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IPEC small claims track

The Intellectual Property Enterprise Court (“IPEC”) small claims track enables SMEs & individuals to enforce intellectual property rights. The IPEC small claims track is designed to be faster and cheaper than other routes in IPEC or the High Court. 

We explain below a quick overview of the IPEC small claims track and how it could work to help you.  We look at:

Scope of the IPEC small claims track

The small claims track reduces the costs and speed of resolving claims for up to £10,000. The procedure is more informal. Legal costs are not recovered, other than Court fees incurred which can be recovered by the winner. This is a useful route for SMEs and individuals to enforce their intellectual property rights, when they might otherwise be deterred by the cost.

Larger businesses also use the IPEC to enforce their intellectual property rights, if their claim’s value does not justify the expense of High Court proceedings.

Claims filed at IPEC can be withdrawn easily if the case settles.  The vast majority of cases do settle before reaching IPEC or during proceedings.

Nature of claims heard at IPEC

The IPEC court is specialist and can handle the full range of intellectual property disputes ranging from:

  • Design right infringement;
  • Trade mark infringement;
  • Copyright infringement;
  • Patent infringement; and
  • Infringement of unregistered marks and passing off actions.

Powers of IPEC

IPEC can issue a full range of orders such as:

  • Security for costs – this means that your opponent is ordered to deposit money into court to cover your likely legal fees.
  • Undertakings – the parties promise to take agreed steps.  For example, to refrain from misusing copyright in software;
  • Injunctions – the court orders that your opponent must refrain from actions – usually the sale of goods which infringe intellectual property rights; and/or
  • Damages – basically restitution of lost profits.

Letters before action

You should send a letter to the other side before commencing litigation in IPEC – known as a letter before action. Letters before action are a requirement under the IPEC rules.  A letter before action is part of the push applicable in all courts to settle intellectual property infringement disputes outside of court.

The benefits of a letter before action

  • The letter before action will set out your case, and identify the matters in dispute – provides clarity.
  • The letter before action will give the other party a chance to settle the case within a set time frame – sets a timeframe.
  • The letter before action will show the court that you have attempted to settle the case without litigation. This will help to protect your position when it comes to awards of costs that may be made by IPEC.

IPEC small claims appeals

The decision made by the Judges sitting in IPEC could be appealed and heard by the Court of Appeal. The Court of Appeal is located on The Strand in London. Once the final order is made by the Judge in the IPEC, the appeal hearing is scheduled in the Court of Appeal’s diary.

Prior to the hearing, a skeleton argument is prepared and submitted to the appeal Judges (known as Lords Justices). The Court of Appeal would not examine the facts but will mainly examine the application on the accuracy of the ‘points of law’ applied in the first instance decision.

Timing at the Court of Appeal

The Court of Appeal usually could take between 4-8 weeks to give its decision in a written judgement after the appeal hearing had taken place.

Appeal from the Court of Appeal on IP infringement matters

A decision from the Court of Appeal could be appealed in the Supreme Court. Permission from the judge making this order must be sought before a decision is appealed in the Supreme Court.

The legal costs of any appeal (both to the Court of Appeal and the Supreme Court) are awarded to the winning party on the principle of ‘loser pays’. There is no cap (as in IPEC) on the level of costs that the loser of an appeal may be awarded to pay.

IPEC small claims track appeal judgement

The judge will normally schedule a date to formally hand down his judgement after which a judgement becomes a public document. Prior to this, a draft of the final judgement, under strict confidentiality, is issued to both parties with a request for any corrections.

There may then be a further hearing for the Judge to rule upon the practical consequences of his legal judgment, i.e. if a patent or trademark is found to be invalid, the Judge will issue an order that the relevant intellectual property right(s) should be revoked. If an intellectual property right is ruled to have been infringed, the Judge will have to consider what remedies to award the owner(s). The Judge will then also rule upon any award of legal costs.

Always consider resolving the intellectual property dispute outside of IPEC

Whilst the IPEC small claims track is designed to be nimble, in most cases, the best advice is to consider settlement of the IP dispute.  We often solve cases where claims have been made at IPEC before the full hearing.  We are discrete and do work in the back ground to shape and steer the case onto the right track.

Himanshu Dasare is a member of our IP group.  Himanshu is a specialist IP solicitor bringing years of experience in dealing with commercial problems and working to find the solution.

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