NIPC Arbitration’s “Safe Harbor” Dispute Resolution Service

If a living individual (“data subject”) suffers damage or distress by reason of a contravention in the United Kingdom of any of the requirements of the Data Protection Act 1998, he or she can bring proceedings in the civil courts against the person holding or processing data that relates to him or her (“data controller”
for compensation under s.13 or for an order for the rectification, blocking, erasure or destruction of the data under s.14 of the Act. Similar remedies are available under the data protection laws of other EU and EFTA member states.

It is not so easy to obtain redress if the damage or distress is occasioned by a data controller in the United States as there is no comparable data protection legislation in that country. For that reason, art 25 of the Data Protective Directive (Directive 95/46/EC) requires member states to ensure an adequate level of protection before personal data are transferred to the United States. There are two ways of doing that:

  • The data importing organization can contract with the data exporting organization to provide such protection. A model contract to that effect is annexed to Commission Decision of 5 February 2010 on standard contractual clauses for the transfer of personal data to processors established in third countries under Directive 95/46/EC.
  • Alternatively, a company or other organization in the United States that wishes to import personal data can subscribe to the “Safe Harbor” principles. These are guidelines for processing personal data that have been issued by the United States Department of Commerce together with a set of Frequently Asked Questions. Decision dated the 26 July 2000 the Commission decided that the Safe Harbor Principles provide an adequate level of protection for personal data.

The Safe Harbor principles require:

“(a)    readily available and affordable independent recourse mechanisms so that each individual’s complaints and disputes can be investigated and resolved and damages awarded where the applicable law or private sector initiatives so provide;

(b)     procedures for verifying that the commitments companies make to adhere to the safe harbor principles have been implemented; and

(c)     obligations to remedy problems arising out of a failure to comply with the principles.

Sanctions must be sufficiently rigorous to ensure compliance by the organization.”

This requirement is amplified by the “FAQ on Enforcement and Dispute Resolution”.

NIPC Arbitration has been invited by two US companies to provide dispute resolution services in accordance with the Safe Harbor principles and has received enquiries from several more. An overview of the service is available here and advice on how to use the service is here. The service is modelled on the Uniform Domain Name Dispute Resolution Policy and all the neutrals are members of the WIPO Arbitration and Mediation Centre’s domain name dispute resolution panel. The arbitrator’s fee of £500 will be divided equally between the parties.

For more information, call 0800 962 0055 or complete my contact form.

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Proceedings in the IPO

On Friday 29 Oct 2011 I attended the hearing officer at Concept House, the head office of the Intellectual Property Office in Newport. My opponent attended the hearing at the IPO’s premises in Bloomsbury. Her client was at the end of a telephone in Chicago where it must have been some unearthly hour of the morning. The hearing rooms in Newport and London were connected by video link.

Newport is my venue of choice whenever I am before the Comptroller (or “the Registrar” as he or she is called in trade mark and registered design cases). Newport is approximately the same distance from Huddersfield as London, but much more convenient. The roads are less congested advocates can park just outside the main entrance. Also, an en suite room at the Travelodge at 66 Bridge Street costs the princely sum of £37.50. A similar room in WC1 would cost at least three times as much. And after the hearing there is the bonus of a drive back through the Wye Valley and Forest of Dean.

For those who do not appear regularly before its tribunals, the Chief Executive of the IPO exercises judicial as well as administrative functions. He or she resolves disputes between examiners or other IPO officials and applicants for patents and trade marks which are known as ex parte proceedings. He or she also determines disputes between applicants or proprietors of patents, trade marks, registered designs and design rights and third parties which are known as inter partes proceedings.

The Chief Executive’s jurisdiction is derived from:

These statutes establish separate systems of tribunals for each of the above intellectual property rights. That is why the Chief Executive is known as “the Comptroller” in patent and unregistered design cases and as “the Registrar” in trade mark and registered design cases. Each of the above tribunals has its own rules that are made under the above statutes. The Chief Executive rarely exercises his judicial functions in person. Instead, a number of officials known as “hearing officers” decide cases on his or her behalf. There are different teams of hearing officers for patent and unregistered design cases and trade mark and registered design cases. Appeals from hearing officers in patent matters lie to the Patents Court. Appeals from hearing officers in trade mark officers can be made either to the Chancery Division (which includes judges who are not assigned to the Patents Court) and from there to the Court of Appeal and Supreme Court or to an experienced intellectual property practitioner known as “the appointed person” whose decision is final. Appeals in registered and unregistered designs cases lie to an appeal tribunal consisting of judges of the High Court and Court of Session.

