If you want to take advantage of the benefits of claiming in the Patents County Court, claimants need to conduct the litigation in an appropriate manner, as demonstrated by the case of Comic Enterprises Ltd v Twentieth Century Fox which concerned Glee trademarks.  Liane Bylett in our Commercial Disputes Team considers the importance of this decision.

SMEs wanting to take advantage of the benefits of the Patents County Court must conduct themselves in a manner which is suitable for the PCC system.  This was the indication of the Court in the recent case of Comic Enterprises Ltd v Twentieth Century Fox [2012].

This builds on the recent reforms to the Patents County Court (PCC) (Click here to see our earlier article), which were aimed at increasing access to justice in respect of lower value IP litigation, particularly for SMEs. Claims issued in the PCC are subject to a streamlined procedure which is cheaper (due to a costs capping system), quicker and more informal. The intention is that SMEs are not deterred from pursuing IP disputes due to the risk of significant adverse costs awards in the High Court.

Comic Enterprises Ltd v Twentieth Century Fox [2012] – Background

Comic Enterprises Ltd runs a number of comedy clubs in England called "The Glee Club" or "The Glee Comedy Club". Comic Enterprises has owned the trademark "the glee CLUB" for classes 25 (clothing) and 41 (entertainment services and other similar services) since 1999.  Comic Enterprises issued a claim in the PCC for trademark infringement and passing off against Twentieth Century Fox, which produces the popular US TV programme "Glee".

The defendant, Twentieth Century Fox, made an application for the case to be transferred from the PCC to the High Court. The application was primarily based upon the value of the claim, which is far in excess of the £500,000 damages cap which applies to the PCC, and the complexity of the factual and legal issues. The defendant argued that if the case remained in the PCC it would involve "shoehorning this case into a two day window with the streamlined procedure of limited disclosure, cross-examination and written evidence...".

Needless to say the application was hotly contested by the claimant, Comic Enterprises Ltd. It was argued that the case should remain in the PCC because it would be fairer upon the claimant, which is an SME, and would allow it greater access to justice. The claimant was particularly concerned about the potential for significant adverse costs in the High Court, whereas the PCC cost capping system limits the claimant's adverse costs to £50,000.

Factors a court will consider for using the Patent County Court

The Court confirmed that the factors which it will consider when considering whether a case should be dealt with in the PCC are as follows:

  • Financial position of the parties;
  • Value of the claim;
  • Complexity of the issues;
  • Estimated length of trial;
  • Importance of the claim to the general public.


The Decision

Despite the claimant's status as an SME and concerns about its financial status, the Court did not feel that this was a case where the claimant would actually risk going under as a result of the costs of High Court litigation.

The deciding factor in this case was the claimant's conduct. The judge ruled that the claimant was "running this case as if it is a piece of full scale High Court litigation" because it failed to narrow the issues and refused to provide further information. The Court felt that the claimant was trying to "have its cake and eat it" by conducting the case as if it were in the High Court (rather than the streamlined procedure of the PCC) and yet still trying to take advantage of the PCC costs cap of £50,000. Accordingly the case was transferred to the High Court.

Comment

The decision in Comic Enterprises Ltd v Twentieth Century Fox makes it clear that potential claimants who wish to benefit from the costs capping system of the PCC, should conduct their cases in a manner which is appropriate for the streamlined procedure of the PCC. This includes ensuring compliance with pre-action protocols (including the exchange of information before proceedings are issued) and narrowing the factual / legal issues as far as possible. It is clear that if parties try to conduct the case as if it were full blown litigation, there is a significant risk that the Court will transfer the matter to the High Court.

This articleis provided for information purposes only and does not constitute legal advice. Professional legal advice should be obtained before taking or refraining from taking any action as a result of the contents of this document.