9.9 The Intellectual Property Enterprise Court
Reference was made in Section 184.108.40.206 above to the specialist list in the Chancery division of the High Court known as IPEC. This section is focused on the differences in procedure between IPEC and the Patents Court.
IPEC was created on October 1, 2013, reforming the preexisting Patents County Court system. IPEC was established to handle smaller, shorter, less-complex or lower-value intellectual property actions, including patents cases.164 It aims to provide cheaper, speedier and more informal procedures than the Patents Court and to safeguard parties from the risk of paying large sums in costs to the opposing party at the conclusion of the proceedings.
A key feature of litigation in IPEC is active judicial case management, which is carried out using a cost–benefit approach. Parties are required to identify the issues to be determined and the steps necessary to resolve them at an early stage in the proceedings.
IPEC has a “multi-track” and a “small claims track” to differentiate claims based on their value and complexity. Only the multi-track is suitable for patents cases, and, therefore, unless expressly stated otherwise, references to IPEC in this section are to the IPEC multi-track.
The active case management of litigation in IPEC (including disclosure, evidence and trials) is managed so as to ensure that the shorter trial lengths are achieved and that the litigation can be conducted at a more proportionate cost.
IPEC only hears cases relating to intellectual property. This includes disputes, such as contractual claims, that involve matters other than intellectual property, but only if associated with an intellectual property claim. Trials in IPEC should last no more than two days (or, at the most, three days).
In IPEC, any claim for damages (or an account of profits) cannot exceed GBP 500,000,165 although this limit can be waived by agreement between the parties.166 As explained in more detail below in Section 9.9.12, proceedings in IPEC are subject to a costs cap of GBP 60,000 (with very limited exceptions).
All the remedies (including interim remedies) available in the Patents Court are available in IPEC. As in the Patents Court, procedure in IPEC is governed by the CPR. Part 63(V) and Practice Direction 63 relate to all proceedings started in (or transferred into) IPEC. The costs provisions are set out in Part 45(IV) and Practice Direction 45.
As noted earlier, IPEC has its own dedicated court guide, the IPEC Guide, which, as with the Patents Court Guide, is to be read in conjunction with the Chancery Guide.167
The majority of cases in IPEC are managed and heard by the presiding judge of IPEC. This de facto docketing of cases facilitates the active case management of the proceedings by the court.
220.127.116.11 Location and type of hearing
IPEC is located in the Rolls Building, London. IPEC trials can be heard outside London, particularly where this would save costs and is agreed between the parties. Prior to the COVID-19 pandemic, all other hearings (including CMCs) would not be heard outside London, as this would typically have been impractical for a short hearing. However, following feedback from IPEC users in respect of the use of videoconferences for all hearings (including trials) during the pandemic, it is anticipated that the default position will be for all hearings (other than trials) to take place by videoconference and for trials to take place as in-person hearings.
Solicitors and patent attorneys are entitled to represent clients in IPEC. They can do this themselves or additionally instruct barristers to help prepare and argue the case in court. Parties may also appear as litigants in person.
As in the Patents Court, there is no specific pre-action protocol for litigation in IPEC, and the “Pre-action Conduct and Protocols” practice direction168 applies. Defendants in an IPEC case are expected to respond within 14 days, except in exceptional circumstances.
The claimant will choose whether it issues its claim in the Patents Court or IPEC, and this will be specified in the claim form.
A defendant sued in the Patents Court is entitled to apply to have the case transferred to IPEC and vice versa.169 If the parties agree that the case should be transferred, it still requires the approval of a judge in the court in which the case is currently listed, but it is likely to be granted. If there is no agreement, an application to transfer must be made. This should be done, at the latest, at the CMC.
