Moving to London

When I opened the first patent chambers outside London in Lancaster Buildings on 1 May 1997 my mission was to provide high quality but affordable advice and representation on intellectual property, information and communications technology, media and entertainment and competition law to businesses and individuals in Northern England and North Wales.

That remains my mission but times have changed.  The internet has made it easier to market and deliver legal services anywhere in the world with the result that my work now comes from all parts of the UK and overseas.  Amendments to CPR Part 63 and the Part 63 Practice Direction  enable the Patents County Court to provide a cost-effective forum for the resolution of intellectual property disputes for litigants throughout England and Wales.  It has been obvious to me for over two years that if I was to continue to provide the best possible service for my clients I had to be in London.

On 11 Feb 2013 I was invited to join 4-5 Gray’s Inn Square and I seized that opportunity with both hands.   Although I had first come across the set in  Twentieth Century Fox Film Corp and Others v British Telecommunications Plc  [2011] RPC 28, [2011] EWHC 1981 (Ch), [2012] 1 All ER 806, [2012] Bus LR 1471 when Richard Spearman QC  of those chambers made one of the first applications for an injunction under s.97A of the Copyright, Designs and Patents Act 1988 it is probably fair to say that 4-5 Gray’s Inn Square was not known for its expertise in IP and ICT law.

That has now changed. Not only have I joined the set but so too have:

• Thomas Dillon, a former assistant general counsel to the EMEA office of the Motion Picture Association and thus an expert in copyright, rights in performances and information and communications and technology law;
  
• Joseph Dalby an expert in computer supply disputes, e-commerce and EU law;
• David Hughes, a member of the Welsh Assembly’s intellectual property panel advising on data protection and privacy as well as IP; and
• Tahir Ashraf, a former solicitor advocate with experience of trade mark infringement and passing off.

Joseph has strong connections with Ireland as David has with Wales and I have with the North.  Thomas is a member of the California Bar, Joseph is a member of the Irish bar and David has practised in Gibraltar.   Thomas and Joseph has expertise in EU law.  Several of us are arbitrators and mediators and sit on domain name dispute resolution panels.

We intend to build on, and extend those connections.    We are all clerked by Stephen Broom who can be reached on +44 (0)20 7404 5252 Email sbroom@4-5.co.uk.  I can still be reached in Leeds on +44 (0)113 320 3232, Manchester on +44 (0)161 850 0080 or nationally on 0800 862 0055   You can still see me and now any of my colleagues in Bradford, Huddersfield, Leeds or Manchester if you want a conference in the North.   I shall continue my work with entrepreneurs and inventors in Leeds, Liverpool, Manchester and Sheffield but I shall try to extend some of the services that I have developed in the North to the rest of the country.

How to bring a Small Claim in the Patents County Court

Until recently most intellectual property claims were brought at great expense and ended inconclusively in the Chancery Division. There was the Patents County Court in London but that was almost as expensive as the High Court and for a long time its jurisdiction was confined to patents and designs. There were also the county courts in Manchester, Leeds, Liverpool, Preston, Newcastle, Bristol, Birmingham, Cardiff, Mold and Caernarfon but cases in those courts had to take their place in very long queues to come on eventually before a judge or recorder who was unlikely to have done much intellectual property work either on the bench or in practice. As a result, intellectual property rights have been widely ignored because infringers calculate that the owners of those rights cannot afford to sue or that the cost of enforcement is greater than the value of the likely remedy.

Now those calculations will have to change because there is now an affordable and virtually risk free forum for the enforcement of most intellectual property rights. Claims for injunctions for infringement of copyrights, design rights and trade marks, passing off, breach of confidence and indeed all intellectual property claims except those involving patents, registered designs, registered Community designs, semiconductor topographies and plant breeders’ rights can now be brought in the small claims track of the Patents County Court provided that the claim for damages does not exceed £5,000. Since the relief that most intellectual property owners want when their rights are infringed is not compensation for past wrongdoing but a stop to future wrongdoing that is good enough for most intellectual property owners.

Sceptical? Well test my proposition this way. Most disputes are settled through correspondence. Even in cases where proceedings are issued, most are settled at an early stage – either through mediation or direct negotiation or because the claimant gets or is refused an interim injunction. Very few of those settlements require the defendant to pay more than £5,000 in damages and even where the claim goes to trial it is rare for a successful claimant to insist on an account of profits or inquiry as to damages.

So how do you use the new court? Well the first thing you have to decide is how to use your lawyer because most of the fees that he or she will charge will be irrecoverable. The most that you can expect from the other side is £260 if you seek an injunction, the fee you paid to the court to issue the claim plus compensation for loss of earnings and travelling expenses if you have to attend a hearing. The small claims track procedure is designed to enable you to proceed without a lawyer or patent or trade mark attorney and anyone can present your case on your behalf at a hearing so long as you are also present.

However, that does not mean that you can do without a lawyer altogether. Intellectual property is a very complex area of the law and contains many pitfalls. For instance, if you threaten to sue someone for infringing a patent, registered or registered Community design, unregistered design right or trade mark and your threat turns out to be groundless you (the injured party) can be on the receiving end of a claim for an injunction and damages. The rules governing proceedings in the small claims track require you to write to the other side advising them of your right and how you believe they have infringed it before you issue proceedings but unless you get the wording right you risk a threats action or other unwelcome consequences. I have set out some guidance as to what you need to say in your letter before claim in my note “Why sending a US style ‘Cease and Desist Letter’ or old style ‘Letter before Action’ may not be a good idea” 13 Jan 2012 and I have written a model letter before claim for a design right dispute (JD Supra 3 Oct 2012). If you are not sure what to do in your particular dispute I shall be happy to draft a letter before claim for you or your solicitor or patent or trade mark attorney for a fixed fee. Also, a letter before claim is much more likely to be taken seriously if it appears on the stationery of a solicitor or patent or trade mark attorney than it will if it is written on your own notepaper unless you are a very large company. If you do not have a solicitor or patent attorney I have made arrangements with several firms which will send a letter before claim that I have drafted for a fixed fee.

