Sunday, 23 February 2014

A Patent is Essentially a Right to Bring a Law Suit

That was the message that I hammered home when I spoke to Ideas North West  at The Globe Centre in Accrington on the 16 Jan 2014. If someone steals your car or handbag you can complain to the police and if they catch the villain the Crown may prosecute him. However, if someone infringes your patent or most other intellectual property rights you have to sue him in the civil courts.

Until April 2002 legal aid was available for intellectual property infringement claims but paragraph 1 (h) of Schedule 2 to the Access to Justice Act 1999 scuppered that. A report by the Intellectual Property Advisory Committee in 2003 showed that the UK was one of the most expensive countries in the world in which to litigate. It found that the average cost of a patent infringement claim in the High Court was £1 million and between £150,000 and £250,000 in the Patents County Court compared to 30,000 to 50,000 euros in France, 50,000 euros in Germany and 10,000 to 40,000 euros in the Netherlands (see "The Enforcement of Patent Rights" Nov 2003). Only in the USA were costs comparable to those in this country. However, in the USA it has always been possible for lawyers to contract to provide representation in exchange for a share of any damages that may be recovered whereas that was not possible here until very recently. Also, it is unusual for the unsuccessful party to be ordered to pay the successful party's legal fees in the USA whereas that is the normal order here.

Consequently, the UK was probably the most difficult country in the world for a small or medium enterprise ("SME"). That was probably one reason why the UK has consistently trailed not just the USA, Japan, Germany and France in the number of European patent applications but even the Netherlands with a third of our population and Switzerland with one eighth (for the figures between 2002 and 2007 see my articler "Why IP Yorkshire?" 10 Sep 2008 IP Yorkshire).

Both Gowers and Hargreaves spotted the cost of enforcement of intellectual property rights and a significant disincentive to research and development and both this government and the last have taken steps to reduce the cost of dispute resolution. S.13 of the Patents Act 1977 inserted s.74A and s.74B into the Patents Act 1977 which enables patent examiners to give non-binding opinions on whether a patent is valid or whether it was been infringed. Amendments to Part 63 of the Civil Procedure Rules in October 2010 enabled the Patents County Court to reduce the cost of litigation and limited the costs that can be recovered from the other side to £50,000 in most cases. In October 2012 a new small claims track was established in the Patents County Court for claims up to £10,000. Finally, in October 2013 the Patents County Court was replaced by the Intellectual Property Enterprise Court which is part of the Chancery Division but otherwise operates in exactly the same way as its predecessor.

Another development which should reduce the cost of enforcement for small and medium enterprises will be the new unitary or unified patent. This will be a European patent granted by the European Patent Office for all the member states of the European Union except Spain and Italy as though they were one country. Disputes over validity and infringement will be referred to a Unified Patent Court which will sit in Paris with sections in London and Munich.

I discussed all those developments and other matters in my paper "How to enforce your Intellectual Property Rights without going bust":



How to Enforce your Intellectual Property Rights without Going Bust from Jane Lambert

Of course, for most independent inventors, start-ups and other small businesses even £50,000 is a lot more than they can afford but there are now some insurance products that can minimize that expense and risk. One of the brokers that has developed such products is Cobra Special Risks and Ian Wishart of Cobra (who is also a patent attorney) discussed them in the following paper:



IP Insurance from Ian Wishart

If anyone wants to discuss this article or patenting or IP in general they can call me on 0161 850 0080 during normal office hours or get in touch through my contact form.  Alternatively, you can tweet me, write on my wall or message me through G+, Linkedin or Xing,