The following factors are relevant in determining whether a claim should be transferred into or out of IPEC:
- the financial resources of the parties;
- the overall complexity of the claim;
- the nature of the evidence; and
- the value of the claim.170
9.9.4 Statements of case
18.104.22.168 The pleadings
Statements of case in IPEC are more detailed than those in the Patents Court. IPEC statements of case must set out concisely all the facts and arguments upon which the party serving the statement relies.171 This requires all relevant facts and arguments to be included in the statement of the case but concisely and at an appropriate level of detail. The CMC in IPEC (see Section 22.214.171.124) is conducted on an issue-by-issue basis, and the parties and court need to know all of the issues for the conference. This is explained in the IPEC Guide in the following terms:
Part 63 rule 20(1) requires that a statement of case in IPEC must set out concisely all the facts and arguments upon which the party serving the statement relies. This is sometimes misunderstood. All relevant facts and arguments must be stated. But they should not be set out in a manner which includes every detail. There will be an opportunity by the time of the trial to explain to the court everything that matters. A good approach is to make the statement of case as concise as is possible, while considering whether any argument proposed to be run at trial and the basis for it will come as a surprise to an opponent who has read the statement of case. If not, the statement of case has probably been drafted in sufficient detail.
- A statement of case alleging infringement of a patent must (a) state which of the claims are alleged to be infringed and (b) give at least one example of the defendant’s infringing product or process.
- A statement of case alleging that a patent is invalid must specify the grounds on which the validity of the patent is challenged, including any challenge to a priority date. All prior art relied on must be specified and a copy of each item of prior art must be attached to the pleading. If it is alleged that a patent does not disclose the invention clearly and completely enough for it to be performed, the pleading must state which aspects of the invention cannot be made to work and in which respects the invention cannot be made to work.
- A statement of case served in response to an allegation that the patent is invalid must state which claims are said to be independently valid.172
The active case management of litigation in IPEC requires the parties to identify, before the CMC (insofar as these have not already been articulated in the parties’ statements of case), (i) which claims are in issue, (ii) what they understand to be the inventive concept of those claims, (iii) the facts that are said to be relevant common general knowledge and (iv) the nature and characteristics of the skilled person should be identified.
The parties should bear in mind that, at the CMC, the court may require the number of claims in issue to be reduced, so consideration should be given to which claim is or which claims are most important to the party’s case. In most cases, the court will not allow a patentee to rely on more than three claims that are alleged to be independently valid and infringed. The patentee should create a suitable chart, diagram or other document stating which integers of the claim are embodied in the allegedly infringing product or are incorporated in the allegedly infringing process. Similarly, a party alleging that a patent is invalid because it lacks novelty or inventive step over prior art should create an appropriate document identifying which integers of the claim are present in the pleaded prior art. A party alleging invalidity is unlikely to be permitted to rely on more than three prior art citations. Insofar as these documents have not been produced as part of the statements of case, they must be produced before the CMC at the latest.
Statements of case in IPEC must be verified with a statement of truth signed by a person with knowledge of the facts alleged or, if no one person has knowledge of all the facts, by persons who between them have knowledge of all the facts alleged.173
Given the additional content to be included in statements of case, the timelines for filing a defense and subsequent statements of case are slightly different in IPEC. There is an additional requirement in IPEC that the particulars of claim must confirm whether or not paragraph 6 of the “Pre-action Conduct and Protocols” practice direction has been complied with.174
If no acknowledgment of service has been filed, the period for filing the defense is 14 days after service of the particulars of claim.175 If an acknowledgment of service has been filed, then the time limit for filing the defense is 42 days (if the particulars of claim confirm that paragraph 6 of the “Pre-action Conduct and Protocols” practice direction has been complied with)176 or 72 days (if it does not).177
A party’s defense (and counterclaim) must be served on every other party. The CPR does not specify a time limit for serving the counterclaim, but the IPEC Guide states that this should be done at the same time as filing the defense, and undue delay may carry adverse consequences in costs.178
A party’s reply (and reply and defense to counterclaim) must be filed and served on all other parties within 28 days of the service of the defense.179 If a party chooses to serve a reply to the defense to counterclaim, this must be both filed and served 14 days from the service of the defense to counterclaim.180
The time limits for service of statements of case in IPEC cannot be extended without the prior consent of the court.181 An application for an extension of time must be made before the expiry of the relevant period and should set out good reasons why the extension is required. Such applications are typically dealt with without a hearing.
