Intellectual Property and Enterprise Court Update “At Last: A Costs (Cap) Rise We Can Get Behind”

In addition to recent inflationary price rises, of everything from fuel to food, there has been a continual rise in the legal costs of litigation, which it is fair to say, has not always been reflected in the courts’ approach to costs.

It has therefore come as welcome relief to those using the Intellectual Property and Enterprise Court (IPEC), that the costs recovery caps, currently set at £50,000 (for claims relating to liability) and £25,000 (for claims relating to quantum), are set to rise. Those figures are expected to rise in October 2022, to £60,000 and £30,000 respectively.

It may not be a big increase, but there has not been a change to stage cap costs figures since 2013 and the latest change, announced recently by the Civil Procedure Rule Committee (CPRC) hopefully reflects to some degree the increase in legal costs incurred by parties in recent years.

What is IPEC?

The IPEC is a specialist court dealing with intellectual property (IP) claims with a value between £10,000 and £500,000. The court was set up with the intention to allow small and medium-sized enterprises (SMEs) access to justice, where it might otherwise have been too expensive to assert or defend an IP claim.

We understand that there are very good reasons to enforce IP rights: for example, with copyright infringement and theft.

With its approach to staged costs caps, IPEC is intended to allow “lower-value” IP disputes to be litigated at proportionate cost.

We should say that the IPEC costs cap is not a cap on the costs you could incur in pursuing or defending a claim through IPEC, it is a limit on the costs that can be recovered from you if you lose, and conversely, are recoverable by you from the other party if you win. It is therefore still vitally important to have a well-considered and informed strategy when approaching litigation in IPEC, whether as claimant or defendant; being mindful of Alternative Dispute Resolution (ADR) and other litigation strategies to quickly resolve disputes is still important.

We would therefore always recommend, if you find yourself seeking to enforce your IP rights, or defending a claim brought against you, that you seek the advice of an experience IP solicitor without delay.

What about higher value claims?

For IP claims above £500,000, they can still be pursued, but they are dealt with in the Chancery Division of the High Court (without the above costs caps).

And smaller claims?

For claims below £10,000 in value, IPEC has its own Small Claims court, which can determine the following claims:

• • copyright
  • trade marks
  • passing off
  • unregistered design rights
  • breach of confidence

However, you should be aware that the standard costs rule in the IPEC Small Claims court is that each side bears its own costs regardless of outcome; it is therefore a court designed to be used without a lawyer.

On the face of it, as legal costs are not recoverable, it may not make commercial sense to instruct a law firm such as Saunders Law to pursue/defend a Small Claim, however we still assist some clients, either with initial advice (which they use to support their litigation), and/or we provide ad-hoc advice from time to time throughout a claim.

Not every decision to litigate or defend a claim is a purely commercial one, to be determined by a direct cost/benefit analysis at that time; we understand that sometimes there are overarching strategic reasons to pursue a course of action (and be publicly seen to do so) where legal costs exceed the value of the particular claim and/or are not recoverable, and we are able to also assist in those cases.

We Can Help

Whether it is a claim in IPEC (Small Claim or otherwise) or something higher in value, in the High Court, we have the experience of acting in such cases, and we are able to assist without delay.

If you would like to discuss this further, please contact our team today.