From 1 January 2024, parties will benefit from a 3-year pilot scheme, which provides for capped costs when engaged in patent disputes before the Patents Court.
Historically, some patent owners and some accused of patent infringement have been reluctant to litigate their patent disputes before the courts in this country, due to the fear of losing and having to pay uncapped, open-ended legal costs to the winner, which often can be in excess of £1m.
Until now, the only solution to this problem in this country has been to litigate patent disputes in the Intellectual Property Enterprise Court (IPEC), where legal costs awards for first instance decisions on liability are capped at £60,000 and £30,000 for any subsequent inquiry as to damages or account of profits. However, many patent cases are not suitable for hearing in the IPEC due to their complexity, requiring a trial of longer than 2 or 3 days.
From 1 January 2024, a further option will be available. As a result of Practice Direction 51ZD, parties will continue to be able to engage in patent disputes before the Patents Court, whilst benefiting from a 3-year pilot scheme which provides for capped costs.
The aim of the pilot scheme is to improve access to the Patents Court for litigants with cases which are less complex and less valuable, but for which the IPEC is not appropriate, primarily through streamlining the procedures of the Patents Court using the pre-existing Shorter Trial Scheme.
The new system, which caps costs at £500,000 for the first instance determination of a claim in relation to liability and £250,000 for any subsequent inquiry as to damages or account of profits, but has no limit on the amount of damages which can be awarded, is ideally suited for mid-tier cases which require a trial of no more than 4 days.
The pilot scheme will no doubt be welcomed by many SMEs, who will now have much greater certainty as to their costs exposure before embarking on patent litigation before the courts of this country.
For more information, please contact Carl Steele.