IP litigation strategy

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IP litigation strategy

In the world of intellectual property the windows of opportunity can be overtaken quickly. Generally litigation is best avoided and settlement is encouraged. But, sometimes an intellectual property litigation strategy is needed for the path to resolution.  We build you your strategy.

Our clients range from small SMEs to larger businesses many of whom trade overseas.  We are flexible enough to adapt to the case in hand and are cost proportionate being boutique and specialist. We have dealt with a range of sectors but have specialist knowledge of patents, brands, retail and technology.

Intellectual property litigation strategy

The threat of intellectual property litigation often brings parties to the negotiating table. Over the years we have found the following approach to be effective in providing the solutions to resolving intellectual property infringement disputes.

Legal fee funding for intellectual property infringement cases

We will always look at the most appropriate litigation funding structure for your case. In particular, we offer:

  • Flexible billing arrangements as an alternative to invoicing time at hourly rates;
  • DBA’s (“Damage Based Agreements”) for a small number of cases. This is where we take a fixed percentage of any damages recovered, capped at a maximum recovery of 50 per cent of damages;
  • Negotiated fixed fees for pre-litigation preparatory work and, once litigation starts, for certain stages of the litigation process; or
  • CFA’s (“Conditional Fee Arrangements”) for a small number of matters on a case-by-case basis. Our offer is based on our assessment on the merits of a claim and the likelihood of recoverability of costs.

Litigation strategy steps we take you through

The steps we usually work through to encourage a quick solution are broadly as follows:

  • Take a hard and honest review of the evidence of infringement – if your case is weak we recommend you face facts early. This may mean a change to the intellectual property litigation strategy..
  • Pinpointing the commercial levers likely to encourage settlement.
  • Plan a road map setting out the timetable for the case to reach a full court hearing. The road map forms the basis of the case plan and tactics.
  • Maintain focused and concise without prejudice discussions. Experience tells us that keeping the pressure up, showing determination and presenting a well argued case can push the other side into retreat more quickly. You will need to get past the “try it on” stage first.
  • Reminder that attempts to settle are not a sign of weakness. It shows commercial acumen.

Using a litigation strategy to achieve results

IPEC along with other courts encourages the parties to seek ways to resolve disputes outside of court. If you arrive at any court without being able to demonstrate attempts to resolve the problem you risk an order to pay the opponent’s legal costs.  Orders for legal costs can be made even if you are successful on the substantive claim.

Reason for speed

Many intellectual property infringement claims are lodged at court.  But, many claims do not make it all the way to a full court hearing.  This is because the claims are settled and withdrawn before the hearing date.  Intellectual property can lose its currency very quickly.

You will usually need therefore to find quicker ways of resolving intellectual property infringement claims than court action.

Timing for resolution of intellectual property infringement claims

We find that early settlement before the case reaches court is more easily achieved by:

  • Practical negotiation;
  • Mediation if negotiation is not advancing the case quickly;
  • Use of experts to encourage a reality check.

Practical negotiation

You need someone who has dealt with settlements as that tends to promote fluency. Preparation is needed to build the tactics on which negotiations are planned.  We anticipate arguments before they are made and rehearse. It is likely that we will have dealt with similar situations before and will use that experience to your advantage.

Mediation as part of the intellectual property litigation strategy

For most issues taken to court, litigation is a win-lose paradigm. Alternative dispute resolution enables you to explore creative win-win solutions. One form of alternative dispute resolution is mediation.

Benefits of mediation

The courts encourage parties to consider mediation as it offers the following advantages:

  • Cost and time savings;
  • An opportunity to negotiate a settlement agreement;
  • An opportunity to conduct the matter in private. The outcome of the matter can be kept private and confidential, which most companies find beneficial.

Example of how mediation can be used successfully

Mediation can throw up some surprising solutions.  For example, the copyright owner of software could agree to cease intellectual property litigation if the infringer pays compensation and agrees to a licence agreement to regulate future affairs. This way, the infringer will still be able to use the copyright, but it will also ensure that the owner is not losing revenue as they can monitor how their software copyright is being used.  In a court case this may not be possible and the judge cannot order such a resolution.