Some of the hearing officers have trained as mediators where they offer to resolve disputes for as little as £500 per half day including room hire in Newport and £750 in Bloomsbury which is remarkable value for money (see the IPO’s leaflet “Mediation of Intellectual Property Disputes”). I have attended a mediation before a hearing officer mediator as counsel and have been very impressed. Indeed, one retired hearing officer mediator, Peter Back, is now a member of the NIPC mediation panel. Some of the trade mark hearing officers sit as adjudicators on the Company Names Tribunal which hears disputes under s.69 of the Companies Act 2006.

Although there are separate tribunals with separate sets of rules, the tribunals’ practice has been approximated by a number of Tribunal Practice Notices of which the most important are probably TPN 1/2000 Practice in Proceedings before the Comptroller and TPN 2/2000 Costs in Proceedings before the Comptroller. For more information on practice in patent and designs cases read the IPO’s Litigation and Hearings manuals. For more information on trade marks read the “Tribunal Section” in the Manual of Trade Marks Practice and the Tribunal Guidance Update.

Anyone who wants to discuss this article or IPO proceedings in general can call me on 0800 862 0055 or send me a message through my contact form, Linkedin, Xing, Facebook or @nipclaw on twitter.

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Taking a franchise may be the best thing you ever do.

But on the other hand it could be the worst. And the trouble is that you probably won’t know which it is to be until after you have started to trade by which time it is likely to be too late.

Clearly some people do very well out of franchising. I heard four success stories at the “Franchisee Panel” organised by at the National Franchise Exhibition in Birmingham on 1 October 2011. The speakers were three young men (and one not so young man) from four different franchises who spoke with almost religious fervour about their businesses:

They were all impressive – particularly Steve Tarpey who spent a long time looking for work after losing his job as sales director for a global company before moving into agency nursing and home care – and it was good to hear them. There are not too many successes in today’s economy and I wish them all the best of luck.

Touring the National Exhibition Centre yesterday it was hard to remember that there was a recession – sorry depression (on some measures the worst in the UK since the 1870s). Stand after stand promised a trouble free road to riches beyond the dreams of Croesus. My favourites were Felicity Hats a hat hire agency with the most delicious hats on its stand, The Cherry Tree offering equally tempting jams and chutneys, and somewhat less girly, Plug + Play Design of Godalming which fired off an email to me with information about their offering within minutes of my visiting their stand.

At one level this positivity is not misplaced. The retail banks seem to like franchising – partly because business format franchises are much more likely to succeed than other start-ups but also because they usually have plenty of collateral. Notwithstanding Vickers, Basel, Lehman Brothers and Greece the banks still seem to have loads of money to offer to franchisees even now. The first speaker of the day was Richard Holden, the head of franchising at Lloyds Banking Group, who gave some very good advice to anyone contemplating franchising including 30 key questions for intending franchisees to ask of prospective franchisors which I strongly recommend. Similar advice was available on the stands of the Royal Bank of Scotland and HSBC.

Having said all that I have seen what can go wrong with franchising. In the days before the “Access to Justice Act 1999” I got a lot of work from legally aided franchisees who were facing the loss of their homes or even bankruptcy because they had taken franchises that had not worked out for them. Usually there was only so much one could do for them because they were bound by agreements that the franchising expert John Pratt described yesterday with disarming candour as “the most one-sided agreement you are ever likely to see”. In the early days of my career I was able to blow apart many of those agreements citing Pronuptia de Paris GmbH v Schillgalis [1985] ECR 353 to bemused Queen Bench masters and district registrars (or district judges as we now call them) around the land because very few franchisors had notified their schemes to the Commission but then it became very much harder after the Commission adopted the franchising block exemption (Regulation 4087/88 of 30 Nov 1988). After that loophole was plugged it was occasionally possible to find other holes to poke in franchise agreements relying on the Unfair Contract Terms Act 1977 or rules of equity or common law but that required resources. After paragraph 1 (h) of Schedule 2 to the Orwellianly named Access to Justice Act 1999 removed business disputes from the scope of legal aid the only way distressed franchisees could be saved was by taking their cases pro bono or for grossly reduced fees which I occasionally did and, indeed, when the justice of the case so requires, continue to do.