9.9.5 Early case management and preliminary measures
126.96.36.199 Interim applications
All interim remedies available in the Patents Court (interim injunctions, search and seizure and asset-freezing orders, security for costs etc.) are available in IPEC.
An application to the court, including an application for judgment in default, is made according to the procedure set out in CPR 63.25.182 Once served with an application, the respondent must file and serve its response on all relevant parties within five working days.183 If the parties cannot resolve the application by agreement, having seen the respondent’s response, the applicant will contact the court and arrange a hearing.
If five working days elapse and the respondent has done nothing, the applicant is entitled to ask the court to make the order sought without further delay.
Applications for urgent relief (including interim injunctions) should be made by filing an application notice in the usual way. Once served, the applicant should contact the judge’s clerk, who will find a date for the hearing that is appropriate to the urgency of the matter and, if possible, is convenient to all parties. In cases of extreme urgency, an application may be made without an application notice. This is done by contacting the clerk to IPEC. No such application will be entertained unless the judge is given very good reason why the matter is extremely urgent.
The court will always fix a date and time for hearings appropriate to the urgency of the application, which may mean that the application will be heard by a judge other than the presiding judge. The convenience of the parties and their advisers will be taken into account but will not be of paramount importance. As explained above in Section 188.8.131.52, post-COVID-19, the default position will be that all applications will be heard by videoconference unless there are good reasons why an in-person hearing is necessary.
Costs of applications are subject to a stage cap and assessed at the end of the trial unless a party has behaved unreasonably, in which case the costs can be assessed at the conclusion of the hearing184 and will not count to the overall cap.185
184.108.40.206 Expression of a preliminary, nonbinding opinion on the merits
In appropriate circumstances, and where all parties agree, IPEC can express a preliminary and nonbinding opinion on the merits of the case (an “early neutral evaluation”). A request for such an opinion should be made in advance of the CMC so that the court may consider whether it is appropriate.
220.127.116.11 Case management
The CMC is an important hearing at which the court will determine how to progress the matter to trial in an efficient and proportionate manner. The court will identify the issues of law and fact to be resolved at the trial186 and the extent to which disclosure (including the provision of a product and process description), experiments, evidence (factual and expert), cross-examination and written submissions are necessary for the fair determination of the dispute.187 Any order permitting one or more of these steps will only be made in relation to specific and identified issues188 and only where the court is satisfied that the benefit of the step (in terms of its value in resolving the relevant issue) appears likely to justify the cost of producing and dealing with it.189
Only specific disclosure (i.e., disclosure of particular documents or classes of documents) is available in IPEC and will typically be limited to one or more of the issues identified at the CMC.
The procedure for disclosure under Practice Direction 57AD of the CPR does not apply in IPEC, although litigants will be expected to disclose all known adverse documents, whether or not an order for disclosure is made at the CMC.190
A party’s statement of case can stand as evidence at trial. If it is necessary, additional evidence in the form of witness statements can be directed at the CMC. The court will typically seek to control fact evidence by limiting the issues to which it can be directed, the number of witnesses and the length of their statements.
Similar case management applies to expert evidence. If expert evidence is permitted at all, only where it is clearly shown that different and distinct areas of expertise are relevant to the issues at trial will more than one expert per party be allowed. Experts in IPEC are subject to the same obligations as those in the Patents Court. Although “in-house” experts are more common to satisfy the cost–benefit test, those experts are still required to act independently and in compliance with their obligations and duties as an expert.
9.9.8 Pretrial review
Pretrial reviews do not usually take place in IPEC.