Using experts to help resolve intellectual property disputes

Instructing an expert or a joint expert from the start can help resolve intellectual property disputes. Experts are commonly party of any intellectual property litigation strategy. An impartial view can help both parties understand the issues in disputes.

Benefits of an intellectual property expert’s evidence

Using intellectual property expert evidence has the following advantages:

  • Paves the way for settlement – it will allow the other part to see a different point of view
  • Maintains the business relationship
  • Quicker than going to court
  • Less costly than court procedure

Intellectual Property Enterprise Court – IPEC

The Intellectual Property Enterprise Court has been set up especially for the enforcement and protection of intellectual property assets. To use IPEC to its maximum advantage you need to know the rules and procedures of IPEC which is where we step in.

The advantages of using the IPEC compared to other courts such as the High Court include:

Speed

Cases are usually dealt with within a year. This is a lot shorter compared to the High Court which usually takes around 2 or 3 years.

Cost

The process in the IPEC is more strictly managed. Hearings last a maximum of 2 days therefore costs are a lot less compared to the High Court. Costs in the IPEC usually range from around £5,000 to £150,000 depending on the complexity of the IP dispute. It is not uncommon for costs in the High Court to reach £500,000.

Jurisdiction

The IPEC can make decision over community IP rights such as community design rights. They can also order a pan-European injunction.

Lower financial risk

In respect of liability, there is an overall cap of £50,000 on the amount of costs the losing party can be ordered to pay to the winner. In respect of account of profits, there is a further cap of £25,000. The maximum amount of damages and/or account of profits that can be claimed is limited to £500,000.

Specialism

Cases in the IPEC are heard by judges who specialise in IP disputes.

Active case management

This minimises frustrating tactics from the other side.

Wide scope at IPEC

The IPEC has jurisdiction over all intellectual property rights including:

  • Patents;
  • Designs;
  • Trade marks;
  • Copyright; and
  • Other intellectual property rights.

Focus

One tactic to encourage resolution of the IP dispute, is to file a claim in IPEC to focus the minds and establish a timetable.

Appeals from IPEC

Appeals from IPEC are made to either:

  • The Court of Appeal
  • The Chancery Division of the High Court.

Litigation strategy outside of IPEC

IPEC is not always the best court to handle intellectual property infringement.  You should consider the merits of using other courts before proceeding.  The following factors can be indicators that the claim is not suitable for the IPEC:

Complexity

The IPEC does not deal with extremely complex claims. A claim would be considered as complex if it involves, substantive cross examination of witnesses and experts and a trial that would last longer than 2 days.

Costs

Costs at the IPEC are capped. If due to the nature and complexity of the action, legal costs are likely to exceed £50,000 then it would not be suitable for the IPEC.

Value

If the likely damage and/or account of profits will exceed £500,000 it is better suited for the High Court.

Intellectual property litigation strategy – recent cases

Most of our cases settle before they reach the IPEC. Where negotiations fail, which is very rare, we bring and defend intellectual property rights disputes in the IPEC. We have:

  • Used an IPEC claim as a catalyst for settlement where our client possessed design right documentation recording originality of merchandise. Our client settled the matter and subsequently granted a licence to the infringer for the design right’s use – stimulating future exploitation and gaining a revenue stream.
  • Obtained an immediate interim prohibitory injunction on behalf of a registered trade mark holder in toy distribution markets to prevent detriments to the holder’s goodwill and market share. The interim injunction was necessary in order to stop haemorrhaging of profits.
  • Defended claims of trade mark and passing off infringements on behalf of a household publishing company. We successfully resisted the action and succeeded on a counterclaim for trade mark invalidation on the ground that the registered trade mark was not validly registered.

We understand what drives intellectual property disputes and litigation. We use our market know-how to give you leverage over your opponent. We use court rules and procedures to your advantage and where possible seek settlement. We can help you tackle the fast moving world.