“Go to bankers and solicitors who understand franchising” and “Make sure your franchisor or advisor is a member or affiliate of the British Franchise Association” were recurring themes throughout the conference and that is common sense. There was a lot of good advice on offer from solicitors like John Pratt whose “Franchisor’s Handbook” is almost as readable as a novel. The BFA does good work to set and uphold standards and offers mediation and arbitration schemes to resolve franchising disputes less expensively than litigation. But I am not sure that that is enough. One obvious difficulty is that all the great and the good in franchising seem to act for both sides and it is very difficult to run with the hares and hunt with the hounds. And it is all very cosy with body A recommending advisor B and vice versa though to a certain extent that is inevitable since franchising is a niche activity that requires specialization. What is really needed is a sort of trade union for franchisees or at least a franchisees’ advocacy group and that, of course, is probably never going to happen for all sorts of reasons.

So what advice can be given to prospective franchisees? The first thing I would say is be very, very careful and very, very sceptical. If a deal seems too good to be true then it probably is. The second is to plan for the possibility of failure as best you can. Failure can occur for all sorts of reasons and it may not necessarily be your fault. Attend all the seminars, read all the bumf, take all the advice on offer from the BFA, the banks and their recommended law firms and other professional advisors but plan an exit strategy in case everything goes pear shaped. It will probably cost you a lot of money in legal fees if you ever get into a dispute and even more if you want to buy yourself out of your franchise or start another business. If you have that kind of cash then there is no problem. If not, then think about taking out legal indemnity or other insurance. Just as a prenuptial agreement is very hard to contemplate when choosing your wedding dress so an exit strategy is hard to think about when £ signs are flashing in your eyes but just as couples fall out of love so franchisees and indeed franchisors can fail.

If you want to discuss any of the issues in this article or franchising in general call me on 080 862 0055 or get in touch through my contact form.

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Is this Really All We Can Expect over the Next Ten Years?

I have just received an email from Mr. Neil Mackay, Managing Director of Advantage Business Angels which contains the following Jeremiad:

“Despite the focus on the immediate problems in the USA and in Greece the underlying issue remains: the western economies have to change. China, India, Brasil et al all work harder for lower rewards and arguably now have education systems to challenge those in the west.

Politicians talk about this rebalancing as a short period of adversity. The serious economists I read talk about a decade of real adversity and declines in living standards in the west. In particular there is talk about an increase in the price of risk.”

That chimes in with the speech by Lord Digby Jones at the “Growth Through Innovation” conference at PERA last week which I reported last week in my Inventors Club blog. However, are we inexorably destined to “a decade of real adversity and declines in living standards.” On Sunday evening I listened to In Business on Radio 4 which reported on additive manufacturing or 3D printing. This is one of a number of technologies that enable just about anyone to make just about anything just about anywhere. One of the contributors spoke of bringing manufacturing home. What he meant was that if it is possible to fabricate in say Birmingham a currently imported component there is no longer any advantage in importing it from a low wage economy.

Whether these technologies develop will depend in large part on how the law protects those technologies and the products they generate. I touched briefly on that issue in my case note on the “Star Wars” Helmet appeal, Lucasfilm v Ainsworth yesterday.

Last week the courts delivered a slew of important cases which I am working through. Having been in Newzbin I, the next case that I shall discuss will be Mr. Justice Arnold’s decision in Newzbin II or Twentieth Century Fox and Others v BT. I have also circulated “Counsel’s Opinion”, my Summer update on IP law for solicitors and patent and trade mark attorneys, and “IP Yorkshire”, my review of branding, design, technology and the arts in Yorkshire and the Humber. Like many other barristers I am following the development of the special English speaking common law enclave in Dubai known as the Dubai International Financial Centre (“DIFC”). Today I blogged about data protection legislation in the DIFC.

If anyone wants to discuss any of those issues, requires advice in a specific case or requires representation here, the EPO, OHIM or, indeed, Dubai, he or she should not hesitate to call me on 0800 862 0055 or use my contact form.

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No Win No Fee

From time to time I am asked whether I will take a case on a CFA (conditional fee agreement). A CFA is defined by s.58 (2) (a) of the Courts and Legal Services Act 1990 as “an agreement with a person providing advocacy or litigation services which provides for his fees and expenses, or any part of them, to be payable only in specified circumstances.” In other words, a type of no win no fee agreement. I have always been puzzled why members of the public should expect lawyers to take cases on such a basis. I have never heard of a doctor entering a no cure no fee agreement (though maybe the NHS should look into it) or a teacher offering a no exam pass no fee deal.

