First Case Management Conference under new Patent County Court rules

03 January 2011

Adrian Howes

Dame Vivienne Westwood OBE v Anthony Edward Knight
Patents County Court (HH Judge Birss QC)

Since the 1 October 2010 the Patents County Court (“PCC”) has been operating under a new regime following changes to its rules of procedure.  All cases commenced after this date are governed by these new rules, which are primarily focused on costs and case management.  Their aim is to speed up and reduce the amount of money spent litigating straightforward intellectual property cases.  The Westwood v Knight case discussed below is the first to come before the PCC at the case management stage under these new rules.

It is easily forgotten, no thanks to its name, that the PCC is able to hear cases relating to intellectual property rights other than just patents.  Therefore cases relating to copyright, designs and trade marks may be brought before it.  Indeed the PCC is due to have its name changed to the “Intellectual Property County Court” to reflect this. 

Though this aspect of the proposed changes (in the Intellectual Property Court Users’ Committee report on the PPC in July 2009) is yet to take affect, there have been changes to the Civil Procedural Rules (“CPR”) (see new CPR rules 63.17 to 63.26).  These changes include putting a cap on costs of £50,000 on the liability stage of the proceedings and a further £25,000 on any damages enquiry.  The cap is cumulative to these totals depending on what stage the case is at.  Therefore in cases which settle before the end of the trial the party seeking costs will not be able to claim this full amount. 

The other significant changes include front loading the case by requiring parties to concisely set out all their arguments and evidence in their initial pleadings.  The idea being that by the Case Management Conference (“CMC”) the court has a good grasp of the case and may make specific and limited directions on a cost/benefit basis.  The PCC is therefore required to only make orders in respect of disclosure, witness statements, expert reports, cross-examination at trial and skeleton arguments in relation to “specific and identified issues” (CPR Rule 63 PD para 29).  The hope is that this will lead to cheaper and quicker proceedings.  However, it is recognised that the cost/time effectiveness of these rule changes will only assist if the PCC and the parties involved are able to find the correct balance of ensuring that adequate detail is put in each party’s statement of case, thereby reducing the directions that may need to be given by the court, while at the same ensuring there is neither too much front loading, with parties producing excessive pleadings, or the court giving costly directions in relation to evidence and arguments that are more typical of the High Court.  A final point worth noting is that the rules also require the initial pleading to be signed off with a statement of truth by any person with knowledge of the facts alleged.  This may be more than one individual if more than one person has knowledge of the facts contained therein.

The Westwood case, the first to test these new rules at the CMC stage, took place before the new PCC judge HH Judge Birss on 22 October 2010 between the famous fashion designer Dame Westwood and a Mr Knight, a seller of goods on the internet.  This case was transferred by the High Court to the PCC by an Order dated 1 October 2010.  On the judgment of HH Judge Birss this case therefore fell within the new regime.  It should be noted at the outset that although Dame Westwood had instructed solicitors and counsel to act on her behalf Mr Knight was a litigant in person, and due to his unavailability did not attend the CMC.  Accordingly, submissions were only made on behalf of Dame Westwood.

A consequence of the transfer of this case to the PCC was that the claimant’s pleadings (though not the defendant’s on the judge’s view) were in a form typical of pleadings before the High Court.  As such they only dealt with allegations and matters of fact rather than argument. Additionally, the statement of truth was signed by the claimant’s solicitors rather than those with knowledge of the facts. 

The issues raised in the pleadings are not of particular relevance other than they included issues of infringement of copyright and trade marks, a claim of passing-off and the use of a number of domain names by the defendant.  The defendant’s defence included assertions that certain devices claimed to be infringed were not original works of the claimant (although not in those words).

The judge first considered the adequacy of the pleadings under the new rules.  He determined that Mr Knight’s pleadings were adequate as they covered the issues so far as they needed to be and the statement of truth had been signed by him.  However, he believed the claimant’s pleadings required amending under the new rules in three respects.  The first was to include a reference to complying with the pre-action protocol as now required in both PCC and High Court pleadings.  The second was that the statement of truth required signing by parties knowledgeable of the facts stated therein.  As an aside he noted that if a party’s solicitors were knowledgeable of certain facts contained in the pleadings they should also sign them.  He also added that if more than one person was signing the pleadings they should refer to the sections that they were making the statement of truth in respect of.

