In defence of the IPEC
Aaron Wood explains why he believes the streamlined system is working as intended.
Is change needed in the IPEC? This is certainly the view of some in the profession, as an article in issue 472 of the CITMA Review explored.
Yet, based on my own practice, I have formed a different view. For example, on the subject of “misuse”, it is my experience that such abuse is rare.
Central to the earlier article was the concern that IPEC cases are being run as if they were “High Court” litigation.
But because the IPEC is a division of the High Court, IPEC cases are High Court litigation by definition.
The IPEC is able to hear all levels and types of IP cases – and to provide access to justice to those who otherwise would be shut out – subject to the limits of the jurisdiction (key among them the three‑day maximum trial length).
If we consider Shazam Productions v Only Fools, ([2022] EWHC 1379 (IPEC)) it has been suggested this represents an abuse by the Claimant because this complex case could only be made to fit the IPEC’s timetable thanks to a scope‑cutting order by His Honour Judge Hacon at the case management stage.
I would like to observe that the case began in the High Court and was ordered to be transferred to the IPEC by Master Teverson.
He was persuaded that the Defendants could only afford to defend the claim in the IPEC.
As a result, it seems to follow naturally that the case needed careful management to fit the IPEC’s time constraints.
In fact, a Claimant may plead a case as a “High Court” case only to find that it becomes an IPEC case and has to be streamlined.
This doesn’t, to my thinking, qualify as abuse, but rather as the system working as it should.
The Claimant pleaded a complex case involving (it alleged) infringement of many rights, and the Defendants availed themselves of the financial protection of the IPEC.
The IPEC judge used his prowess to make the case work to the limits of the jurisdiction by requiring exemplars.
Rather than exposing a weakness, I believe this is a great example of the strength of the IPEC regime.
The use of exemplars is an approach also used in copyright and design cases in the High Court to limit their burden on it, such as in Neptune (Europe) Ltd v Devol Kitchens Ltd (25th August 2017) and Original Beauty Technology & Ors v G4K Fashion Ltd & Ors (24th February 2021).([2017] EWHC 2172 (Pat) [2021] EWHC 294 (Ch))
Even if Shazam had stayed in the High Court proper, it is my view that it would have been subject to the same streamlining seen in the IPEC.
“Excessive” statements of case in the IPEC have also been raised as a cause of concern.
Here, I would point out that because the IPEC permits a case to be amended post‑case management conference (CMC) only on exceptional grounds, a party has to ensure it is not exposed by the failure to plead its case properly.
Cases where it seems that a claimant has exaggerated its financial claim or has pursued the case in a particularly egregious manner (meaning that a defendant is likely to be excessively burdened with irrecoverable costs) are by my tally rare.
The case of Philip Warren & Son Ltd v Lidl Great Britain Ltd & Ors (Ch) (26th August 2021) provides a telling example, and the judge addressed the risks that result when litigation funders and damage‑based assessments are involved. ([2021] EWHC 2372)
As to whether an improvement to the IPEC procedure would come from resolving the CMC on the papers to reduce the cost of that step, my opinion is that the Court was right to reject the suggestion.
The CMC is the key cut‑off in the IPEC, and the list of issues – formed from comparison of the statements of case – is the vital document that regulates all other case management decisions.
Poorly drafted statements of case lead to a case becoming bloated in the later stages by way of a poor list of issues.
My experience of the costs of proceedings is that, while the statements of case can exceed the IPEC cap a little, and the CMC often exceeds it by a few thousand pounds, it is in the steps that follow the CMC (disclosure, witness statements and trial) where the greatest discrepancy between the cap and the actual expenditure occurs.
The adage “measure twice, cut once” is relevant here. If suitable focus is applied to the case up to and including the CMC stage, then costs thereafter are often more appropriately incurred.
Where extra work can arise is where a claim or defence is unclear (leading to a request for further information) or where a party makes unreasonable denials (leading to further applications).
This is often not abusive, and less still a failure in the system.
Often, issues in terms of timing and complexity in the IPEC arise where the parties agree in their draft CMC order that there should be all of the “bells and whistles”.
A judge at the CMC stage is liable to conclude that, if both sides say something is essential, then it most likely is (the two sides having the greatest understanding of the case); they know what evidence will be marshalled as a result of the steps they propose, and they know what the cost of the exercise will be.
The judge assumes that the parties understand the time constraints and recoverability.
Finally, having watched the Muzmatch case, (Match Group LLC v Muzmatch Ltd [2022] EWHC 941 (IPEC)) about which Mr Caddick KC noted the large amount of documentation in submissions, I can confirm that the issues were “simple or straightforward”.
One party asserted repute and goodwill, while the other asserted the widespread use of the term MATCH.
In my view, voluminous evidence used to make good a point does not mean that a point is complex, but rather is an attempt to ensure the other side cannot suggest the evidence is insufficient.
Such a large volume of evidence can be dealt with by way of exemplars, schedules to assist the Court and (if necessary) additional written closings.
In my view, the IPEC provides an important path to justice, and its judges are careful to ensure things work effectively. It is working, save for the occasional bad actor.
Aaron Wood is a Trade Mark Attorney at Brandsmiths
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Author
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Aaron Wood
Brandsmiths