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IP owners will need to reassess their UK litigation strategies in light of costs reforms

At an AIPPI UK event held in London this week experts discussed how reforms aimed at reducing the cost of civil justice in England and Wales will impact on IP litigation strategy.

Court of Appeal judge Lord Justice Jackson made a number of recommendations aimed at reducing civil litigation costs in England and Wales in his December 2009 report (the ‘Jackson Report’). Details on the implementation of his proposed changes which have specific implications for IP matters can be viewed here.

Speaking at this week’s AIPPI lecture, Patents Court judge Mr Justice Arnold identified several aspects of the Jackson reforms which he believes will have a significant effect on the litigation strategies of IP owners and their counsel.

From 1st April 2013, litigating parties will be required to submit their litigation budgets to the court for approval. The court can then use this budget when awarding costs at the end of a case, eliminating the need for post-trial costs assessment which can typically take up to two years and result in further expense for litigants. Budgets will need to be more detailed and more specific than was previously the case and will either have to be agreed on by both parties or receive the court’s approval – and this means that, prior to trial, litigants will be able to see their opponent’s litigation strategy in greater detail than ever before. Rowan Freeland, partner at Simmons & Simmons and a panellist at the AIPPI event, cautioned IP litigators: “Your opponents will no doubt put these budgets under even greater scrutiny than your clients will.” Mr Justice Arnold agreed that the possibility of seeing an opponent’s budget in extensive detail would likely impact on litigation strategy. “The main point here is not the end result,” he said. “Rather, it is the increased transparency during the case. Everybody will be able to see what everyone else is budgeting for – and that is going to be a major change.”

Mr Justice Arnold also noted that the use of alternative litigation funding arrangements is likely to become increasingly commonplace as a result of several proposals in the Jackson Report – though he added that initially this would likely have much less of an impact in IP than in some other areas of the law. From the beginning of April, litigating parties will no longer be able to recover the cost of after-the-event insurance premiums and lawyers’ success fees from the losing side. In light of these changes, the Jackson Report highlights before-the-event insurance and third-party financing as important alternative sources of funding for prospective litigants. Additionally, parties will be able to enter into damages-based agreements (similar to the contingency fee arrangements already available in the United States) with their counsel.

Last week, IAM reported on the frustration felt by British SMEs at the price of enforcing their IP rights in their home jurisdiction. The measures introduced by the Jackson Report are intended to reduce those costs. However, increasingly stringent rules on budgeting will require IP owners – including multinational corporations, sole inventors and all those in between – to keep a closer eye on their UK litigation strategy than ever before.

Jack Ellis
IAM Magazine
16 February 2013

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