Although I always keep an open mind when I get such requests I have yet to enter a CFA. The reason for that is that I have yet to see a case that is so strong that the prospective success fee justifies working for months on end for nada. Like most people I have to eat. I have a mortgage, utility bills and taxes to pay. And no creditor will wait until my solicitors recover costs from a defeated and often recalcitrant defendant.

“But other lawyers will accept instructions on a no win no fee basis” pleads the client sometimes prompted by his or her other professional advisers. “Look at all those firms that advertise their services in A & E or on daytime television.” My answer to that is that they are in a different area of law. CFA make sense where liability is easy to establish and the defendant is an insurance company that can afford to pay substantial damages. Such cases tend to be settled very quickly.

But IP litigation is not like that. For a start liability and damages or other pecuniary relief are usually decided in two separate stages. There often have to be pleadings, disclosure, exchange of witness statements and experts report for each stage of the litigation. That can be expensive and time consuming. Secondly, liability is often difficult to determine. The question whether a patent has been infringed usually turns on the meaning of a claim which may be open to more than one interpretation. Objective similarity in a design right or copyright case may betoken copying but it may equally be explained by functional exigency. Thirdly, since the new Patent County Court rules came into force on 1 Oct 2010 there has been a £50,000 cap to the costs that can be recovered and that includes success fees and after-the-event premiums (see “The New Patents County Court Rules”
IP/IT Update, 31 Oct 2010). Finally, it is often the case that the defendant has no assets left at the end of a long intellectual property case.

“But how come that it can be done in the USA?” Asks the client back from his hols in Florida. “I’ve heard of lots of patent cases there that are funded on a no win no fee agreement.” “A different sort of no win no fee agreement” is my answer. “There lawyers can contract for a share of the damages and not just a mark-up on their fee. Also, damages tend to be awarded by juries and liability and damages are decided in one go.” I should add that the law on CFA and ATE insurance may be reformed by the Sentencing and Punishment of Offenders Bill. If that bill is passed it will be possible to enter damages based agreements and claimants will have to pay success fees and ATE premiums out of their damages (see The Effect of the Legal Aid, Sentencing and Punishment of Offenders Bill on Intellectual Property Litigation” IP/IT Update, 14 July 2011).

So, what’s a small or medium enterprise, inventor or other intellectual property owner to do if he, she or it wants to enforce an intellectual property right? In most cases, the short answer is to take out intellectual property insurance when the right is granted. One can’t rely on general legal expenses insurance since most policies exclude intellectual property claims expressly. I know that there are two schools of thought as to whether IP insurance is worth taking out but in my view it is a lot better than nothing. I identified some insurers in my article “IP Insurance Five Years On”
Inventors Club, 23 Oct 2010. Check them out. There may also be others by now. You can also consider some of the ADR schemes such as IPO examiners’ opinions, the UDRP and Nominet’s DRS for domain name disputes, mediation and arbitration. I discussed all those possibilities in my presentation to the IPO’s awareness day at Leeds Library last September. You can also talk to us either by calling us on 0800 862 0055 or using our contact form.

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Another Toe in the Water: Bar Contracting Conference

In “One Toe in the Water” I discussed in context the Bar Standards Board’s decision in principle to regulate entities in it its press release of 28 April 2011.  I considered how the Bar had grown exponentially (I was going to say “like Topsy” until I remembered the origin of that phrase in Uncle Tom’s Cabin) while the supply of work had shrunk and was likely to shrink still further as a result of the proposals that have now found their way into the Legal Aid, Sentencing and Punishment of Offenders Bill. I concluded my article with the observation that the Bar needs to be more entrepreneurial.

That was a refrain that I heard more than once at the Bar Contracting Conference in the Cumberland Hotel yesterday. I heard it particularly clearly from Christine Kings, Commercial Director of Outer Temple who spoke twice yesterday: once on new business opportunities in the plenary session in the morning and again in the afternoon in the workshop on international work. Jonsp27 tweeted that her talk was “by far  the best so far” with “practical ideas” and I have to agree.   Its positivity cheered me enormously.

I also heard the same message from Michael Todd QC who gave the other outstanding speech. Todd was called the same day as me and he began his speech with an observation of how chancery practice has changed since we first entered the profession. In those days law firms were very much smaller and less specialized. Clients were prepared to wait months for counsel’s opinion. If they wanted a conference they had to attend us at our chambers. All that has now changed.  The Bar is no longer the senior branch.   Counsel have to work as a team with accountants and other professionals as well as solicitors.  Barristers have to be prepared to deliver opinions almost instantly in by telephone or whatever other form the client requires.