If the case does not settle at this stage you will have to issue a claim form out of the public counter of the Rolls Building at the following address: 7 Rolls Building, Fetter Lane, London, EC4A 1NL.   A fee is payable to the Courts and Tribunals Service at this point which will vary from £35 to £120 depending on the amount of damages you claim. The claim form must be accompanied by particulars of claim which set out your case in detail and a response pack. If you forget to send either of those things the case will not proceed or, if by some mischance it does proceed, any judgment that you obtain may be overturned. Again this is something for which you may need a lawyer since the particulars of claim must be in a prescribed form and contain certain information. Once again, I can draft the particulars of claim for you or your solicitor or patent or trade mark attorney for a fixed fee.

The other side has a fixed time to lodge a defence and any counterclaim the duration of which will depend on whether you sent a letter before claim in the prescribed form and mentioned that you had sent such a letter in your particulars. If the defendant responds within that time the court will give directions which may include fixing a date for a final or preliminary hearing. If it does not respond, you can apply to the district judge for an injunction, damages and any other relief to which you may be entitled and that will probably require a hearing.

All hearings will take place in the Thomas Moore Building in the Royal Courts of Justice in the Strand. The judges who will decide cases in the small claims track will be District Judges Janet Lambert, Melissa Clarke and Charlotte Hart and Deputy District Judges Nicola Solomon and Richard Vary. All of those judges have qualified as solicitors and most have been partners of big London law firms.

I have uploaded a presentation on IP litigation in the small track to Slideshare and written an article on the topic with a bibliography in my IP/IT Update blog. Should you require further information, you may call me on 0800 862 0055 or contact me through Facebook, Linkedin, twitter or Xing, or through my contact page.

Litigation Funding for IP Claims

Until 2000 a large number of freelance artists, authors, designers, inventors and self-employed individuals relied on legal aid to protect their artwork, inventions and other intellectual assets but that source of funding was cut off by paragraph 1 (g) of Schedule 2 to the Access to Justice Act 1999. In some areas of litigation such as personal injuries claimants have often been able to find solicitors and barristers who are prepared to act under a conditional fee agreement (that is to say, no win no fee) but the complexities, costs, duration and uncertainties of intellectual property disputes make it uneconomic for most specialist lawyers to accept instructions for intellectual property disputes on that basis (see “No Win No Fee” 11 July 2011). As I said in that article the best option is usually to take out before-the-event intellectual property insurance but the premiums are quite high and many patent attorneys are sceptical as to its value. There remains, of course, after-the-event insurance but that is likely to be less available as Part 2 of the Legal Aid, Sentencing and Punishment of Offenders Act 2012 takes effect.

Litigation Funding

There is yet another option, namely third party litigation funding. There are businesses that are prepared to invest considerable sums of money in claims for substantial damages. An example is Harbour Litigation Funding Ltd. which claims to be the UK’s largest litigation funder with £180 million of capital and to have invested more money, in more cases, than anyone else. On its “Funding Explained” page, the company states that “litigation funding involves paying the legal bills of a claimant in exchange for a share of the proceeds on success. If there is no success in the litigation, there is no repayment. Litigation funding is an investment in the litigation alongside the claimant. It is not a loan.” Further down that page, the company adds:

“Litigation funding gives claimants the opportunity to seek recoveries which they might not otherwise be able to pursue. Increasingly it provides a solution to corporate claimants to hedge their costs in litigation. Having Harbour alongside also sends a powerful message to the defendant that they cannot adopt a ‘scorched earth’ approach of trying to run up costs or demanding security in the hope that the claimant will not be able to afford to continue with their claim” (my italics).

On its “Case Studies Page” Harbour gives examples of some of the 100 plus cases it has funded since 2002. They include unfair prejudice claims, breach of trust cases and an action for breach of confidence by an SME against an investment bank. As there were no intellectual property disputes on the list save perhaps for the breach of confidence case I asked the company’s CEO, Brett Carron whether Harbour would entertain such claims and he replied that it would. He added, however, that the company has pretty strict investment criteria and that it does not commit to every case that is presented to it. Mr. Carron also said that high value computer supply disputes would be possible candidates for funding. Having been called to the Bar at a time when champerty and maintenance were still torts I had been nervous of the idea of investing in litigation but the involvement of Sir Gavin Lightman, Stephen Davies QC and Michael Napier (all of whom I have dealt with at one time or another) is good enough for me.

ALF

Harbour is one of the members of ALF (The Association of Litigation Funders of England and Wales). Other members include Calunius Capital, Therium, Vannin Capital and Woodsford Litigation Funding. ALF claims to be

“dedicated to promoting best practice in the Litigation Funding industry and campaigning to improve the uses and applications of Litigation Funding as an additional resource for Access to Justice and rational management of financial risk in making claims. We seek to ensure continued compliance with the Code of Conduct by our members and to promote awareness of Litigation Funding in the UK.”

A copy of the November 2011 that Code can be downloaded from ALF’s website.

