The UK: Can a high-cost country change its ways?

AuthorMichael Burdon
PositionPartner and Head of IP, Olswang LLP, U.K
Pages6-8
High-cost countries certainly can change their
ways! But before looking at how, it is worth pausing
to ask, first, whether the legal systems for resolving
IP disputes are indeed, in some countries, "high-
cost" and, second, whether they should change.
Counting the cost in
the U.K.
Patent litigation in the U.K. is often said to be ex-
pensive. Part of the expense is undoubtedly due
to the rigorous procedure and associated fees for
legal services. However, the country’s reputation
for being a "high-cost" jurisdiction is also proba-
bly due to its "loser pays" system under which the
losing party is ordered to pay the winning party's
legal costs, at least in relation to those issues on
which the winner was successful. In apportioning
costs, courts increasingly make deductions for is-
sues on which the winning party was not suc-
cessful (e.g., certain pieces of prior art or an insuf-
ficiency attack). If the parties cannot agree on the
amount to be paid, the costs are assessed by a
specialist costs judge in a detailed examination
that is often more costly than the amount in dis-
pute. Fortunately, such detailed assessment pro-
cedures are relatively rare. As a rule, the winning
party usually recovers from two-thirds to three-
quarters of its total costs for the issues on which
it was successful.
The winning party often seeks and is awarded an
immediate interim payment of a proportion (usu-
ally 50 percent) of the costs it is likely to recover.
As a result, interesting information on costs
reaches the public domain through such hear-
ings, though they tend to fall at the more extreme
end of the scale. For example, Research in Motion
(RIM) spent about £6 million on its recent litiga-
tion with Visto, who by comparison "only" spent
£1.6 million. Johnson & Johnson spent £3.7 mil-
lion compared with CIBA's costs of £2.3 million in
a recent case about contact lenses, and Edwards
spent £2.4 million against Cook's £1.5 million in a
recent case on medical devices. There are no reli-
able data on the "average cost" of patent litiga-
tion, if indeed there is such a thing as an "aver-
age" patent dispute. However, the cost of legal
representation and experts in most patent dis-
putes conducted in the U.K. is unlikely to be esti-
mated at less than £350,000.
Maybe the cost is
warranted?
It is worth bearing in mind that there are only
about 25 patent trials in the U.K. each year, com-
pared to the 50,000 or so patents granted annu-
ally by the European Patent Office (EPO). The dis-
putes that go to trial are of considerable
commercial value as well as technical (and some-
times legal) complexity. At least one party in a tri-
al considers the costs (both its own and the risk
of having to pay the other side's costs) to be
worthwhile. Presumably the defendant also con-
siders that the benefit of defending the case out-
weighs the cost.
In considering whether high-cost countries
should change their ways, and the implicit criti-
cisms in this article’s title, one must acknowledge
that the type of litigation currently conducted in
the specialist Patents Court of the High Court of
England and Wales1– with its rigorous procedure
and associated expenses – appears to be attrac-
tive, at least to those with complex, valuable dis-
putes. The cost might also be about right.
Access to justice
The true test may be whether justice is accessible,
not only for those aiming to enforce rights but al-
so for those seeking to defend themselves, chal-
lenge rights or request a declaration to the effect
that certain rights do not cover a product or
process they wish to market.
THE UK: CAN A
HIGH-COST COUNTRY
CHANGE ITS WAYS?
1 Patent infringement
actions in Scotland are
brought in the Court of
Session in Edinburgh.
FEBRUARY 2010
6
This article by Michael Burdon, partner and Head of IP, Olswang LLP, U.K., focuses on patents practice in
the U.K. He has participated in discussions on, and made proposals for, reform of the U.K. and European
patent litigation procedure.
IP LITIGATION COSTS

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