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A Quiet Revolution?

Tom Mitcheson QC of 3 New Square looks at the way that the courts in London have adapted to deal with intellectual property disputes in recent years:

"Whilst recent changes in the English courts may be more accurately characterised as evolutionary rather than revolutionary, together they point to a system and profession which has adapted to the needs of domestic and international litigants alike, and which will continue to do so to meet the challenges which lie ahead."

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For many years litigants able to choose their forum within Europe regarded English proceedings as at one end of the litigation spectrum.  Nearest the US geographically, linguistically and culturally, English IP disputes had been seen as most resembling their North American counterparts in terms of length, thoroughness and cost.  These parallels arose primarily from the requirement on the parties to give disclosure of relevant documents and as a result of witnesses being subject to sometimes lengthy cross-examination at trial in front of experienced technico-legal judges.  As a result, whilst both the winning and losing parties commonly felt that they had had a fair trial, this may have come more slowly and at greater expense than in other competing jurisdictions.  Further, some litigants felt shut out completely by the risk of losing and have to pay the prohibitive costs of the other side.

 

The above caricature is no longer true.  In recent years the intellectual property courts in London have adapted in a number of significant ways to take into account the needs of their customers.  Reforms have been implemented both for “big-ticket” patent cases in the specialist Patents Court division of the High Court and also in relation to less valuable cases involving other intellectual property rights and typically brought by small or medium-sized enterprises (SMEs).  These smaller cases now have a home in the Intellectual Property Enterprise Court (IPEC), a new division of the High Court and replacing the Patents County Court.  The new regime for both types of case can characterised in the following ways.

 

Speed in obtaining justice is now recognised as the major requirement of all litigants.  Cases are expected to come to trial about a year from issue of proceedings, and even more quickly where emergency interim relief is sought pending the hearing of the main action.  Trial dates are arranged many months in advance, and are only rarely moved once fixed.  Appeals come on even sooner, usually within nine months of the order following judgment.  So in the majority of cases a first instance decision and an appeal will take about two years.  Whilst the time to first-instance trial may be slower than some of the fastest European courts, the time to reach both a first and second-tier decision is unrivalled.

 

The cost of English litigation generally has been the subject of the recently instituted “Jackson” procedural reforms, which are designed to reduce expense across the board.  Parties in cases worth less than £2 million are now required to submit costs budgets to the Court at the start of proceedings, and have to get permission to make adjustments.  Failure to do so will result in costs being irrecoverable.  In the IPEC, the recoverable costs of proceedings are capped at £50,000 and court time is limited to one or two days.  Combined with the timetables outlined above, this means that SMEs can now bring intellectual property proceedings both quickly and cheaply.  As a result there has been a huge growth in the bringing and resolution of smaller scale disputes.

 

The desire to limit the costs of proceedings has also resulted in limitations being imposed on some of the excesses of the old regime.  Disclosure is no longer automatic, and will be limited to those categories of documents which are clearly relevant to the dispute, and will only be ordered if obtaining such documents can be achieved proportionately.  Whilst the ability to test the written evidence of a fact witness or expert via oral questioning before the Judge is still seen as a central part of English procedure, cross-examination may also be limited to specific topics, or by time.  In every case the court will be concerned to keep the expenditure of the parties proportionate to the value of the litigation, and consider the interests of other court users.  So whilst litigants in multimillion-pound cases (where costs may be less important to the parties) may experience little difference in the depth of investigation allowed, smaller cases will have to be conducted on a much tighter budget.  There is no longer a one-size-fits-all approach.

 

As for the relationship between the national court and granting authorities, unlike in many European countries, there is no automatic stay of validity proceedings pending the outcome of opposition proceedings in the European Patent Office or OHIM (which grants European trade marks and designs).  On the contrary, where national proceedings are likely to be resolved more quickly, a stay is unlikely.  Accordingly it is much easier to get an early resolution of the dispute in the UK than in some other European countries when there are concurrent central opposition proceedings.  Further, there is no bifurcation in the UK and infringement and validity proceedings are heard together.  Non-practising entities with weak patents are therefore much less likely to be able to have infringement issues determined without a comprehensive assessment of validity also taking place.

 

The quality of the English intellectual property judiciary has traditionally been widely admired throughout the world.  The breadth and depth of talent has only increased in recent years.  We are fortunate to have multiple judges with significant IP experience and international reputations at all levels, from the Supreme Court down to the IPEC.  Moreover, judges partake in regular meetings with their European counterparts and this has led to a greater understanding across jurisdictions and a greater degree of consistency in decisions throughout Europe.  This consistency of approach has enabled lawyers to be more confident in advising clients as to the likely outcome of disputes in advance, to the advantage of all.

 

At the same time, flexibility has been retained.  The reforms to increase efficiency have done nothing to limit the flexible nature of the relief which the English Courts will grant in appropriate cases.  Some recent examples illustrate this.  In Eli Lilly v Human Genome Sciences [2012] EWHC 2290 (Pat), the Patents Court agreed that it could give declaratory relief to the claimant in relation to the possibility of the defendant applying for an intellectual property right sometime in the future.  The Court held that it had jurisdiction to give such relief and would do so where the commercial considerations justified it.  In Lucasfilm v Ainsworth [2011] UKSC 39 the Supreme Court held that, provided the defendant could be served, the English courts have jurisdiction to determine a claim for infringement of foreign copyright.  This principle has been applied more recently in the field of patents in Actavis v Eli Lilly [2013] EWCA Civ 517, where the Court of Appeal confirmed that actions for a declaration of non-infringement of the German, Italian, Spanish and French equivalents of a UK patent could all be heard in the English High Court.  Flexibility is also apparent in the alternative ways in which IP disputes may be resolved in the UK, for example by arbitration or mediation, and alternative dispute resolution is encouraged.

 

In conclusion, the English intellectual property courts have adapted and modernised in recent years to retain their best traditions whilst at the same time adopting some of the more desirable characteristics of other jurisdictions, in particular increased speed at reduced cost.  This has continued to attract big global disputes (e.g. Apple v Samsung, HTC v Nokia) whilst at the same time allowing a new breed of IP litigant to obtain speedy yet quality justice at much reduced financial risk.  The increasing amount of IP legislation emanating from Brussels has resulted in a more Euro-focused and collegiate approach from domestic judges.  Yet at the same time, the English courts have not hesitated to ask the CJEU to clarify the law where the legislation is unclear, as for example in the recent spate of references concerning supplementary protection certificates.

 

As a result the future appears bright for barristers, solicitors and patent and trademark attorneys involved with intellectual property litigation in the UK, particularly with the coming of the Unified Patent Court (UPC).  The establishment of a central division of the UPC in London to hear cases relating to chemistry, pharmaceuticals and life sciences will play to the strengths of litigators with increasing experience of one or two- day proceedings in the EPO, the Patents Court and the IPEC.  Whilst recent changes in the English courts may be more accurately characterised as evolutionary rather than revolutionary, together they point to a system and profession which has adapted to the needs of domestic and international litigants alike, and which will continue to do so to meet the challenges which lie ahead.

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