Litigation Futures

A useful resource for finding funding is the “Find a Funder” facility on the Litigation Futures website This is a search facility for after-the-event insurers and brokers as well as third party funders. I searched third party funders for intellectual property and came up with a number of names that included Harbour, Therium, Vannin and Woodsford. I came up with a similar number of names when I searched for after-the-event insurers Incidentally, Litigation Futures appears to be associated with the Legal Futures site which is the first site that I consult for news on the legal services industry. I thoroughly recommend its blog and Friday newsletter.

Further Information

 Should anyone wish to discuss this article or  litigation funding generally, he or she call me on 0800 862 0055 or use my contact form.

Drafting A Privacy Statement

In “Basic Law for Web Designers No 2: Website Terms and Conditions” JD Supra 27 Aug 2011, I discussed the terms and conditions that should appear on websites. I said that every website should have at least two sets of terms: “website access terms” and a “privacy statement.” I added that if a website owner intends to market his or her goods or services over the internet, his or her website should also set out his or her terms of business. I then discussed the contents of “website access terms”, “privacy statements” and terms and conditions of business and how they should be developed.

When I wrote that article the OECD website provided a useful tool for developing privacy statements known as the “Privacy Statement Generator”. Sadly, after more than 10 years if service, that tool has been removed. The space where the Privacy Statement Generator used to be found points to the paper “Making Privacy Notices Simple: An OECD Report and Recommendations”, OECD Digital Economy Papers, No. 120, OECD Publishing, the OECD. The foreword to that paper notes that:

“Privacy notices are an excellent tool to disclose an organisation’s privacy practices and policies. Research suggests, however, that many notices are too lengthy, confusing, and contain complex legal language. This report recommends that privacy notices be short, simple and usable to make it easier for individuals to assimilate the information they contain and to compare the privacy practices of the organisations processing their personal data.”

Part of the research to which the foreword refers was commissioned by the UK Information Commissioner. The researchers found that approximately 60% of people said that they cared about what happens to their personal information, yet most people ignore privacy statements. Even when they do pay attention to them, readers are not able to assimilate much of the information provided. The problem was that notices were too long and repetitive, they contained financial and legal jargon, they identified the main points inadequately and, above all, failed to engage the reader.

To address those points, the OECD has made the following recommendations:

“1,    Identify data flows: Identify your organisation’s practices regarding the collection, use, sharing, protection, and destruction of personal data.

2.     Conduct a legal review: Determine which laws, regulations, industry codes, contracts, corporate promises, or other legal requirements cover the collection and use of personal data by your organisation.

3.    Prepare a comprehensive privacy policy statement: Prepare a comprehensive statement describing your organisation’s policies and practices with respect to the handling of personal data. Conduct internal reviews to ensure the accuracy of the statement. The OECD Privacy Policy Statement Generator can be of particular assistance for this phase.

4.     Develop a simplified notice: Develop a shorter, clearer notice that includes key information that will enable consumers to understand how their personal data is used and any rights they have with respect to the organisation’s use of that information.

5.    Test the usability of the notice: Conduct testing to ensure that readers of the simplified notice find it comprehensible and user-friendly.

6.    Disclose the simplified notice: Prominently display the simplified notice on the organisation’s website or otherwise distribute it so that it can be readily and easily accessed and read by an individual whose personal data may be used by the organisation. Where needed, ensure easy accessibility to the comprehensive statement for those who want complete details, or where its availability is indicated by the legal review.”

Developing a privacy policy should involve everyone connected with a business including outside professional advisors and not just lawyers and techies. If done properly the process can identify opportunities for cost savings and improving competitiveness as well as enabling compliance with statutory obligations. The benefits should in many cases exceed the cost of carrying out the process.

Identification of data flows should take place as early as possible, preferably at the business planning stage and no later than the time of notification. The data flows to be identified are likely to be the same as the “registrable particulars” that need to be notified to the Information Commissioner under s.16 (1) of the Data Protection Act 1998. The legal review should be as broad as possible and must take account of the laws of every jurisdiction in which the business intends to operate as well as those of England or other part of the UK. Though data protection law regulates the processing of personal data there are many other laws that require the keeping of such data for health and safety, tax and other reasons. The privacy policy will set out the ways in which these often conflicting requirements can be reconciled. It is likely to be designed for the use of the managers, employees and others connected closely with the business rather than those who come into occasional contact with it. The notice will be a distillation of the policy and contain such information as the data to be collected, how such data are to be held and how to make a subject access request. Ideally, it should not be more than a few hundred words and it should be written in everyday language rather than legalese or tech speak. The process of developing and reviewing a privacy policy and the resulting public statement should be a continuous one, partly to comply with the Data Protection Act 1998 since notification must be renewed every year but also to ensure that the information processing resources remain efficient.

Having contributed the first chapters on data protection to Butterworths Encyclopaedia of Forms and Precedents and Atkins Court Forms nearly 30 years ago I have been consulted on a lot of privacy statements. Should anyone wish to discuss this article or any topic concerned with data protection, he or she call me on 0800 862 0055 or use my contact form.

“We’re in the Middle of an Innovation Strike”

Not my words but NESTA’s though I have used very similar words many times over the last few years.

One of the most depressing reports that I have read for a while is “UK Innovation Index: Productivity and Growth in UK Industries” by Peter Goodridge, Jonathan Haskel and Gavin Wallis (Nesta Working Paper No. 12/09). It shows that there has been a £24bn collapse in innovation investment over the last 3 years. This trend has accelerated with the economic downturn but it began in the good times. There has been a crisis of confidence in the course of this decade with businesses prioritizing cash and concrete over investment in innovation. NESTA describes it aptly as a “lost decade of innovation”.

