Proposals by the Patent Office to establish a government-backed litigation insurance scheme to enable small and medium-sized companies to bring cases defending their patents against infringement were given a mixed welcome by lawyers this week.

The proposals - published in a scoping study commissioned by the Patent Office - call for the establishment of a mutual association funded by subscription but also relying on government funding at the outset.


It would fund preliminary investigations to establish the scope and validity of patent actions and use a panel of lawyers to pursue litigation.


Edward Nodder, a partner in the intellectual property department of London firm Bristows, said: 'The problem with private insurance is that the premiums have been quite high and control of the litigation tends sometimes to vest with the insurer.'


Mr Nodder said that £50,000 - the proposed payment per case under the scheme - was considerably less than some patent litigations cost, but added that the capacity to pay for the opening shots of litigation might be enough in some cases to make the opponents back down.


Trevor Cook, a partner in the intellectual property department of London firm Bird & Bird, disagreed. He said: 'I don't see why patent litigation should be subsidised as opposed to other litigation. One should not forget that defendants have rights too.'