Pat lit High Court County Court

17 May 2004

Mark Campbell, Mark Heaney

The English legal system has two Courts designated to hear patent (and registered design) actions. The Patents Court is within the Chancery Division of the High Court and is the traditional forum for the trial of patent actions. The Patents County Court (the PCC) is a relative newcomer, created under the provisions of the Copyright Designs and Patents Act 1988. One of the intended functions of the PCC was to provide to small and medium sized companies and to individuals a means of protecting their valuable patent rights which may otherwise have been too costly, both in terms of management time and money.


The advent of the Civil Procedure Rules in 1999 means that the same procedural rules now apply in both courts and that the route of appeal is the same from both. In short, the only tangible difference between the two is that patent agents have a right of audience in the PCC but not in the Patents Court. In fact, the status of the PCC is such that many of the limitations placed on County Courts do not apply to it. In particular, the PCC is entitled to hear cases with any value of claim. Further, the Patents Court does not have a right to transfer a case from the PCC to itself (a right which the High Court does have generally in relation to County Court actions).

A choice of forum for patent disputes is clearly of great benefit to parties wishing to litigate their patent rights. However, given that any patent action can be started in either the PCC or the Patents Court, a party wishing to commence a patent action must consider carefully the appropriate forum for the litigation. The recent case of Halliburton Energy Services Inc v Smith International (North Sea) Limited[1]has provided some assistance in determining the appropriate forum for an action and whether it is appropriate to request transfer of proceedings between courts.

Halliburton v Smith

Halliburton v Smithconcerns two patents relating to roller cone drill bits for use within the oil and gas industries. In December 2003 Halliburton commenced proceedings against Smith in the PCC for infringement of the first patent. In January 2004, Halliburton commenced further proceedings in the PCC against Smith alleging infringement of a second patent and, simultaneously, Smith commenced proceedings against Halliburton in the Patents Court for revocation of that second patent. In February 2004, His Honour Judge Fysh QC SC transferred the two Halliburton actions to the Patents Court to enable all three actions to be case managed together.

The matter of the appropriate forum was discussed in detail at the Case Management Conference in the Patents Court. Halliburton sought to have all the actions transferred to the PCC and this was resisted by Smith. After hearing detailed argument for both parties, Mr Justice Pumfrey held that the three actions should remain in the Patents Court and his Judgment, along with that of His Honour Judge Fysh, provides useful guidance as to the relationship between the two Courts.

The relevant point in the Halliburton v Smith case was whether the actions were suitable for trial only in the Patents Court. Mr Justice Pumfrey considered that it was dangerous to characterise any case as only suitable for trial in the Patents Court, given that the Judge assigned to hear the trial would be drawn from the same pool in either case and that it was likely that the result would be the same in either case. Instead, he considered that the clue to the relationship between the two Courts lay “more in the duration of trial and intrinsic complexity”.In the Halliburton v Smith case, Mr Justice Pumfrey considered that the actions appeared to be of “great technical complexity”, noting that the patent specifications in that case were “sufficiently mathematical to make the task of exposition a difficult one”. The Judge noted that in this case the size and wherewithal of the two parties was such that this was not something that needed to be taken into consideration in considering which tribunal should hear the matter. Turning to the likely duration of the trial, Mr Justice Pumfrey considered that the time estimates put forward by the parties of 10 to 15 days would require the structured approach that could be provided by the Patents Court. However, if such an action were to be placed in the PCC list, it would have the potential to obstruct the list. The combination of circumstances made it therefore intrinsically a Patents Court action.

The earlier Judgment[2] of His Honour Judge Fysh focussed on the same issues with the result that “what comes about in practice is decided as a matter of discretion, based on costs, feel, experience, the state of the judges’ diaries, the availability of witnesses, and so on, all to some degree, blended.”

Conclusion

The Judgments of His Honour Judge Fysh and Mr Justice Pumfrey suggest that a decision as to the appropriate forum for a patent action is in essence one based on the combination of all the circumstances of the case. Although not conclusive, the state of the lists in each court appears to be an important factor. Given the recent popularity and consequent increasing case-load of the PCC under the auspices of His Honour Judge Fysh, ensuring that actions are placed in the appropriate list may become increasingly difficult. Without specific rules to guide parties in choosing their forum, for example by placing a limit on the value of claims heard by the PCC, the ability of small and medium sized companies to take advantage of the PCC may be eroded.


[1] [2004] EWHC 556 (Ch)

[2] Halliburton Energy Services Inc. v Smith International (North Sea) Limited (2 February 2004, unreported).