The importance of speed and flexibility was reinforced by Dr. Mirza Ahmed, Corporate Director of Governance of Birmingham City Council. He stressed that barristers should market themselves as business advisers and not just advocates.  He outlined his vision for the future where procurement companies would market the services of barristers from different chambers with different specialisms in different geographical areas.

All of this will require a change in our rules and Vanessa Davies of the Bar Standards Board outlined some of the changes in the pipeline. As I mentioned in One Toe in the Water, the Board has agreed to allow regulated entities to conduct litigation but it will not allow them to hold clients’ money. However, it is contemplating a custodian scheme whereby the Bar Council would hold funds.   To my surprise – and unless I have misunderstood him – Peter Lodder QC offered on behalf of the Bar Council to participate in the scheme. The idea of my professional association’s operating a client account is intriguing and as Sir Humphrey would have said in “Yes Minister” rather a bold one.  I think banks, accountants or other trustees would be better placed to hold and invest clients’ moneys in escrow.

Returning to Ms. Kings, she was fizzing with ideas. Two that occurred to her during the meeting were a specialist mediation service for civil partnerships and a specialist legal risk assessment service.  She also had another one which she kept to herself because she thought it was particularly good. In the international workshop she spoke about the company that certain practitioners in Outer Temple had set up to attract international work.   With people like her about, maybe the Bar really does have a future after all.

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On the Side of the Angels

On 16 May 2011 I received an email from the managing director of one of the UK’s leading national investment syndicates complaining that they, like all the other angel networks, were still seeing far fewer investible propositions than they did 3 years ago. Less than a fortnight later I received an email from the administrator of a regional angel network looking for investment ready, start-up or early growth stage businesses with high growth potential for its next investment forum.   Those emails surprised me as other sources of funding are drying up.   The regional development agencies and regional Business Link offices are running down. Their successors, the local enterprise partnerships, have no central government or regional funding.   Banks are lending less and imposing stricter conditions on their loans.   The Regional Growth Fund is a one-off initiative to create or preserve jobs in the areas most likely to be hit by public spending cuts.

I think the reason why so few start-ups and early stage companies are coming forward for angel funding is that there is widespread ignorance on the part of the public and even some professional advisors as to what angels are and what they do.  This ignorance is even shared by people who could become angels.   Earlier this week I was approached by a member of a local inventors’ club who had some capital that he wanted to invest in start-ups and early stage businesses and wanted my advice as to what he should do.   Warning him that I was not qualified to give investment advice I advised him to consult those who were and urged him to read as much as possible before consulting those professionals.

For him and others who need a place to start, here is a primer on angel investment.   On our Inventors Club website we publish a general overview explaining the differences between short and longer term funding and listing possible sources of both types.   We follow that up with an introduction to funding with links to articles on grants, loans and overdrafts, community development finance institutions and private equity as well as business angels.  On the angels page, I explain that most belong to syndicates or networks.   Some of these are national like Advantage Business Angels and Beer and Partners.  Others are regional like YABA for Yorkshire and North West Business Angels. We have tried to catalogue as many networks as possible for East Anglia, the East Midlands, London, the North East, the North West, South East, West Midlands, Yorkshire and the Humber, Scotland, Wales and Northern Ireland.  When we find a new one we list it in our Inventors Club blog.

Most angel networks belong to the British Association of Business Angels whose site contains a lot of useful information. I would also recommend the Business Link portal on business angels and the Angel News website.  For more detailed information see the NESTA/BBAA report “Siding with the Angels” which was published in May 2009. Angel News also publishes a regular email newsletter to which one can subscribe on the site.

While entrepreneurs and investors know less than they should about angels, it is also my experience that angels and private equity investors know less than they should about intellectual property.  To assist them, I have published a short guide to “What Business Angels and VCs need to know about IP” on the JD Supra website.   I have also outlined the services that these chambers offer to angels and private equity investors elsewhere on this website.   Anyone who needs further information on this topic should call me on 0800 862 0055 or use our contact form.

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The Right Way to Move a Motion

Members of the Chancery Bar Association have just received the following statement from the Chancellor:

“The judges of the Chancery Division are concerned at the increasing number of applications in which the advocates involved and their instructing solicitors have failed to observe the provisions of paragraphs 5.11 to 5.14 (both inclusive) and 5.24 of the Chancery Guide 2009 Edition. Commonly the result is to cause delays in hearing other applications and/or wasted costs. The judges have decided that they must consider the imposition of sanctions in the event of any future failures.