The third amendment required by the PCC was more substantive.  The judge believed that although the claimant’s pleadings had sufficiently stated the details of five of six devices, the claimant had failed to plead sufficiently the details of one device (see below) so required the claimant to amend her pleadings to include details of this device.

Following considerations of the pleadings the Court went on to consider whether any further evidence was required in the proceedings, in addition to that contained in the pleadings.  The judge, having noted the changes to the rules, stated:

“It seems to me that one important consequence of the provisions is that, subject to proper safeguards, some relevant evidence will be excluded from trials. Merely because some evidence is relevant will not necessarily justify permission being given to adduce it.  On the other hand the parties need to know that the court will give permission for evidence to be filed in a proper case since otherwise there will be a temptation to overload the statement of case with unnecessary material.”

A number of requests to produce further evidence were made by the claimant. One request, for example, was for an order that the claimant be allowed to give further evidence on the use of various brands by the claimant, which the defendant had challenged.  The Court ordered this.  The judge in conducting a cost-benefit analysis believed that providing this evidence would be useful.  In doing so he also noted that although no evidence was provided by the claimant’s solicitor on costs, it may be useful to do so in some cases; though he acknowledged that this was not such a case.  This cost-benefit approach was applied to other requests made by the claimant.

For example, the judge also considered whether the claimant should provide further evidence in support of the plea “the claimant is a very well known fashion designer who is known throughout the world, including the United Kingdom”.  He noted that it was common, particularly in passing-off cases, to produce extensive costly evidence on this type of issue, even when not really challenged by the defendant and to no real benefit.  Accordingly, he agreed with the claimant that it should not have to provide evidence on this. 

One particular issue on evidence that arose of relevance to trade mark cases generally was the use of survey evidence and the like to show confusion.  The judge noting this issue felt that such evidence was complex and costly, and in this case would plainly fail the cost-benefit test; the suggestion being that this would be so in the majority of trade mark and passing off cases.  He did, however, allow the claimant to put in evidence from eBay’s website suggesting that customers were buying goods from the defendant in the mistaken belief that they were the claimants.  Although he recognised that this type of evidence might not be relevant he believed that in this case it would not be costly to produce and might be useful.

In addition to allowing some of the claimant’s requests to provide further evidence, the judge, unusually of his own accord, also ordered that the claimant be allowed to provide evidence on one of six devices that the claim related to which the defendant had challenged on the basis of its originality, and hence its subsistence and ownership by the claimant.  He realised that it was not normal practice for a judge to make an order in respect of evidence not requested by the parties, but noted he was not requiring the claimant to produce such evidence and that this was clearly a point of contention.

Having considered these various issues of evidence HH Judge Birss went on to determine whether any orders should be made regarding disclosure, expert evidence and cross-examination at the hearing.  As the claimant had made no submissions regarding these the judge did not order them.  However, the judge did order that skeleton arguments may be filed.  He made this order as the pleadings, being in the form of High Court pleadings, did not contain the parties’ arguments. 

In doing so he noted that in the 1990s costly statements of case were produced, which the new rules are intended to avoid, and that the purpose of fuller pleadings under the new rules was to assist the court with appropriate directions at the CMC stage. He stated:

“At the pleading stage it may well be unnecessary to do more than state concisely what the argument is rather than take up space setting it out in elaborate detail.  The court is unlikely to need arguments to be addressed in depth for the CMC and permission can always be given (if appropriate as here) for skeleton argument before trial.”

As an aside and on the topic of skeleton arguments, it is worth noting that during the CMC the claimant had only submitted a witness statement, and did not provide a skeleton argument as is typical before the High Court.  The judge believed this approach to be helpful.

In summary, it is clear that HH Judge Birss is determined (and rightly so) to allow only additional evidence and arguments which are likely to be of some use and not costly to produce.  He has also shown, at least in this case, that he is prepared to actively manage the case on the basis of both submissions made by the parties and to some extent of his own accord.  In doing so he also unusually gave a 1 day trial date just 6 months from the date of the CMC and even more unusually stated a date on which he would hand down judgment, only two weeks after the trial.

If HH Judge Birss is able to keep this momentum up and finds the right balance between directions and front loading of the case, thereby keeping costs down, there is every chance the PCC under the new rules will be a success.  The danger of course is falling into the trap which caused the PCC to fail in the 1990s where parties, under rules intended to streamline the PCC, caused massive front loading of cases with excessively substantial pleadings being produced.  HH Judge Birss clearly recognises this concern and with hope and historical hindsight will be able to avoid this trap.