18.104.22.168 Trial length, format and timetable
IPEC trials should last no more than two days (or at the most three days). As explained above in Section 22.214.171.124, it is anticipated that, post-COVID-19, trials will take place in person.
The court controls the conduct of the trials to ensure that the trial estimate is achieved. The parties are required to file a timetable for the conduct of the trial in advance, and, once approved by the court, this timetable is likely to be enforced strictly. Unless there is good reason not to, the court will allocate equal time to the parties.
Opening speeches, if necessary at all, are likely to be short, and, if the parties have prepared written skeleton arguments in advance of trial, it is not uncommon to proceed straight to the evidence. Unlike in the Patents Court, parties are usually not permitted to put documents to the witnesses (including expert witnesses) that are not already in the case.191 Also unlike in the Patents Court, trials in IPEC do not usually allow for time to prepare written submissions after the evidence, and closing arguments will usually follow immediately after the conclusion of the evidence.
In an appropriate case, and if the parties consent, the trial may be conducted on paper (i.e., there is no hearing). The judgment is delivered in the usual way once the judge has read the papers.
As in the Patents Court, many trial judgments will be reserved and handed down at a later date. The parties’ legal representatives (or litigants in person) will be provided with a copy of the draft judgment in advance of the date of handing down so that they may notify the court of typographical and obvious errors (if any). The judgment following a trial on the papers is delivered in the usual way once the judge has read the papers.
The text may be shown, in confidence, to the parties, but only for the purpose of obtaining instructions and on the strict understanding that the judgment, and its effect, are not to be disclosed to any other person or used in the public domain and that no action is to be taken (other than internally) in response to the judgment. If the parties prefer not to be shown the draft judgment on this basis, they should inform the court at the time the judgment is reserved.
9.9.11 The consequentials hearing
There will often be a hearing after the judgment has been handed down to finalize the order to be made in consequence of the judgment. This may be immediately after the judgment is handed down or may be at a later date.
Where the parties are agreed as to the consequential order and have supplied to the judge a copy signed by all parties or their representatives, no hearing will be necessary.
Subject to some very limited exceptions192 costs orders in IPEC are subject to a costs cap. The court will not order a party to pay total costs of more than GBP 60,000 on the final determination of a claim in relation to liability193 and no more than GBP 25,000 on an inquiry as to damages or an account of profits.194 In addition to these overall caps, various stage caps are also applied, capping the costs recoverable for each stage of the litigation.195
In IPEC, all costs (other than the costs of an interim hearing in which a party is held to have behaved unreasonably)196 are summarily assessed after trial. The party seeking its costs will submit a detailed summary of its costs broken down into the relevant stages. The court assesses the parties’ actual costs for each stage and applies any appropriate deduction at this stage. The resulting figure is compared with the cap for that stage, and the party receives the lower of the two. The various subtotals for each stage are summed, and the party will receive that sum subject to the overall cap.197 As costs are assessed summarily, there is no need to award an interim payment on account. There is no requirement for costs budgets in IPEC.
All the remedies available in the Patents Court following trial are available in IPEC (final injunctions, declarations of noninfringement, certificates of contested validity, orders for the payment of damages or an account of profits, orders requiring the dissemination of a judgment, Arrow declarations etc.).
An order of IPEC (whether made following an application or trial) may be appealed. All appeals go to the Court of Appeal.198 No party has an absolute right to appeal; permission must be obtained. Permission to appeal may (and generally should) be sought from the judge who made the order. If the judge refuses to give permission, the party may instead seek permission from the Court of Appeal.
There is no automatic capping of costs in the Court of Appeal. An appellant who wishes to have the appeal costs capped should apply to the Court of Appeal as soon as is practicable. The Court of Appeal has the discretion to make an order limiting the costs that a successful party may recover from the unsuccessful party on appeal.199 The discretion will be exercised with regard to the means of both parties, all the circumstances of the case and the need to facilitate access to justice.