New law helps businesses protect their IP rights
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01 October 2011 - BIS and IPO
A new law comes into force today that will give small and medium sized
businesses easier access to justice to protect their copyright and
trade marks. The Patents County Court (Financial Limits)
Order (No.2) 2011 creates a clearer definition of which
disputes involving copyright and trade mark claims should be heard in
the Patents County Court (PCC) and which ones should go to the High
The change will encourage more businesses to protect their
intellectual property and enforce their rights. Evidence presented to
the recent Hargreaves Review of Intellectual Property and
Growth indicated that small and medium sized firms are
dissuaded from enforcing IP rights because of the fear of high court
A new damages cap of £500,000 for all claims in the PCC means
small companies claiming damages up to that amount are less likely to
face a potentially more expensive trip to the High Court.
Minister for Intellectual Property, Baroness Wilcox said:
“A more accessible justice system will give companies greater
incentive to protect and enforce their intellectual property rights.
Making it easier for small firms and entrepreneurs to use the legal
processes will give them more time to concentrate on business
activities, innovate and support economic growth.
“These changes provide clarity on the legal processes,
certainty over the risks and give small enterprises the confidence to
stand on an equal footing with financially stronger companies.”
Previously, a business with a legal case worth less than
£500,000 could face litigation in either court with unknown levels of
financial risk. An earlier Order, which came into force on 14 June
2011, had set the same limit in relation to patents and design cases.
The change in law will ensure that lower value, less complex
cases, which would typically involve small businesses, will
automatically fall within the jurisdiction of the PCC which has a less
costly and more streamlined process. Therefore the risk of expensive
disputes over where the case should be heard will be reduced.
In the past some companies were put off protecting their
rights due to the uncertainty of how much it would cost. Supporting
evidence to the Hargreaves Review of Intellectual Property
and Growth highlighted that around one in five (17 per cent)
of small and medium sized businesses had given up attempting to enforce
Support for a limit was expressed by small and medium sized
businesses during a full public consultation on the reform of the PCC.
The effectiveness of the damages cap will be monitored with a formal
review in 2014.
1. The Intellectual Property Office (IPO) is within the
Department for Business, Innovation, and Skills (BIS) and is
responsible for the national framework of Intellectual Property rights,
comprising patents, designs, trade marks and copyright.
2. Its role is to help manage an IP system that encourages
innovation and creativity, balances the needs of consumers and users,
promotes strong and competitive markets and is the foundation of the
3. It operates in a national and an international environment
and its work is governed by national and international law, including
various international treaties relating to Intellectual Property (IP)
to which the United Kingdom is a party.
4. The Patents County Court (Financial Limits) Order (No. 2)
2011 came into force on 1 October.
5. This negative resolution Order, laid under the Courts and
Legal Services Act introduced a £500,000 limit to the value of a broad
range of IP claims, including copyright and trade mark claims, which
may be heard in the Patents County Court.
6. The earlier Patents County Court (Financial Limit) Order
2011 became law on 14 June 2011 through section 288(5) of the
Copyright, Designs and Patents Act 1988 and introduced the limit in
relation to patents and design claims. As required, that Order had been
debated in the House of Lords on 28 March 2011 and in the House of
Commons on 3 May 2011.
7. The limits were implemented following a report by Lord
Justice Jackson in his review of Civil Litigation Costs on 14 January
2010. One of the proposals was to reform the Patents County Court.
8. The Central London County Court is designated as a Patents
9. The limit does not remove existing options for any SME,
which includes filing a claim in the High Court. Implementation adds
further possibilities to any potential IP litigation strategy for all
SMEs including those in the high tech business sectors. With the
exception of point 3 below, which is already available, the following
scenarios will be possible once the relevant measure comes in to force:
- A claimant may abandon any excess claim above the limit of
damages; in which case a Patents County Court shall have jurisdiction
to hear and determine the action, but the claimant may not recover more
than that amount (CDPA s288(2)).
- If the parties agree that a Patents County Court shall have
jurisdiction in any proceedings, that court shall have jurisdiction to
hear and determine the proceedings notwithstanding any limit imposed
under section 288 (CDPA s288(4)).
- A claimant may still seek to have the case heard under the
Streamlined Procedure (Patents Court Guide para 8.6) in the Patents
10. The Hargreaves Review of Intellectual Property and Growth,
and the Government’s response can be found at www.ipo.gov.uk/types/hargreaves.
11. Supporting documents highlighting enforcement issues of IP
can be found at www.ipo.gov.uk/ipreview.
12. For further information on the Patents County Court
(Financial Limit) Order, visit the IPO website www.ipo.gov.uk.
About the Author
© Crown Copyright. Material taken from the BIS Department for Business, Innovation and Skills. Reproduced under the terms and conditions of the Click-Use Licence.
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Article Published/Sorted/Amended on Scopulus 2011-10-03 17:16:07 in Legal Articles