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The PCC Small Claims Track – What Does This Mean For SMEs?

The PCC Small Claims Track – What Does This Mean For SMEs?

Published: 18.09.12 at 15:53

The Patents Count Court

Despite the name, the Patents County Court (PCC) is not only concerned with patent disputes. It is in fact the appropriate court in which disputes concerning copyright, trade marks, unregistered and registered designs, passing off, database rights and patents are heard. The court hears a broad range of cases spanning multiple areas of industry - from fashion and textiles, film and television, photography and the pharmaceutical industry.

So why the name? The simple answer to that is, we don't really know! However, it does have a certain ring to it, which seems entirely appropriate for a court that is concerned with brand names, images rights and the like. A review of the County Court system (of which the PCC is a part) is currently on the present Government's agenda and so we could see a change of name to the "Intellectual Property County Court" in the not too distant future.

But, for the time being at least, the name remains and it is a court with which small and medium sized enterprises (SMEs) in the creative industries should be familiar. If you feel that your rights have been infringed then it is more than likely that the PCC will be the appropriate forum for any dispute.

For the Love of Money

The main reason why the PCC is the appropriate forum for cases involving SMEs is that there is a cap on damages and also on the level of costs that can be awarded.

The maximum amount of damages that can be claimed is £500,000. The maximum costs award (i.e. the legal costs recoverable from the other side) is set at £50,000. This does not mean that either party won't spend more than £50,000 on legal fees, just that they cannot recover more than £50,000 from the other side. In reality, the costs awarded in the PCC are rarely more than £30,000.

What all this means is that a small company can issue a credible threat (even against a large multinational corporation) without having to worry that a potentially limitless costs order could cripple their business if they lose. 

However, despite these caps being introduced in 2010, a recent government review of intellectual property and growth proclaimed that "infringement is [still] the single biggest issue affecting all types of IP right" and businesses feel powerless to do anything about it.

The current court regime is seen as being painful, drawn out and expensive. Surely, considering that 99% of UK businesses are SMEs and account for more than half of overall employment, this is an issue that needs to be addressed.

Realistically, a successful claim for copyright infringement of a few photographs may only result in a damages award of a few hundred, or at most a couple of thousand pounds. That is not to say that this is an insignificant amount of money. However, the amount of the claim is disproportionate to the inherent risks involved. The risk of being hit with a £50,000 costs order if a claim is unsuccessful may, quite understandably, deter an SME from even bringing a claim in the first place.

What this goes to show is that there is a demand for a streamlined court procedure for smaller claims. Hence the Government's proposals for a new small claims track.

The New Small Claims Track

On 1 October 2012, the PCC will introduce a new small claims track for claims of up to £5,000 in value.

The court will have the jurisdiction to hear disputes concerning copyright, trade marks, unregistered UK and Community (EU) design rights and database rights. Claims involving registered designs and patents are not included (patent disputes, especially, will nearly always involve a claim for damages exceeding the £5,000 limit).

No costs will be recoverable from the losing side save for the cost of issuing a claim form (a couple of hundred pounds).

It should be noted that the small claims track may not be suitable for resolving all types of IP dispute. It will, however, suit the lower value and less complex claims, for instance in cases of direct copying. For example, if you were to find that your photographs have been uploaded to a website without your permission.  

The Government considers that the new, more streamlined procedure will bring the PCC closer to achieving the purpose for which it was created - to provide a cost effective forum in which SMEs can resolve their IP disputes.

Own-it went to hear an expert panel, including His Honour Judge Birss, the resident Judge at the PCC, talk about the issues faced by those taking legal action on IP infringement. It was impressed upon us that the current concerns held by SMEs are being addressed and that, all in all, the future looks bright for SMEs. Keep an eye on our news updates for further developments.

A detailed guide to the Patent County Court Small Claims Track can be found here: http://www.justice.gov.uk/downloads/courts/patents-court/patents-court-small-claims.pdf

For recent interesting cases decided in the PCC see here (copyright in film footage), here and here (photographic copyright infringement).

You should always seek legal advice before pursuing a claim of IP infringement. Either ask Own-it for advice or contact a solicitor.

Article by Joe Walsh

Photograph (some rights reserved) by Christopher Titzer

Comments

  1. China

    Ooooh does anyone know if this applies to UK companies challenging companies in China?

    Posted by Louise Miller on 11.10.12 at 11:45

  2. The PCC Small Claims Track – What Does This Mean For SMEs?

    Only for alleged infringements by Chinese companies here and of course Chinese companies can sue for infringement of their rights in the Patents County Court. Indeed, Wuxi Suntech Power Co. Ltd. has done that http://www.bailii.org/ew/cases/EWPCC/2011/17.html

    However, there are things that SME can do in China through SIPO (the Chinese intellectual property office) and indeed the Intermediate Peoples Courts. A good source of information on IP in China is the IPR China Helpdesk which is funded with EU money ( http://www.china-iprhelpdesk.eu/).

    Also, our chambers can introduce you to our connections with specialist IP lawyers and patent and TM attorneys with expertise in Chinese law.

    Posted by Jane Lambert on 11.10.12 at 12:33

  3. get news by RSS The PCC Small Claims Track – What Does This Mean For SMEs?

    I have listed the above article on my "further reading" list at the end of my own article on the small claims track http://nipclaw.blogspot.co.uk/2012/09/patents-county-court-new-small-claims.html

    For those who just want basic information about the new jurisdiction I have placed a link to my presentation to Sheffield Inventors on 1 Oct 2012 http://www.slideshare.net/nipclaw/the-patents-county-court-small-claims-track

    I hope readers will find these materials useful.

    Posted by Jane Lambert on 11.10.12 at 12:41

  4. China & others

    Make sure you are challenging the right company in the right country.

    UK companies have signed contracts with distributors causing worldwide infringement. In that case the UK Company is vicariously liable in the UK.

    If that sounds obvious, this is being challenged by solicitors.

    But check it out for yourself. I am not a lawyer and this is not advice.

    But many IP lawyers are failing to uphold the law, in my opinion, so always question any advice or information you get. If it doesn't seem right, it may not be.

    Posted by Victor Lilley on 11.10.12 at 17:02

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