a really effective UK court that allows parties to enforce or defend their IP rights without having to bet their house on the outcome. Many smaller IP owners have assumed that the courts are not for them, and this vigorous new procedure and vigorous new judge is the court system’s empathetic response. Larger IP owners too will be looking with interest at what might be a much more cost-effective forum for their less high-value disputes. Practitioners should spread the word.