Preliminary - Conduct Before Litigation

We have in the United Kingdom a Code of Conduct which stipulates what steps a person/company should take before suing someone else.  The general principle is that the person/company wishing to sue needs to assist the defendant understand the nature of the complaint and needs to provide the defendant with the opportunity to stop the activities the subject of the complaint.  Failure to follow the Code of Conduct can result in disadvantages against the person/company which sues.

Of course, there are circumstances where it is not appropriate to forewarn an infringer before commencing litigation, in which case the Code will not apply.  This may, for instance, be in cases where evidence or goods may disappear if not seized.

Specialist Courts

We are fortunate in the United Kingdom to have a variety of legal forums in which to litigate intellectual property rights and that all of these systems are presided over by specialist Judges or Examiners.  Thus all trials will be held before a Judge who has a lifetime of experience and expertise.

Our Judges also try to conclude a case as quickly and efficiently as is reasonable, often within one to two years.  As litigation is stressful, time consuming and does not normally achieve a resolution to the problem until after trial, having a fast system is often a great advantage. 

Our Courts are also constantly pressurising litigating parties to keep costs down.  Although the cost of litigation in the United Kingdom can vary widely, our different systems do allow for selecting a route which can keep costs reasonable, as we explain below.

Infringement and Validity

In the United Kingdom, the issues of infringement and validity (if brought by the fighting parties) are heard at the same time and by the same Judge.  It is not a question of having one Court or Judge deciding on validity and a different Court or different judge deciding on infringement, as happens in some countries.  Thus, there is no risk of having the scope of, for instance, a patent being interpreted one way for validity and a different way for infringement by a different Judge.  The patent is interpreted the same way having regard to all of the issues of validity and infringement.  Moreover, this is all carried out during the trial itself, thus when all the issues and evidence are discussed in full.

The UK Litigation Forums

We are fortunate in the United Kingdom to have a variety of Court systems in which to litigate intellectual property rights and that all of these systems are presided over by specialists in the field.  Thus all trials will be held before a judge who has a lifetime of experience and expertise.

Furthermore, it is possible in many cases to conclude litigation in a relatively short period, the aim being within one year to 18 months.

The cost of litigation in the United Kingdom can vary widely, although our Courts are constantly pressurising litigating parties to keep costs down.  Furthermore, our different litigation Court systems do allow for selecting a route which can minimise costs, as we explain below.

It is important to note that in the United Kingdom, infringement and validity are heard at the same time by the same judge.  It is not a question of having one Court or judge deciding on validity and a different Court or different judge deciding on infringement.  Thus, there is no risk of having the scope of a patent, for instance, being interpreted one way for validity and a different way for infringement, the patent is interpreted the same way having regard to all of the issues of validity and infringement.  Moreover, this is all carried out during the trial itself, when the issues and evidence are discussed in full.

 Our principal Litigation Forums are:

• The High Court
• The Intellectual Property Enterprise Court (IPEC)
• The UK Intellectual Property Office

General Considerations Applicable to All Litigation Forums

Being Open and Truthful

The UK litigation Rules require that the legal representatives of all the parties are candid with the Court and must not in any way mislead the Judge or Judges.  Moreover, litigating parties are required in law to disclose all material relevant to the case, even if this is disadvantageous to them.

Failure to be open or truthful can lead to severe penalties.

It should be borne in mind, however, that communications between a Patent Attorney or lawyer and the client are legally privileged, that is they are not disclosable to the other side.

Experts

It is not normal for our Intellectual Property Courts to appoint their own experts.  However, any expert used by any of the parties has a primary duty to the Court and not to their “client”.  It is a requirement that this be explained to any expert one wishes to use.

Availability of Personnel

As the litigation timetable is at times very tight, sometimes having only a few days to prepare pleadings or evidence, it is important that a litigant party ensures that all of the relevant personnel are available at short notice (be it senior management to take decisions or people tasked with providing assistance such as documents and other evidence).

Alternative Dispute Resolution

Our Courts prefer the litigating parties to come to a settlement before trial, if this is possible.  The parties will therefore be expected to try to reach an agreement using one of the accepted procedures, typically mediation or arbitration.

Reaching agreement which avoids going to trial can often be the best outcome for all sides.  It concludes the dispute early, avoids heavy litigation costs, and can often achieve a result which is better than that which a Court can award (such as a licence or other advantageous collaboration).

Costs

As a general rule in UK litigation, the winning party is entitled to its costs.  In practice not all of one’s costs are recovered.  A typical amount is between 60-80%.  This means that the winning party can end the litigation having spent relatively little but the losing party is lumbered not only with its own costs but also a major proportion of the other side’s costs.

The litigating parties also have a duty to conduct the litigation in a manner which is fair and efficient to all sides, that is which does not seek to force the other side to incur higher costs than would be reasonable.  Failure to conduct litigation efficiently can lead to costs penalties, even against the winning party.

The High Court (The Patent Court)

This is the “main” Court for intellectual property litigation and deals with complex and more valuable cases.  The High Court has a specialist Intellectual Property division, called the Patent Court, which hears all cases of intellectual property litigation.

