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From the Newsdesk

Intellectual Property Enterprise Court (IPEC) Recoverable Costs Increased for the First Time in 12 Years

It is heartening to see that the Intellectual Property Enterprise Court (“IPEC”) has recognised that its cap on costs recoverable in IP cases were in need of review.  The IPEC, which is probably the most ‘user friendly’ Court in the English justice system, exists to address the needs of lone, micro and SME businesses in the world of IP litigation, which was formerly prohibitively expensive.  However, costs caps had remained unchanged since they were introduced in 2010. (A costs cap means there is a limitation on the amount paid to another party’s costs in connection with any stage of the proceedings).

Proceedings in IPEC – a specialist Court and part of the Business and Property Courts of the High Court of Justice aimed at lower-value (i.e. under £500k) disputes, have always been intended to be streamlined.  The Court has also recently directed that the default position on hearings other than full trials is that they are held remotely, so the parties no longer need to travel to attend Court on shorter hearings. Parties can even apply for hearings to be conducted by telephone. This is a significant step forward.

The limit of costs that a successful party in IPEC proceedings could recover from its unsuccessful opponent was previously £50,000 on a liability trial.  The Court has now increased that figure to £60,000.  Likewise, the maximum costs awarded on proceedings to assess the value of the successful claim (an inquiry as to damages or account of profits) have been increased from £25,000 to £30,000.  Accordingly, the maximum sums recoverable for each individual stage of a claim have been increased as follows:-

Proceedings to determine liability

Stage of a claimMaximum amount of costs 
Particulars of claim£9,000 
Defence and counterclaim£8,000 
Reply and defence to counterclaim£7,000 
Reply to defence to counterclaim£3,500 
Attendance at a case management conference£6,000 
Making or responding to an application£4,000 
Providing or inspecting disclosure or product/process description£6,000 
Performing or inspecting experiments£3,000 
Preparing witness statements£8,000 
Preparing experts’ report£9,000 
Preparing for and attending trial and judgment£20,000 
Preparing for determination on the papers£5,500

Proceedings to assess damages or account of profits

Stage of a claimMaximum amount of costs
Points of claim£4,000
Points of defence£4,000
Attendance at a case management conference£5,000
Making or responding to an application£3,000
Providing or inspecting disclosure£3,000
Preparing witness statements£6,000
Preparing experts’ report£7,000
Preparing for and attending trial and judgment£10,000
Preparing for determination on the papers£3,000

Dids Macdonald OBE., CEO of ACID said, “The increase in recoverable costs has arguably not gone far enough but it is a step in the right direction. It is important to note that taking legal action doesn’t necessarily mean going all the way to a final Court Hearing which, despite improvements is still an expensive business. So often a carefully created Cease & Design letter, including all the evidence to substantiate a claim of infringement, can be a shot across the bows to achieve an early settlement.”

The review has also failed to correct an anomaly, because the recoverable figures include VAT: thus a litigant who is not registered for VAT has to pay the VAT on his solicitors’ fees whereas a VAT-registered litigant can recover it – thus disadvantaging the smaller litigant. That said, the other side to the coin is that the risk element for the opponent’s costs is now fixed at £60,000, which can be budgeted for and (in some circumstances) covered by an insurance policy. 

For guidance on proceedings in the Intellectual Property Enterprise Court and on IP rights generally contact ACID Legal Affiliate Tony Catterall, Head of Taylors’ IP Team on 01254 297900 or via email at [email protected]

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