The rise of the Intellectual Property and Enterprise Court

March 28, 2017

The Intellectual Property and Enterprise Court (“IPEC”) is a specialist UK Court designed for smaller Intellectual Property (“IP”) cases. The Court’s procedures are designed so that it is usually a less costly and less complex alternative for all litigants, including small and medium sized businesses, to litigate their IP disputes.  

It is an alternative rather than replacement Court and IP disputes can still be brought in the High Court. There are a number of advantages and disadvantages which will influence a potential Claimant’s decision, some of which are explored in this article.

• Location and Expertise
  The IPEC predominantly sits in the Royal Courts of Justice in London, although like the Court of Appeal it can sit in other cities. The obvious advantage of using the IPEC court is that the court specialises in intellectual property disputes and the judges of the IPEC are experts in the field.
   
• Damages and costs capping
  Unlike in the High Court, the IPEC has a cap of £500,000 on the amount of damages which can be claimed. The IPEC is therefore unsuitable for any disputes in which the damages sought are higher or potentially higher than £500,000. Similarly, there is a cap of £50,000 on recoverable costs. This is especially important for parties: on the one hand it limits their potential exposure if they lose, whereas it also limits their potential to recover costs from the other side if they win. The cost capping also applies to each stage of the litigation process, which enables parties to see how their exposure increases as the case proceeds.
   
• Emphasis on getting it right first time
  The IPEC places a greater emphasis on making the Particulars of Claim as detailed as possible and right first time. It is much more difficult to amend a statement of case in the IPEC than it is in the High Court. This also reduces the amount of work and management time involved later on because the case should have been set out precisely from the start. This may also help to facilitate settlement as the parties should have a good idea of the other side’s case from the outset.
   
• Disclosure and Witness Statements are not as important
  There is no automatic disclosure provision in the IPEC court. Disclosure will only be ordered if it is absolutely necessary to the claim and if the costs do not outweigh the benefits. The same principle applies to witness statements and parties are required to make an application for witness evidence and cross examination.
   
• Decision without a hearing
  If both parties agree, the case can be dealt with on paper, which considerably helps to keep costs down. The case can also be concluded much more quickly.
   
• Disadvantages in the IPEC
  Careful thought must be given to the different case progression in the IPEC.  The reduced focus on evidence is not always appropriate, especially if significant numbers of documents and witnesses are required to prove the case.  While it would be wrong to describe IPEC as ‘cheap and cheerful’, the streamlined process is necessarily less rigorous than a full-blown High Court action.  That is partly the point.  And while certain features of IPEC claims can encourage settlement, the cap on costs can reduce the incentive for a Defendant with deep pockets to settle because of its reduced risk on costs.

  Despite those disadvantages, it is widely considered that the IPEC has proved itself a competent, accessible and forward-thinking forum for resolution of IP disputes.  Its creating has undoubtedly been a positive response to a clear demand for more accessible justice, particularly for sole traders and smaller businesses who simply do not have the resources to take on an expensive High Court claim.

  We at Darwin Gray have recently succeeded in obtaining a very favourable outcome in the IPEC on behalf of a client whose rights were widely infringed.  We were also able to offer funding from a 3rd party backer to enable it to happen.

  If you have an IP dispute which you think may be suitable for the IPEC and would like to obtain legal advice on your position, please do get in touch. 

  Article by Kate Heaney.