Accordingly, in any case in which the judge considers that the provisions of those paragraphs have not been properly observed he/she will require an explanation from the advocates/solicitors concerned. In addition the judge will consider whether (1) immediately to adjourn the hearing to be continued as an application by order on another day before another judge; and/or (2) to report the advocates/solicitors concerned to their disciplinary authority; and/or (3) to report the circumstances to the Chancellor (via his clerk) so that in the event of any similar conduct of an application before another judge the Chancellor may consider reporting the advocates/solicitors concerned to their disciplinary authority; and/or (4) disallowing the recovery of any wasted costs; and/or (5) making a wasted costs order against the advocates/solicitors concerned.

The judges hope that this timely warning will ensure the proper observance of those paragraphs of the Chancery Guide without the necessity to impose any of the above sanctions.”

Those paragraphs of the Chancery Guide are about time estimates. Paragraphs 5.11 to 5.14 concern all applications while paragraph 5.24 is concerned with time estimates for applications without notice. The applications that this statement covers are applications to judges in open court which were known as motions before the Civil Procedure Rules came into force. Such applications are for relief that only a judge can grant such as injunctions or committal for contempt of court. All other applications should be made to a master in the Royal Courts of Justice or to a district judge elsewhere.

The Rules of the Supreme Court used to draw an important distinction between motions and applications to a judge in chambers known as summonses. Then as now the hearing of an application in chambers had to be booked, usually days and sometimes weeks or months in advance. By contrast, a judge could be moved more or less any day so long as two clear days notice was given to the other side and the court. A clear day was a working day during the law term not counting the day of service or the day of the hearing. Thus notice of a motion on Thursday could be given at any time up to 16:00 on a Monday. Even that notice could be dispensed with in very urgent cases or where notice would give the other side an opportunity to do something naughty such as hiding or destroying evidence or removing assets from the jurisdiction. The second big difference was that notices of motion did not have to be accompanied by evidence (then in the form of written statements sworn before solicitors known as affidavits) whereas summonses did. Finally, it was unusual for the party that succeeded on motion to be awarded his or her costs at the end of the hearing. The usual orders were for the plaintiff’s or the defendant’s costs in the cause or costs reserved which meant that nobody would have to pay anything until the end of the litigation and that could be years away. As often as not the action would be compromised with each party paying its own as part of the settlement. The unlikelihood of an immediate order for costs removed a great deal of the risk of making interim injunction applications. Motions were a feature of Chancery litigation. Interim injunction applications in the other Divisions or in the County Courts were usually made in chambers. Because the relief that intellectual property owners most urgently require is an immediate stop to an infringement, the speed, convenience, relative inexpensiveness and low risk of an application on motion provided an excellent remedy.

Although the formal distinction between motions and summonses was abolished by the CPR the practical distinction survives. Chancery judges continue to hear applications in open court in London and a number of provincial cities on applications days though there are far fewer of those applications than there were before Lord Woolf’s so-called reforms, The reason for that is obvious. It is a lot more expensive to go to court nowadays than it once was and it is particularly expensive and risky to apply for an interim injunction. First, court fees have sky rocketed. Secondly, a great deal more work now has to be done in the early stages. In most cases, the Practice Direction – Pre-action Conduct and the Code of Practice for pre-action conduct in intellectual property disputes have to be complied with. A statement of case is expected with the claim form and an application notice has to be supported by witness statements containing the evidence in chief. Finally, parties now face the very real prospect of paying many thousands of pounds at very short notice if they are unsuccessful in bringing or resisting the application.

Of all the tribunals I have appeared before in my 34 years at the Bar the Chancellor, Sir Andrew Morritt, is easily the nicest. When he was Vice-Chancellor of the County Palatine of Lancaster and I got to know him well. He is not in the least tetchy. He has a great sense of humour and considerable humanity. I remember teasing him in Newcastle by opening the mention of a compromise with the words “I regret to tell my Lord” his face dropped “that my learned friend and I have deprived your lordship of the opportunity of deciding a most interesting case”. Resuming his beam he replied “I’m sure we can live with that.” So when he threatens eye-watering sanctions for failure to comply with the Chancery Guide one can be sure that he had good reason.