The Judges are former lawyers, senior barristers, who have decades of experience in intellectual property litigation.  They thus have a wealth of knowledge and expertise in the field.  In High Court cases, a single Judge will hear the case, which normally lasts a few days.

A barrister will advocate (argue the case) at trial and will normally provide advice throughout the written part of the litigation procedure.  In addition to a barrister, each litigating party will normally use a patent or trade mark attorney and one or more solicitors.  Williams Powell has in-house expertise in litigation, Robert Jehan being a qualified Patent Attorney Litigator.  Thus, we are able to conduct litigation in the High Court without the need for a solicitor as well.  However, many cases include legal or procedural complexities which lie outside the area of intellectual property law, making it advisable to use a solicitor as well.  It should be borne in mind that well organised litigation, even with a plurality of legal representatives, need not add to the overall costs.  In some cases this can actually reduce the total costs of a case.  Williams Powell has many years of experience in managing litigation, both in the UK and abroad.

Claims and Counter-Claims

A law suit (claim) may be commenced for a number of reasons, the most common being for infringement or invalidity of a right.   A claim brought under one of these heads will usually result in a counter-claim for the other.  Thus, a claim of infringement brought by a patent proprietor will normally result in the defendant counter-claiming for invalidity, and vice versa.

Both the claim and the counter-claim will be combined into a single case, which will then continue under a common timetable and procedure and be heard at the same trial.

Procedure

The major part of the litigation procedure is written.

The first “rounds” of pleadings, which typically last about three months, allow for both parties to make their case and to respond to the case raised by the other.  At this stage it is not necessary to provide all of one’s evidence or legal arguments, solely the facts.

Following the first rounds, there will be a Case Management Conference in Court before a Judge.  This is a short hearing, lasting one or two hours at most, in which the barristers for both (or all) of the litigating parties discuss with the Judge the subsequent steps to be taken to prepare the case for trial.  At this hearing the trial date is normally set (within a time window of a few days).

Typically, the following issues are discussed:

1. what evidence may be required for the trial, including disclosure of relevant documents;
2. whether there are any witnesses of fact and when they are to present their evidence;
3. whether any expert evidence is necessary and whether this would be from a single commonly appointed expert or individual experts instructed by each side (it is not usual for the Court to appoint an expert);
4. whether any experimentation is to be carried out;
5. whether mediation or arbitration is to be considered; and the like.  

The Case Management Conference will set out a timetable of the steps that the litigating parties are to take in order to be ready for the trial.

Following the Case Management Conference, the parties are expected to abide by the timetable, although it is possible with good reason to change this, often without having to request the Court’s permission.  However, the overriding Rule is that the parties must work to that agreed timetable and to be ready for trial on the set date.

Expert Witnesses

It is not essential to use expert witnesses in UK litigation proceedings.  However, if there are questions as to whether or not the activity complained of actually infringes, if there are allegations as to sufficiency of disclosure in a patent specification, or of obviousness or similar points, an expert may very well be useful.

In addition, should one of the parties wish to rely upon experimentation to prove a point, those experiments will normally be carried out by an expert or in the presence of an expert and will normally have to be conducted with all of the parties to the litigation present.

Each party will have to cover the cost of its expert, although those costs are normally recoverable by the winning party.  

The Trial

The trial will be heard by a single Judge who, as we said above, is an expert in the IP field.  The trial will typically last from two to several days, depending on the complexity and breadth of the issues which need to be addressed at trial.  A barrister will present (argue) the case at the trial itself and will be supported by a patent attorney and/or solicitor.

In addition to making one’s oral arguments, the trial is the time when any witnesses, either expert witnesses or witnesses of fact, will be cross-examined by the other side.

In the vast majority of cases, a judgement is not given immediately after the trial but this is provided later by the Judge (normally several weeks after the end of the trial).

Subsequent Procedure

The judgement reached after trial does not formally end the legal procedure in the United Kingdom.  In the vast majority of cases, once the judgement has been reached, the parties will agree to settle the case by way of agreement on costs to be recovered and addressing the other remedies set out in the judgement (such as stopping the infringement, delivery up of the infringing goods, payment of damages and so on).

However, it is sometimes necessary invoke further legal procedures to have the Judge’s decision put into effect, such as having to enforce of the judgement if the losing party refuses to abide by it, having an assessment of damages in the case of a positive decision on infringement, an assessment of costs incurred and recoverable by the winning party, and so on.  These procedures are typical in many countries.

Costs

High Court litigation can be expensive.  The cases which make the headlines for the reason of their costs, that is those which have cost millions of pounds, are very untypical.  In our experience, a High Court action using a barrister, patent attorney and assisting solicitor, deciding upon both infringement and validity (i.e. a claim and counter-claim), can be conducted for £100,000 to £300,000.   Expert witnesses and experimentation will add further cost to this.  Of course, this can only be a rough guide as the costs are very much dependent upon the legal complexity of the case, the technical  complexity of the technology, unforeseen legal issues, the requirements of the litigating parties, and so on. 

