IPEC small claims track

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

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 cases dealt with at IPEC

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.  There is a cap on costs recoverable from the other side if you win which is currently £50,000.  There is a cap on the maximum amount of damages and or account of profits of £500,000.

Nature of small and larger claims heard at IPEC

The IPEC court is specialist and can handle the full range of intellectual property and technology 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 for small and larger claims

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 needed for small and larger claims

Whatever the size and nature of your claim you should send a letter before action to the other side before commencing litigation in IPEC. 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.

We both draft and defend a great many letters before action.  Time is involved as to be effective the presentation of the letter before action or the defence has to be well thought out and tactical.

IPEC 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 appeal judgements

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.

Why you always try to negotiate for settlement

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.

The best advice is to use IPEC and negotiate at the same time for settlement.  We usually run the negotiations on a “without prejudice basis”. Without prejudice means offers to settle are kept secret from the IPEC judge if the case runs to IPEC as settlement was unsuccessful.

A vast number of cases never reach IPEC but the threat achieves a successful outcome.  IPEC may be nimble but it is still slow and can be expensive. Settlements can be quick and cheap. We are discrete and do work in the back ground to shape and steer the case to resolution.

Please do get in touch for an initial review on prospects of success. We do provide a fee estimate for each stage. Please call on 020 7438 1060.