Paragraphs 5.11 to 5.14 and 5.24 of the Chancery Guide contain nothing new. There has always been a 2-hour limit to what can be done on motion day. Ever since I was a pupil it has been the duty of the applicant’s counsel to tell the judge whether his case is likely to be effective or ineffective and, if effective, to give an estimate of the time required for the hearing. The only thing that has changed over the years is that it is now necessary to begin a skeleton with an estimate of the time required for pre-reading and an estimate of the time required in court (including time for judgment) (paragraph 5.13). Two hours is not a lot of time in the rough and tumble of the court room. Unless the parties have come to terms the only things that an applications judge can usefully do in that time are

  • stand over the application for hearing on another day as an application by order,
  • give directions for the exchange of evidence and
  • consider whether to order an injunction over the hearing of the application or accept an offer to pay royalties into escrow (a Brupat order).

If counsel and their instructing solicitors do not know these things it must be through lack of experience.

So here are some tips on how to move a motion from an old pro.

  1. If you are for the claimant ask yourself whether your client really needs an interim injunction. Court lists are much less cluttered than they used to be. The interval between the issue of a claim form and trial is not much longer than that between the issue of an application notice and the hearing of an application by order. A contested application can double the cost of the litigation and there is a risk that your client may have to pay a whole shed full of costs at very sort notice if the application fails for any reason. Is the interim relief really worth the risk and expense?
  2. Similarly, if you are for the defendant, ask yourself whether your client can’t give some sort of undertaking if only to keep full and accurate records or make a payment into escrow.
  3. Prepare your skeleton and your witness statements well. Before you put pen to paper or nowadays finger to keyboard read and inwardly digest Appendices 6 to 9 to the Chancery Guide. Make sure you and your solicitors comply strictly with those guidelines. Most applications are won and lost before the parties come anywhere near a court. That is because the judge forms a preliminary view on the papers from which it is very hard to shift him. Make sure that you don’t give him too much to read but that everything you do give him is relevant. It is very tempting to stress the merits of your case. Keep that for trial. All he needs to know about the merits at this stage is whether or not you could win. Concentrate on the main points that he has to consider such as whether your client will suffer irreparable loss if he decides against you, whether the other side’s loss is less than your client’s and can easily be quantified and whether your client can compensate the other side in damages. Get that evidence to the other side as quickly as possible. If you’ve done your job well you should make them think whether they really want to fight you.
  4. If you can’t settle the whole dispute see what you can settle. If you can agree terms till trial then so much the better. If not, at least try to agree terms for a stand-over till the hearing of the applications by order such as a timetable for the exchange of evidence and any undertakings that have to be given up to the hearing of the application. If you can do any of those things you can save at least some costs.
  5. Any agreement that is reached before the date of the hearing must be communicated to the court in good time. Ideally, that should be in the form of a minute of order signed by all the parties. It may be necessary for your clerk, solicitor or other representative to attend the listing officer with the signed minute the day before the hearing. If you are a litigant in person the court will probably ask you to attend the listing officer so that he or she can make sure that you understand what you have signed up to.
  6. If you have to attend the interim applications day get to court in good time and seek out your opponent. See whether you can agree a minute of order that can be mentioned to the judge even at this late stage. If you are still in negotiation when you are called into court you can always ask the judge for more time.
  7. At 10:30 or whenever the sitting begins the judge will read a roll call. All he or she wants to know at this stage is whether you have agreed anything and how long it will take to dispose of your application. If you have reached complete agreement your application is ineffective and you should be able to mention the terms of your minute within a few minutes. The correct response is “ineffective, my Lord (or Lady) 2 minutes”. If you can do that you will be rewarded with an early release so that you can be out of the court before 11:00. If you have not yet reached agreement your application is effective and the correct response is “effective, my Lord, 30 minutes” or however long you need. If you are still negotiating and the discussions are likely to bear fruit you can also mention that. But that should not take more than 30 seconds. If you can’t agree anything and there is likely to be a scrap over the terms of the stand-over you should allow yourself at least an hour for argument. The problem with that is that the judge will hear you last unless you or your opponent are able to come to terms in the meantime.
  8. The usual point of disagreement is whether the judge should grant an injunction over the hearing of the application by order. Think long and hard about whether you really need to fight this battle. The judge will not be best pleased if he or she thinks you or your client are silly, Although he or she will probably reserve the question of costs to the hearing of the application by order he or she can always make another order if he or she thinks you are being unreasonable. If you do have to fight the point concentrate on the question of who is going to suffer most from the grant or denial of an interim injunction over the hearing of the application. This is not a dry run for the application by order still less is it the first round of the trial.
  9. If the application is stood over make sure that you comply with the timetable. If you need more time to prepare your evidence the court will probably grant it to you without a hearing provided you have good reason and ask for it in good time.
  10. Try to agree bundles with the other side and lodge them with the court in good time. Make sure that each page is legible and that the bundle is indexed, paginated and properly bound.
  11. Make sure your skeleton complies with Appendix 7 of the Chancery Guide, that it is lodged in good time, that your statement of costs makes sense and is exchanged in good time.
  12. Attend court at least 20 minutes before the hearing of the application by order in case there are last minute instructions or negotiations and try to enjoy yourself. It’s usually good fun for the advocates if not the poor blighter who has to pay for it all at the end of the day.

