The Cost Challenge: How Can The UK Courts Remain Competitive For Patent Litigation In A New Era?

• Published date: 10 November 2022
• Subject Matter: Intellectual Property, Patent
• Law Firm: Gowling WLG
• Author: Mr Gordon Harris

Introduction

When Lord Wolff published his proposed reforms to the conduct of civil litigation in England and Wales in 1995, he stipulated that the court system should deliver justice fairly, offering 'appropriate procedures at a reasonable cost'. He had identified excessive costs and poor forecasting as key issues requiring to be addressed.

That his reforms did not have the instant impact he would have hoped for became clear in the requirement for Lord Jackson's 'Review of Civil Litigation Costs' in 2009. Lord Jackson advocated changes to disclosure rules, the introduction of costs budgeting, and more robust case management as the best means of reducing the costs of litigation generally, having identified patent litigation as an area of particular concern.

So is patent litigation a particular problem, and if so, why?

Background

Between the Wolff Report and the Jackson Report came the widely reported costs decision in RIM v Visto¹ in which the lawyers representing RIM managed to run up costs of around £6 million on a case involving a single patent. Floyd J, as he then was, did not pull his punches. He said:

... it is astonishing that a sum in the order of £6m can have been spent by RIM's advisors in fighting these disputes.

And he went on:

This case was not a particularly heavy patent action. There was no disclosure, and the technology was not of the most complex kind. The trial itself only lasted about five days.

Floyd J was particularly taken with the fact that one side outcharged the other by a factor of around 5 to 1. He went into the breakdown of hours and noted that about nine 'man years' had been spent over 15 months.

The impact of that case and Floyd J's decision was significant, and directly or indirectly has led to some major attempted reforms to limit the costs of patent litigation.

The Jackson Report and Other Recommendations

The planning which led to the Jackson Report (2009) was well underway before the RIM v Visto decision, but it still identified IP litigation as a particular area for concern. Noting the impact on SMEs in particular, the report specifically recommended reform of what was then known as the Patents County Court. The proposals led to the Intellectual Property Enterprise Court (IPEC, a division of the High Court, rather than a county court) which we see today, and which has done much to improve the accessibility of justice in smaller IP disputes.

However, it is the eye-watering costs of major High Court IP cases, in particular patent cases, which has continued to cause concern and which has provoked some of the other reforms which have taken effect to try to address the problem. There are a number of factors that have served to increase costs in recent years.

(1) Active Case Management

This was a specific recommendation of the Jackson Report and was supposed to involve judges taking a much more direct role in the management of litigation in order to avoid the parties incurring massive costs. It does, of course, depend entirely on the willingness of the judge in question to 'take a hard line'. Some do, and some very much do not. Really active case management seems to have been more prevalent in the era of Judge Birss (as he then was) in the IPEC, but otherwise, the exercise of judicial powers to reduce the scope of the issues in litigation is sporadic at best.

The judges are very prone to...