“Now why should that matter?” some may ask. Well the answer is that innovation accounted for 63% of economic growth between 2000 and 2008. If the British economy is to recover – and there have been some slumps in history from which a country has never recovered – we have to reverse this trend. Otherwise it will be we who will join the third world just as countries like China, India, Brazil and even parts of Sub-Saharan Africa emerge from poverty. The danger is articulated very clearly by NESTA’s Chief Executive Geoff Mulgan:

“Other countries are making investment in innovation a top priority and the UK cannot afford not to do the same. Our data shows that British business prioritised cash and concrete over investment in future technologies and services, a potentially disastrous decision that now needs to be put right.”

The tragedy is that our country does not need to be in this position. The Global Innovation Index 2012 published by INSEAD and the WIPO lists the UK as the 5^th most favourable country for innovation, behind Switzerland, Sweden, Singapore and Finland (page xviii). We are ahead of the USA (No. 10), Germany (No. 15), France (No 24) and Japan (No. 25). According to our country profile on page 315 we score well on market sophistication, investment, regulatory sophistication, online creativity and ICT access. It is human capital and knowledge absorption where we do less well.

NESTA has started a campaign for a “Plan I” which Mr. Mulgan calls “a plan for innovation-led growth – as an alternative to the increasingly sterile debate between Plan A and Plan B.” Restoring investment in innovation should be are number one concern. Everything else – the Olympics, Diamond Jubilee and even the shenanigans of bankers and newspaper proprietors are mere sideshows in comparison.

Intellectual Property for Start-ups and other Small Businesses

Intellectual property (“IP”) is the collective term for the bundle of rights that protect investment in branding, design, technology, art and literature. Examples of such rights (“IPR”) include patents for inventions, registered trade marks for brands, registered designs for product design and copyrights for books, broadcasts, computer programs, databases, drawings, films, scores and sound recordings. The object of such protection – the inventions, brands, designs and so forth – are sometimes called “intellectual assets”. Those rights are powerful tools that enable businesses to retain, and in some circumstances extend, the competitive advantage established by such assets. The Toolkit Here are some (but by no means all) of those tools.

Intellectual Asset	IPR	Scope	Advantages	Disadvantages
New product or process incorporating new technology	Patent	Monopoly of the manufacture, importation, disposal or use of the invention	Extensive protection; IPO examiners’ opinions on validity and infringement;	Granted only after rigorous and often lengthy examination; Expensive to obtain; Renewal fees; Invention must be disclosed to the public; Can be revoked after grant; Do not cover software, business method or other internet related inventions; Granted only for territories of individual states
	Trade Secret (Law of confidence)	Right to prevent unauthorized use or disclosure of information communicated in confidence	Free to obtain; Can subsist indefinitely if the product cannot be reverse engineered; Covers more or less any technical information including computer source code;	Lost as soon as information enters the public domain; Complainant must prove that the information was secret and that it was disclosed in confidence which is not always easy
	Unregistered design right	Right to prevent others from making articles to the design of an article or part of an article	Free to obtain; Covers most design documents; Covers prototypes; Covers mechanical and electrical components that are normally hidden from view;	Short term with possibility of licence of right in the last 5 years; No other industrial country has a similar right; Wide exclusions (method of construction, surface decoration, must fit, must match and commonplace); Qualification requirement which excludes most designs from most industrial countries outside the EU; Need to prove copying.
	Literary copyright	Right to prevent copying of software, databases and other original literary works	Free to obtain; Very long term; Available to citizens of most countries; Automatically available to UK citizens and residents in most countries; Covers most internet related inventions;	Need to prove copying; No longer covers most design documents;
New product or process incorporating a new design	Registered design for the UK only	Exclusive right to use the design and any design that does not produce a different impression on an informed user	Easy to obtain; Inexpensive to obtain; No substantive examination; Five renewable terms of 5 years each; No need to prove copying	Covers only appearance and not function; Does not normally extend to designs hidden from view; Can be challenged after grant on several grounds including lack of novelty or individual character.
	Registered Community design for the whole EU
	Unregistered Community design	Right to prevent copying of a design that is new and has individual character	Free to obtain; Covers the whole EU	As above; Very short term; Need to prove copying
	Unregistered design right	Right to prevent others from making articles to the design of an article or part of an article	Free to obtain; Covers most design documents; Covers prototypes; Covers design features that are normally hidden from view;	Short term with possibility of licence of right in the last 5 years; No other industrial country has a similar right; Wide exclusions (method of construction, surface decoration, must fit, must match and commonplace); Qualification requirement which excludes most designs from most industrial countries outside the EU; Need to prove copying.
	Artistic copyright	Right to prevent direct or indirect copying of design drawings and other artistic works	Free to obtain; Very long term; Available to citizens of most countries; Automatically available to UK citizens and residents in most countries; Covers surface decoration, fabrics and floor coverings	Need to prove copying;
Brands	Registered trade mark for the UK only	Exclusive right to use a sign in relation to specified goods or services	Considerably less expensive to obtain than a patent though more expensive than a design registration; Considerably easier and quicker to obtain than a patent; Counterfeiting an offence as well as a cause of action	Requires examination and applications can be opposed; Can be challenged after grant; Must be used within 5 years of grant; Easier and cheaper to enforce than an action for passing off
	Community trade mark for the whole EU
	Passing off	Right to prevent others from misrepresenting the source of goods or services by the use of the same or similar trade name, mark or get-up	Free to obtain; Covers some signs that cannot be registered as trade marks	Expensive to enforce (claimants must prove goodwill or reputation by reference to the sign and actual or likely confusion)
Books, films, games, musical scores, plays, sound recordings, TV programmes, websites and other creative works	Copyright	Right to prevent copying, publication, renting, lending, communication or adaptation	Free to obtain; Very long term; Available to citizens of most countries; Automatically available to UK citizens and residents in most countries; Collecting societies; Piracy an offence as well as a cause of action	Need to prove copying; Increasingly difficult to police on the internet
Performances of actors, musicians, singers and other performers	Rights in performances	Right to object to broadcasting, filming or taping	Free to obtain; Very long term; Available to citizens of most countries; Automatically available to UK citizens and residents in many countries; Collecting societies; Bootlegging an offence as well as a cause of action	Increasingly difficult to police on the internet

The Cost of the Tools All of those tools – even those that are free to obtain – come at a cost. Essentially those costs fall into three categories:

• obtaining and in some cases maintaining the IPR;
• policing the IPR; and
• enforcing the IPR.

