Maybe we need to think again about the Chancery District Registries and County Courts

Manchester Civil Justice Centre, Wikpedia Commons

Jane Lambert

In "Success Fees and ATE Premiums in the Patents County Court: Henderson v All Around the World Recordings Ltd" 4 May 2013 NIPC Law, I blogged about Judge Birss QC's decision in Henderson v All Around the World Recordings Ltd and Another [2013] EWPCC 19 (27 March 2013) where an impecunious singer song writer who had successfully brought proceedings in the Patents County Court for infringement of her performer's rights against a major record label was allowed  £52,484.25 in costs. Had she brought her claim in the Chancery Division she might well have been awarded £232,676.20.

One of the reasons why Judge Birss QC would not allow her more was that

"a litigant who wishes to recover a reasonable proportion of the totality of his of her legal costs has a clear option available, to litigate in the High Court. In that system none of the problems now faced by the claimant would arise. I do not agree that the case would simply have been transferred to the PCC if it had been commenced in the High Court. Mr Pearson submitted that justice would not be done if I did not depart from the costs cap. That submission would have provided solid grounds for the claimant to argue in favour of keeping her case in the High Court. Indeed if it was a concern to the claimant or her legal advisers in the first place, the case should have been begun in the High Court".

His Honour added at paragraph [40]:

"To make a costs award which risks causing a winning claimant to be deprived to a significant extent of the fruits of her victory is very unwelcome. However I believe what is really happening in this case is an example of a psychological phenomenon I have become familiar with in the PCC. When the risk was in the future, the claimant wished to litigate in the Patents County Court to protect herself against the risk of an adverse costs award. That is why proceedings were brought and pursued in this court with this costs regime. The impact of the PCC cap on the claimant's actual costs if she won was predictable. If the claimant had lost, the costs cap would have been strongly relied on. The claimant was able to enforce her intellectual property rights in this case because of the predictability of the costs cap remaining in place. She was relying on it. Now that the claimant has won, the uncertainty has evaporated. The balance of risk and reward is now entirely different. In today's circumstances it now seems to the claimant quite unfair that the cap prevents her from recovering a higher share of her costs. But that is because the position after judgment is very different."

As we say in the North, "thou can't have tha cake an' ha'penny."

Now the issue in Henderson was whether the £50,000 costs cap precluded the recovery of the claimants' lawyers's success fees and after-the-event insurance premium in the Patents County Court. That is unlikely to be an issue for very much longer now that the Legal Aid Sentencing and Punishment of Offenders Act 2012 is in force for the reasons I explained in "Intellectual Property Litigation - the Funding Options" 18 April 2013 NIPClaw. There are, however, other reasons why the Patents County Court might not be right for a particular case. First, there is a £500,000 cap on the damages that can be awarded by that Court. Second, there is a 2 days time limit and a £50,000 costs cap and there are some cases that just cannot be completed within that time or for that cost. Thirdly, the Patents County Court sits in London and while I have won directions from both Judge Fysh QC and Judge Birss QC for the Court to sit in Manchester and Leeds I don't think it is unfair to say that I encountered a fair measure of judicial scepticism on both occasions. Fourthly, the Patents County Court has become very busy and its resources have failed to keep pace with its expanding workload.  So maybe it is time to think again about litigating intellectual property cases outside London.

There has always been a bit of snobbery about IP litigation outside London which has given rise to a number of urban myths most of which are completely unfounded.  Chancery business outside London is presided over by two High Court judges, 

• the Vice-Chancellor of the County Palatine of Lancaster who was Sir Michael Briggs until his recent elevation to the Court of Appeal for the Northern and North Eastern Circuits (North West, North East and Yorkshire and the Humber); and
• Mr Justice Morgan for Wales, the Midlands and the West.

They are supported in each circuit by a number of able specialist circuit judges, some of whom did a fair amount of intellectual property work at the Bar.

CPR Part 63.2 reserves patent, registered and registered Community design, semiconductor topography and plant breeders' rights cases to the Patents Court and Patents County Court but all other intellectual property cases can be brought in the Chancery Division or in any county court where there is also a Chancery District Registry (CPR 63.13). According to paragraph 16.2 of the Part 63 Practice Direction there are Chancery district registries at Birmingham, Bristol, Caernarfon, Cardiff, Leeds, Liverpool, Manchester, Mold, Newcastle upon Tyne and Preston though the Caernarfon, Mold and Preston County Courts do not have trade marks jurisdiction (paragraph 16.3)..

Cases that might be suitable for litigation in Birmingham, Bristol, Caernarfon, Cardiff, Leeds, Liverpool, Manchester, Mold, Newcastle upon Tyne or Preston would be those where:

• the parties and their solicitors are in the same neighbourhood;
• the amount in dispute exceeds £500,000; 
• the trial is likely to exceed 2 days; or
• the costs budget is likely to exceed £50,000.

With regard to costs it should be noted that the costs management regime provided by Section II of CPR Part 3 and the Part 3E Practice Direction will apply to most intellectual property litigation wherever they take place.

Chancery practice in the District Registries differs slightly from that of London in a few respects. Cases are managed by district judges rather than.  Applications for injunctions have to be made on special applications days which differ from court to court.  Chapter 12 on page 61 of the current Chancery Guide provides general guidance on Chancery business outside London and Appendix 16 specific guidance on Chancery business in the North East. Further information on local practice directions can be obtained from the Practice Notes tab of the Northern Chancery Bar Association website. 

With resident tenants in the North of England and Wales we are better placed than most chambers to offer advice on intellectual property law and representation outside London than most chambers.  In addition to our 020 7404 5252 number we can be contacted at:

• Birmingham 0121 285 1551
• Bristol 0112 325 6300
• Leeds 0113 320 3232
• Manchester 0161 850 0080
• Newcastle upon Tyne 0191 580 890
• Newport 01633 530005
• Norwich 01603 343030
• Nottingham 0115 824 9090
• Portsmouth 023 9316 2030

Over the next few months we shall be holding workshops and seminars to meet solicitors, patent and trade mark attorneys and other professionals outside London,   The first will be on R & D credits and the patent box (see "Patent Box Roadshows" 4 May 2013). We have already held the first in Liverpool on 29 April 2013 (see "The Patent Box Workshop: Liverpool Inventors Club" 3 May 2013 IP North West) and our next will be in Leeds on 8 May 2013 (see "Leeds Inventors Group: Patent Box and R & D Credits"  4 May 2013). We look forward to meeting you.