The Intellectual Property Enterprise Court

The Intellectual Property Enterprise Court (IPEC) is the new name given in late 2013 to the Patents County Court.  The Court, in the form of the Patents County Court, was first established in 1990 and is intended to provide a less costly and less complex alternative to High Court litigation.  The Court operates under procedures that are intended to streamline the process and make it simpler and cheaper for parties to litigate. It is particularly aimed at less complex and less valuable cases, as well as being aimed to smaller companies and individuals.  

The IPEC is able to hear actions relating to patents as well as trade marks, designs and copyright.

Costs

As opposed to High Court actions, where the recoverable costs are in theory unlimited, the IPEC has a ceiling to the costs which can be recovered by the winning party.  This is no more than £50,000 for the main trial plus up to another £25,000 for any subsequent procedure involving an enquiry into damages.

There is also a proposal to set a limit on the recoverable damages of £500,000 per claim, but this has not yet been put into practice.

Legal Representation

Here again, the IPEC aims to reduce the number of legal representatives the litigating parties use.  It is possible, for instance, for the entire action to be handled by a patent attorney, typically a Patent Attorney Litigator.  This does not preclude the use of additional legal representation and it would not be untypical to use a barrister in addition to a patent attorney, although this would depend upon the complexity of the case and the value of the action.  Of course, if a party incurs costs over the cap, it will have to bear those costs even if it wins the action.

Procedure

The procedure is generally are the same as that of a High Court action although the initial pleadings are expected to be much more comprehensive than those of a High Court action.  They could be considered a little like written submissions made in European Patent Office opposition proceedings.

The intention, thus, is for the first pleadings to give the other side a good understanding of the case early on in the litigation and also before they meet at the Case Management Conference.  Doing so should bring out the core issues of the debate, that is the issues the parties disagree on, earlier in the case, making it easier to set a streamlined timetable as well as making it easier for the parties to consider reaching an agreement.

The IPEC is likely to question the need for expert evidence and experimentation but this will, of course, be dependent upon the facts of the particular case.  The Court may, if an expert is considered necessary, order that the parties seek to instruct a common expert.

The procedure ordered at the Case Management Conference should be simpler and therefore less costly than that which one might expect in a High Court action.

The Trial

The aim is that the trial should take place within one year of the commencement of the action.  Moreover, the Judge will typically expect the trial to last one or two days at most.  This can significantly reduce the cost of the action given that the majority of the costs of litigation are incurred during the trial itself.

Transfers Between the High Court and the IPEC

It is possible to transfer a case from the IPEC to the High Court and vice versa, depending on the circumstances of the case.  This will normally be determined during the Case Management Conference before the Judge of the Court at which the case was started.  Whether or not a case is transferred is dependent upon the complexity of the case, the value of the action and also the commercial size of the parties.  

The UKIPO

It is also possible to conduct some intellectual property litigation at the UK Intellectual Property Office, including actions for invalidity, for a declaration of non-infringement and for entitlement.

It is important to note that whilst it is possible to commence such actions at the UK Intellectual Property Office, if Court proceedings have already been instituted under the same Intellectual Property right, the Intellectual Property Office will normally decline to hear any application filed at the Office.  For instance, if an infringement action is started in one of the Courts, the Intellectual Property Office will refuse to handle an application for revocation of the same right.  That revocation action will have to be conducted as a counter-claim at the same Court dealing with the infringement action.

On the other hand, if proceedings have already commenced at the Intellectual Property Office, it is not necessarily the case that those proceedings will be transferred to subsequent Court proceedings.  For instance, an action brought at the Intellectual Property Office for revocation of a British patent would not necessarily be transferred to a Court dealing with a later filed infringement claim.

Procedure 

There is a separate procedure at the UK Intellectual Property Office, although this in general terms follows the Civil Court procedure.

It is possible, if the parties co-operate, to have our Intellectual Property Office reach a decision sometimes faster than the Court, sometimes in less than one year.

The procedure normally ends with a hearing before a senior Examiner with many years of experience.  The hearing is not, however, before a Judge.

Costs

The Intellectual Property Office also has the right to award damages against the losing party, but the award is on the whole nominal and will only cover a very small percentage of the costs actually incurred.

The cost of litigation before the Intellectual Property Office is likely to be significantly less than at Court, although this does of course depend upon the nature of the case and evidence relied upon.  As a general guide, a party could expect cots in the region of £15,000 to £30,000.

Patent Office Opinions

Some years ago the UK Intellectual Property Office set up a procedure whereby potential litigators can obtain an informal opinion from the Intellectual Property Office on matters such as potential infringement and potential invalidity of a patent.

The procedure is informal and the opinion non-binding but under some circumstances it can provide a very powerful positioning tool against another party.

The assessment of evidence is on the whole less stringent than in a litigation action, which can have significant advantages as well as disadvantages, depending upon how the evidence is handled in practice.

A patent office procedure, in which the other side takes part, is likely to cost in the region of £5,000 to £10,000.