Those costs vary considerably from country to country and from IPR to IPR.

• Obtaining and Maintaining

IPR that have to be registered with the British or other intellectual property office include patents, trade marks and registered designs. The costs of obtaining an IPR that has to be registered include

• The official fees of the office or registry
• Patent or trade mark agents’ or other professional fees for advice, drawing up the application, correspondence with examiners and third parties and, occasionally, a hearing before an IPO tribunal;
• Translations; and
• Renewal fees which can increase over the term of a patent in some countries.

In 2004 the European Patent Office commissioned Roland Berger Market Research to conduct a representative survey on the cost of obtaining a and maintaining for 10 years a typical European patent in France, Germany, Italy, Spain, Switzerland and the UK. The researchers found that it was around €32,000 (see “The cost of a sample European patent – new estimates” Aug 2004). The cost of registering and maintaining a trade mark or registered design in the same countries would be less than €32,000. The cost of applying for and maintaining patents for an invention in the leading industrial countries inside and outside Europe would be considerably more.

• Policing

Applications to register IPR are published in intellectual property offices’ journals and on their websites. A number of patent and trade mark attorneys and other service providers will monitor those publications and alert their clients to applications that could affect their IPR or businesses for a fee. These services are known as “watch services.”

Infringements are harder to detect. There are a number of software tools that scour the internet for infringing copies of copyright works. Sometimes infringements come to the attention of sales staff or a company’s customers or distributors. Occasionally it is necessary to employ specialist private investigators to observe a market and trace sources of infringing goods.

• Enforcement

Essentially an IPR is a right to bring a law suit. Some IPR can sometimes be enforced without litigation. Some infringements of copyright, trade marks and rights in performances are crimes as well as causes of action which can be prosecuted in England and Wales in the Crown and magistrates’ courts by local trading standards officers. The registration of a domain name that is the same or similar to a trade mark can sometimes be cancelled or transferred under an alternative dispute resolution procedure such as ICANN’s Uniform Domain Name Dispute Resolution Policy. Sometimes the risks and costs of litigation can be delegated to a collecting society which licenses the use of its members’ works, collects and distributes their licence fees and, where necessary, conducts civil litigation on their behalf. Otherwise, the enforcement of an IPR is the responsibility of the owner of the right. Ultimately that requires proceedings in the civil courts.

New Civil Procedure Rules came into force in October 2010 which limit the costs that can be recovered in the Patents County Court to £50,000 for the determination of liability and £25.000 for an inquiry as to damages or an account of profits (see Jane Lambert “New Patents County Court Rules” 31 Oct 2010). HM Government has also announced plans for a small IP claims track for the Patents County Court (see Jane Lambert “Small IP Claims” 8 May 2012). Claims over £500,000 have to be brought in the High Court where costs are unlimited. In 2003 the Intellectual Property Advisory Committee published “The Enforcement of Patent Rights” which found that the average cost of a patent infringement action in the Patents Court was £1 million compared to €30,000 to €50,000 in France, €25,000 to €50,000 in Germany and €10,000 to €40,000 in the Netherlands.

Selecting the Tools

Very few start-ups and small businesses can afford to acquire or deploy all those tools and most do not need to. I often say that in my 30 years at the patent bar I have seen far more businesses fail because they had too much IP than those that failed because they had too little. Often the reason for failure is that they spent all their money on building up massive portfolios of patents or other IPR which they could not afford to enforce or, in some cases, even renew. When selecting an IPR, make sure that the IPR covers your business needs and that you have the means to enforce that IPR.

• Identifying Business Needs

The best time to think about IP protection is when you draw up your business plan.

1. Consider your sources of income over the period of the business plan (that is to say, sales, fees, royalties and so on).
2. Think about possible threats to those income streams during that period. Competition from other suppliers will be one threat but there will be other factors such as changing tastes and the general level of demand in a depressed economy.
3. Identify possible counter-measures to those threats. Most of those will be commercial like reducing your prices or developing new products or markets. Only a few will require legal protection such as a patent or other IPR.
4. Where an intellectual asset does require legal protection, there may be several ways to provide it. For instance a new product or process incorporating new technology may be protected by a patent, the law of confidence, unregistered design right or copyright. Some of these IPR are free while others have to be registered. If you can rely on trade secrets or unregistered design right why apply for a patent.
5. Make sure you have the resources to enforce the right. In most cases, that means taking out intellectual property insurance.

• IP Insurance

I have written extensively about IP insurance over the years. My last post on the subject listed a number of brokers who offer IP insurance. Others have no doubt appeared by now (see Jane Lambert “IP Insurance Five Years on” 23 Oct 2010 NIPC Inventors Club).

If you want to discuss this article further call me on 0800 862 0055 or complete my contact form.

Catapult: Is that really the Sort of Initiative that we need to stimulate Growth?

