A costly reminder from the IPEC
Since its introduction in 1990 as the ‘Patents County Court’, the IPEC has been intended to offer a less costly and complex alternative to the High Court for parties seeking to resolve Intellectual Property (‘IP’) disputes.
According to a 2015 report commissioned by the UK Government on the reforms of the IPEC (‘the Report’), this objective has largely been met since the reforms in 2010. The IPEC is now widely regarded as offering litigants a quicker resolution system whereby both recoverable costs and damages awards are limited.
The number of cases filed by SMEs has increased substantially since the reforms and survey evidence within the Report shows that the cost caps and active case management in the IPEC were the most influential factors in this increase in cases.
Although the IPEC does have discretion in respect of costs, this must be exercised in line with the special rules applicable in the IPEC and this is rarely done - except in exceptional circumstances.
A reminder of this position came in the 2015 case of NOCN v Open College Network where Judge Hacon expressed concern and disappointment that two charities had refused the strong recommendation of the Court at the initial case management conference to settle the matter. Instead the parties had proceeded to trial and both incurred costs in the region of £400,000. Despite these costs being eight times the £50,000 recoverable costs limit, the judge saw no exceptional circumstances in which to depart from this sum.
Clearly, this is both a note of caution and reassurance. Parties should always carefully consider and explore settlement opportunities before proceeding to trial, but in the event that a case does reach trial, the Court is unlikely to order adverse costs against the losing party in excess of the £50,000 limit.