Sliding the Scale: The UK's New "Small Claims" Court for Intellectual Property Disputes

An often-frustrating aspect of IP law is that in relatively small matters, the cost of litigation can quickly become disproportionate to the value of the intellectual property in dispute. In other words, there is no automatic sliding scale of expenses that shifts according to the value of the IP.

That may be changing in the UK. On October 1, 2012, the UK government launched a new “small claims track” in the Patents County Court) (“PCC”), which specializes in copyright, patent and trademark matters.

The PCC “small claims track” establishes a more informal process for copyright, trademark and unregistered design claims valued at no more than £5,000 (about $8,000 US). The new process will involve informal hearings with relaxed rules of evidence. Lawyers are not required, even for corporations (which can be represented by officers), and expert evidence is discouraged (allowed only with court permission). Small claims track judges will be able to award damages and permanent injunctions (called “final injunctions” in the UK), but will not be able to award preliminary injunctive relief. Perhaps most importantly, the small claims track does not follow the general principle in the UK that the unsuccessful party pays the legal costs of the successful party (the opposite of the “American Rule”). Instead, recoverable costs and attorneys’ fees are highly restricted, limited to about £200 (about $300.00 US) and awarded only in certain circumstances.

The “small claims track” is not available for patent claims, which are subject to a £500,000 (about $800,000 US) damages limit if brought in the PCC.

The new track is touted by the government as a “smarter and cheaper process” for small businesses. For example, the HM Courts & Tribunals Service, the government body responsible for administration of UK courts, cites the example of an independent photographer whose image is reproduced without her consent. However, others have speculated that the cheaper and faster process could be a boon to record labels and film studios, allowing them a fast track to paydays in internet downloading cases. Nevertheless, by the same token, the new process should also make it easier for ordinary people to defend themselves against such claims.


DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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