On 1 June 2012 I attended in Sheffield a workshop on Shaping the Connected Digital Economy Catapult (“the CDEC”). It was the second workshop on how small and medium enterprises (“SME”) can participate in, and shape, the CDEC programme.

On the home page of the Technology Strategy Board’s website, Catapults are described as  “a network of work leading technology and innovation centres.” Click the link to the “overview” and one finds a more modest claim:

“We are making fast progress in creating a network of world-leading Catapults centres to transform the UK’s capability for innovation in seven specific areas and help drive future economic growth.”

In fact, this “network” seems to have only one such centre, the “High Value Manufacturing Catapult” which opened in October 2011.  That Catapult’s website does not state where that centre is located but it has a number of partners in different parts of the country including Sheffield University’s Advanced Manufacturing Research Centre at Catcliffe and Strathclyde’s Advanced Forming Research Centre in Glasgow.  A lady in Glasgow called Margo Hutchison answers enquiries.   Eventually there will be 7 Catapults, the others being Satellite Applications, Future Cities, Connected Digital Economy, Offshore Renewable Energy, Cell Therapy and Transport Systems.

Great things are expected of these centres.    The Intellectual Property Office’s publication “From Ideas to Growth” April 2012 gushed:

Catapult centres can create a critical mass for business and research innovation by focusing on a specific technology where there is a potentially large global market and a significant UK capability. These centres will be an important part of the UK’s innovation system, making a major long-term contribution to UK economic growth. They will allow businesses to access equipment and expertise that would otherwise be out of reach, as well as conducting their own in-house R&D. Each Catapult will target a specific sector and will help transform the UK’s capability for innovation within that technology area.”

According to the foreword to “Catapult update Shaping the network of centres” (March 2012) which was in our delegate’s pack,

“the network of Catapults is a strategic long-term investment in the UK’s innovation capability, which will drive economic activity for years to come and significantly increase wealth creation by building a bridge between our world-leading research base and business.”

“Just like the National Computing Centre forged by the Ministry of Technology in the furnace of Harold Wilson’s white hot technological revolution way back in 1966″, I mused this Jubilee weekend.

My sense of déjà vu  was aroused when I read that the idea of Catapults  was based on a report by Hermann Hauser commissioned by Lord Mandelson and that it was endorsed by another from Sir James Dyson, commissioned by David Cameron.   It was increased still further by Nick Appleyard’s presentation which included a slide of an inverted pyramid with “economy” at the top and “person” at the bottom with “industry” and “company” in between.   Not once did I hear the word “market” in his presentation and I made that point in the first question of the Q & A session.   “Well of course it has to be market driven” replied Dr. Appleyard.   And so it is in a sense but only in the way that the coal and steel produced by Stakhanov and his mates were put on sale in the Soviet Union.

The problem with the Catapults is that this is not how innovation works.   Enterprise and innovation cannot be established by fiat.   They occur naturally when a number of factors coincide such as a market, source of capital and concentration of bright individuals.   Those factors vary from time to time and from industry to industry.   Thus the factors that sparked off the industrial revolution in 18th century England were different from those that gave rise to Silicon Valley in late 20th century California;   though in neither case was there anything like a Catapult.

Governments are desperate for growth.    Their electoral vulnerability prompts them into initiatives where they can appear to be doing something.   Doubtless that is why New Labour wheeled out the founder of Acorn Computers and the inventor of the dust cyclone for advice on how to achieve growth.   No doubt the same concern explains why the Coalition has bought their recommendations.

I think there are better uses for public money than Catapults.   The Department for Culture, Media and Sport’s investment in broadband is a good use of public money.   It is much more likely to stimulate innovation and growth in the digital connected economy by generating demand for new equipment and content for the services that can be delivered by superfast broadband.   If it has money to spare, the government could develop more services in sectors such as education and healthcare that can be delivered electronically.   In the longer term investment in schools will pay dividends.    Especially if more kids can be taught to program together with the maths to understand programming and North Asian languages such as Japanese, Korean and Mandarin in which much of the world’s new technical literature is now written.

Should anyone want to discuss this article, please call me on 0800 862 055 (+44 161 850 0080 if calling from abroad) or fill in my contact form.

Patents County Court FAQ

These are the questions that I am often asked by solicitors – particularly those who do not specialize in intellectual property – about proceedings in the Patents County Court

What is the Patents County Court?

Officially the Patents County Court is part of the Central London County Court. It was designated as a Patents County Court by art 2 of the Patents County Court (Designation and Jurisdiction) Order 1994. That Order was made pursuant to s.287 (1) of the Copyright, Designs and Patents Act 1988. S.287 (1) enables the Lord Chancellor to designate any county court as a patents county court and to confer on it jurisdiction to hear and determine proceedings relating to patents and designs. At present, the Central London County Court is the only county court to be so designated. Although it is part of the Central London County Court hearings take place not in Park Crescent but at the Rolls Building in Fetter Lane.

What is the Jurisdiction of the Patents County Court?

As the Central London County Court is also a chancery county court, the Patents County Court can hear and determine almost any type of intellectual property claim and its geographical jurisdiction is nationwide. However, there are there important restrictions to be born in mind:

(1)    Damages or the moneys sought on an account of profits may not exceed £500,000;

(2)    The trial on liability and any subsequent account or inquiry must be completed within 2 days; and

(3)    The recoverable costs are limited to £50,000 for the trial and £25,000 for the inquiry or account of profits.

Because the Patents County Court now hears cases that go far beyond patents and designs, the Government has indicated that it intends to change the name of the court to the Intellectual Property County Court as soon as a suitable legislative vehicle becomes available (see page 20 of the Government’s Response to .the Call for Evidence on Introducing a Small Claims Track into the Patents County Court.