My chambers have a special website on inunctions at which needs a little updating. If you or your client have any questions on this matter you can contact us through our request an estimate or contact form or you can call us on 0800 862 0055.

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One Toe in the Water: Bar Standards Board to regulate Entities

If my memory serves me correctly there were some 3,000 barristers in England and Wales when I was called to the Bar in 1977. Now there are over 12,000 in independent private practice (see the Bar Council’s Annual Statistics for 2010). This four fold increase was financed largely by legal aid.

Public funding for civil litigation was reduced considerably by Schedule 2 to the Access to Justice Act 1999. Although few chancery or commercial practitioners and their clerks would admit it, the exclusion of legal aid for matters arising out of the carrying on of a business under paragraph 1 (h) of that Schedule had a devastating effect even on the practices of counsel who did very little publicly funded work.   That was because it was the market trader flogging snide jeans or the chap who collected post-mix spirit boxes from pubs and cafés with a heavily discounted former council house to lose would force claimants to take their cases to trial. Nowadays such parties settle at an early stage if indeed they are not deterred from counterfeiting or piracy thus reducing considerably the volume of chancery and commercial litigation.

The Ministry of Justice’s Proposals for the Reform of Legal Aid in England and Wales (Consultation Paper CP12/10 Nov 2010) threaten to have a similar effect on the practices of criminal, family and general common lawyers. Clearly the Bar has to do something if it is to survive. That “something” was companies that could procure work for barristers (procurecos”) by, for example, bidding for block contracts.   Such companies were first suggested, I think, by fellow Mancunian Michael Redfern QC at a special brain storming session of the Bar Council in June 2009 which I attended by telephone. The problem with procurecos, however, was that they cannot actually provide legal services. It is not obvious to the average punter or indeed practitioner what they can do. Although one or two chambers including mine have set up such companies, they are not exactly taking the legal services market by storm.

In his paper on “The Future of the Bar, Nicholas Green QC envisaged the evolution of procurecos into companies that could actually supply legal services (“supplycos”) (paragraphs 132 – 134). Such companies would have to be regulated to comply with the Legal Services Act 2007. Following the publication of Green’s paper the Bar Standards Board consulted the public and profession on “Regulating Entities” in September 2010. Apparently 75% of the respondents to that consultation considered that it was in the public interest for the Board to regulated entities. At its latest meeting, the Board decided in principle to regulate advocacy focussed alternative business structures, legal disciplinary practices and barrister only entities but not multi-disciplinary practices.

The details of the decision are not yet known but, according to the Board’s press release of the 28 April 2011, regulated entities will be allowed to conduct litigation as well as provide the same services as the self-employed bar. Although that looks like a giant leap forward at first blush, it may not amount to much in practice since BSB regulated entitles will not be permitted to hold client money and there will be a 25% limit on non-lawyer owners or managers of BSBs. Also, the concession applies only to litigation not advising or assisting clients in non-contentious matters which might limit the scope for specialists in tax or indeed my field of IP.

However, never look a gift horse in the mouth. There may be ways around those limitations.  The bar needs to be more entrepreneurial and this is indeed a start.

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Happy Birthday Sierra Leone

Today is the 50th anniversary of the independence of Sierra Leone. I should like to wish everybody in that country and the Sierra Leonean diaspora here and elsewhere a very happy Independence Day.

I visited that country just over 4 years ago and wrote an article about its legal system in general and the protection of intellectual property in Sierra Leone in particular. Today I read through that article to see whether there is anything that needs to be updated.   The biggest change has been the compilation of a database of Sierra Leone statutes on the Sierra Leone web. There are also some links to some other legal websites on the Sierra Leone page of the World LII database.

Not too much on intellectual property I am afraid. All I could find was that domain name disputes in the .sl country code TLD are now determined by the WIPO in accordance with the UDRP.   But globalization could change all that.   SL is in the same time zone as Continental Europe. English is its official language. And its schools and universities produced large numbers of well educated graduates – such as my fictional heroine, the patent agent Princess Burreh-Hamilton in “Tales from the Patent Clinic”.

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