The rules governing costs in the UK’s Intellectual Property Enterprise Court (IPEC) have been updated for the first time since the birth of IPEC in 2013. In this blog post we look at what has changed, and what the changes actually mean for would-be claimants.
What is IPEC and who is it for?
IPEC is a speciality court (within the Chancery Division of the High Court) that can hear cases relating to broad range of Intellectual Property disputes. Cases in IPEC multi-track are presided over by a specialist IP Judge and are tightly managed. Many of the principles enshrined within IPEC procedure (including the active use of case management conferences, limited disclosure, and shorter trials) set the tone for developments in Civil Procedure over the last decade.
IPEC was designed as a cost-efficient forum where IP cases are heard quickly and efficiently. Cases within IPEC are usually heard – from start to finish – in under a year. Total damages and recoverable costs are also capped from the outset, and this is a key feature that provides parties with certainty on costs and encourages access to justice. However, this does not mean that IPEC is reserved for litigants-in-person. In just the past few years claimants before IPEC have included Easygroup Ltd, Twentieth Century Fox, and Match Group.
Ultimately, for many of the larger companies that use the IPEC, its key benefit is the ability to obtain final injunctive relief on an expedited timetable.
What has changed?
On 1 October 2022, the cost caps at the heart of IPEC procedure were updated. The total cap on recoverable costs is now £60,000 for a final determination on liability (up from £50,000), and £30,000 for a determination on quantum (up from £25,000). These caps – which include VAT – are also subject to separate caps at each stage of the proceedings. The cap on total damages, however, remains unchanged at £500,000.
The rationale behind the cost caps is to encourage rights holders to pursue claims in IPEC and not face exorbitant costs claims if they are unsuccessful. This cap is widely seen as one of the major successes within the IPEC regime, and so this increase is important to ensure that claimants are still able to access the court, and that there will continue to be an appetite amongst litigants and lawyers to use the IPEC to enforce IP rights.
The increase in recoverable costs is hardly game-changing. In fact, because the caps were set in 2010 (under the IPEC’s forerunner, the Patents County Court), the increases do not even track inflation. This means that, in real terms, IPEC still operates a restrictive costs regime and the difference between the costs and damages awarded at IPEC and those awarded in other courts continues to be stark. In that sense, these relatively small increases in the costs cap are in keeping with the very rationale behind it; the cap remains a robust safeguard that protects parties from the risk of paying large sums of money to the opposing party at the conclusion of proceedings.
Indeed, the number of reported cases at IPEC has remained broadly static year-on-year over the last decade, and so there is no obvious indication that claimants have been deterred by the inflation-defying cost caps.
IPEC is likely to remain a popular choice, both for smaller disputes and for companies seeking a speedier route to final injunctive relief. It should also be remembered that costs caps concern recoverable costs and, in practice, larger companies are willing to absorb higher irrevocable costs in more complicated matters because of the efficiency and speed of the IPEC process. For individuals and smaller companies, the fact that cap has remained modest will be significant and ensures that IPEC will continue to provide access to justice for a broad range of claimants.