What are the Alternatives to the Patents County Court?

A claim other than one relating to patents, registered or registered Community designs, semiconductor topography rights or plant varieties may be brought in the Chancery Division of the High Court of Justice in London, the Birmingham. Bristol, Caernarfon, Cardiff, Leeds, Liverpool, Manchester, Mold, Newcastle or Preston District Registries or the county courts attached to those District Registries. The only other court in which a claim relating to patents, registered or registered Community designs, semiconductor topography rights or plant varieties can be brought is the Patents Court.

What are the Advantages of the Patents County Court?

The principal advantages are speed, cost-effectiveness and the specialist judge. It is therefore ideal for most intellectual property cases. The only claims that cannot be brought before that court are those for more than £500,000. Claims that need more than 2 days for trial, those that are likely to cost significantly more than £50,000 to prepare and those that originate outside London and are very small are not suitable for the Patents County Court.

Are there any Special Rules for the Patents County Court?

Yes. These are set out in Section V of Part 63 of the Civil Procedure Rules and Section V of the Part 63 Practice Direction. You should also consult the Patents County Court Guide.

Tell me about these Special Rules

They enable the court to manage cases tightly so as to minimize costs and delay.

(1) Statements of Case Wherever possible the court will determine cases solely on the parties’ statements of case and oral submissions (see paragraph 31.1 of PD Part 63). For that reason, CPR 63.20 requires a statement of case to set out concisely all the facts and arguments upon which the party serving it relies. CPR 63.21 requires the statement of truth of a statement of case to be verified by someone with knowledge of the facts. If no one person has knowledge of all the facts, the statement of truth must be signed by all those who between them have such knowledge. Save in exceptional circumstances, no other material will be admitted without the permission of the court (see CPR 63.23 (2)).

(2) Evidence The opportunity for the parties to seek permission to adduce such additional material is the first case management conference. The claimant has a duty under paragraph 5.3 of PD Part 63 to apply for a case management conference within 14 days of the date when all defendants who intend to file and serve a defence have done so. If the claimant fails to apply for a case management conference within that time any other party may do so (see paragraph 2.5 of the Patents County Court Guide). At the case management conference, which is always taken by the trial and not a district judge, the court will identify the issues and decide how they are to be resolved (see CPR 63.23 (1)). If the parties agree, the judge may determine the claim on paper (CPR 63.23 (3)). Otherwise, the judge will decide in relation to each issue whether to order specific disclosure, witness statements, experts’ reports, cross-examination or other evidence and written submissions or skeleton arguments (paragraphs 29.1 and 29.2 of PD Part 63). In deciding whether to order additional material the court has to be satisfied that the benefit of the further material in terms of its value in resolving those issues is likely to justify the cost of producing and dealing with it.

(3) Trial Once the issues of the case have been identified and directions given for their resolution the other important direction to be given at the case management conference is the date for trial. The dates for any disclosure and inspection of documents, exchange of witness statements, preparation of bundles and exchange of skeleton arguments will be fixed by reference to the trial date.

(4) Applications These are resolved on paper unless the court considers it necessary to hold a hearing (see CPR 63.25 (3)). If a hearing is necessary the court will try to conduct it by telephone or video conference (paragraph 30.1 of PD Part 63). Respondents to applications must file their evidence in reply within 5 days of an application notice (CPR 63.25 (2)). Applications to stay or transfer a case to the High Court must be made before or at the case management conference (see CPR 63.25 (4)). As claims proceed quickly in the Patents County Court there is rarely any need for interim injunctive relief. Unless a party has behaved unreasonably, the costs of an application will be reserved to the conclusion of the trial when they will be subject to summary assessment.

What about Small Claims?

In its Response to .the Call for Evidence on Introducing a Small Claims Track into the Patents County Court the Government outlined its plans for introducing a small claims track into the Patents County Court. In Sullivan v Bristol Film Studios Ltd [2012] EWCA Civ 570 (3 May 2012), Lord Justice Lewison said that it was already possible to bring a small IP claim in the Patents County Court or indeed the Birmingham, Bristol, Caernarfon, Cardiff, Leeds, Liverpool, Manchester, Mold, Newcastle or Preston County Courts. Such actions are allocated initially to the multi-track but can be re-allocated to the small claims track under CPR 26.10. In Sullivan Lord Justice Lewison thought that Bristol County Court was the best venue for that claim (see my article “Small IP Claims” on our chambers website of 8 May 2012 and my case note on Sullivan of 7 May 2012 in our IP/IT Update blog).

Where can I get Further Information?

You could read my article “New Patents County Court Rules” in my IP/IT Update blog of 31 Oct 2010. You could also call me on 0800 862 0055 (+44 161 850 0080 if calling from abroad) or fill in my contact form.

Small IP Claims

In my case note “Enforcing Small IP Claims: Sullivan v Bristol Film Studios“ 7 May 2012 I discussed an appeal where a claim for infringement of copyright, moral rights and rights in performances was thrown out not because it lacked merit but because the cost of pursuing it would have been disproportionate to any damages that could possibly have been awarded. In that particular case the claimant had conceded that his case should not proceed to trial if it was worth only £50 or thereabouts. However, Lord Justice Lewison made clear that

“The mere fact that a claim is small should not automatically result in the court refusing to hear it at all. If I am entitled to recover a debt of £50 I should, in principle, have access to justice to enable me to recover it if my debtor does not pay. It would be an affront to justice if my claim were simply struck out.”

In his Lordship’s view this was a claim that could and should have been allocated to the small claims track of the Bristol County Court. Intellectual property claims are governed by Part 63 of the Civil Procedure Rules and CPR 63.1 (3) allocates intellectual property claims to the multitrack but there is nothing in that Part of elsewhere in the CPR to prevent the reallocation of the claim to the small claims track under CPR 26.10.

On 15 Nov 2011 the government announced that it would introduce a new small claims jurisdiction for the Patents County Court. Earlier this year it carried out a consultation on the implementation of that commitment. I wrote about the consultation in “The New Small IP Claims Jurisdiction” on 5 March 2012. The government has now given its response to the consultation. In the executive summary the government said:

“With the overarching aim therefore to ensure that from the outset the IP small claims track in the PCC works effectively, providing for a quick, cheap and easy means for resolving lowest value IP disputes, the Government:

• intends that the small claims track for IP claims should work largely the same as the general small claims track (any deviations from that approach are outlined below);
• will assist the Judiciary in providing appropriate guidance for users to help them to understand the scope of the track which will help to ensure that it will function effectively from inception;
• proposes that the initial scope of the track should encompass the rights falling within the ordinary jurisdiction of the PCC, i.e. under Practice Direction 63 paragraph 16.1 with the further addition of plant breeders’ rights;
• will set an initial limit on damages available on the IP small claims track at the current general limit of £5,000, with this rising to £10,000 in line with the proposed general increase in 2013;
• intends that, as interim injunctions are available under the more appropriate ‘streamlined procedure’ of the PCC and at commensurate cost, they will NOT be available on the IP small claims track in the initial stages;
• will continually monitor the working of the track in the PCC and will formally review this in 2014.”

It seems that claims will be handled by deputy district judges with relevant IP experience. Allocation will be decided by Judge Birss QC. Most claims will be disposed of on paper and any hearings that may be needed will take place in the Rolls Building.

There will continue to be alternatives to litigation. Domain name disputes will be handled under ICANN’s UDRP, Nominet’s DRS or some other dispute resolution service. The Intellectual Property Office will continue to offer advisory opinions on whether a patent is valid or whether it has been infringed. Arbitration and mediation will still be available by a number of dispute resolution service providers such as the WIPO and NIPC Arbitration and NIPC Mediation. I discussed one of these alternatives in my presentation on enforcement.

 If anyone wants to discuss this topic with me they should call me on 0800 862 0055.

Pre-Action Correspondence

On 16 Jan 1997, the US law firm, Sughrue, Mion, Zinn, Macpeak & Seas, sent the following letter to Prince Plc in England:

“re: Domain Name PRINCE.COM

Trademark Infringement and Dilution

[…]

Dear Sirs:

We represent Prince Sports Group, Inc., with respect to trademark and other intellectual property matters. Prince is the owner of the famous PRINCE trademark, which has been used in connection with tennis rackets, squash rackets, other sporting items and clothing for at least the past 20 years in the United States. Prince is the owner of several US registration for the PRINCE mark, many of which are incontestable, e.g. Registration Nos. [8 numbers]. Our client has also registered the PRINCE mark in many other countries throughout the world, including the United Kingdom. Through extensive sales and advertising under the PRINCE mark and the excellent quality of our client’s products, the PRINCE mark has become an asset of immeasurable goodwill and value to our client.

It has come to our client’s attention that you have registered “PRINCE.COM” as a domain name with Network Solutions Inc, (NSI) thereby preventing our client from registering its house marks and trade name as a domain name. We are writing to advise you that your company’s use and registration of PRINCE as a domain name constitutes infringement and dilution of our client’s trademark rights in PRINCE, as well as unfair competition, under the Lanham ACT, 15 USC 1051 et. seq.

This matter can be amicably resolved by an assignment of the PRINCE.COM domain name to Prince Sports Group, Inc., in accordance with the procedures of NSI and an agreement not to use PRINCE as part of any new domain name you may select. While we are willing to wait for your orderly transition to a new domain name, we must have your immediate written agreement to assign the PRINCE.COM domain name to Prince Sports to avoid litigation.

We look forward to hearing from you or your attorney in the very near future.”

That letter landed their client in a heap of trouble for instead of meekly assigning the domain name to Prince Sports Group Inc., the English company responded with a claim for groundless threats under s.21 of the Trade Marks Act 1994. Upon the hearing of the English company’s application for summary judgment, Mr. Justice Neuberger granted Prince Plc a declaration that the threat of litigation was unjustifiable and an injunction against the continuance of the threat (see Prince Plc v Prince Sports Group Inc. [1998] FSR 21).

Threats actions are not the only hazards of pre-action correspondence. If a party fails to provide sufficient information to enable the other party to understand the issues, withholds documents that have been requested without good cause or fails unreasonably to consider alternative dispute resolution that party risks financial or other penalties should such conduct give rise to litigation.

The Practice Direction – Pre-Action Conduct and the Code of Practice for Pre-Action Conduct in Intellectual Property Disputes set out a procedure for the exchange of information and documents in intellectual property cases. I have discussed this procedure and the contents of a letter before claim and a letter of response in a short article entitled “IP Dispute Resolution in England and Wales: why sending a US style ‘Cease and Desist Letter’ or old style ‘Letter before Action’ may not be a good idea” which may be downloaded from the JD Supra web site.

When I first came to the Bar it was rare for counsel to settle letters before action. Nowadays, advising on and settling letters before claim and response is probably my single, biggest source of work. I charge about £400 + VAT for settling a letter of claim or response though advising on the strength of a case is usually rather more. Should anyone want to discuss this topic, he or she can call me on 0800 862 0055 or complete my contact form.