The knowledge economy is evolving into the network economy. Traditional business practices are rapidly changing accordingly. But the machinery of governments and legislatures grind at a much slower pace, often rendering business rules and regulations unfit for purpose.
UK governments have responded to such changes in recent years by promulgating legislation aimed at supporting and facilitating enterprise and innovation. In particular, UK owners of intellectual property rights now have access to a newly constituted Intellectual Property Enterprise Court (IPEC). This should be welcome news for artists wishing to protect their copyrights.
Since 1990 successive UK governments have striven to offer rights owners easier and cheaper access to courts specialising in IP, in order to protect and enforce their intellectual property including copyrights, trademarks and patents. From October 2013 the IPEC deals with ‘smaller, shorter, less complex, less important, lower value actions and the procedures applicable in the court are designed particularly for cases of that kind. The court aims to provide cheaper, speedier and more informal procedures to ensure that small and medium sized enterprises and private individuals are not deterred from innovation by the potential cost of litigation to safeguard their rights. Longer, heavier, more complex, more important and more valuable actions belong in the High Court.’
The IPEC has two alternative procedures: multi-track; and small claims track. Under multi-track the court can order infringers to pay successful claimants damages up to £500,000, plus costs of bringing the suit of up to £50,000. The small claims track is for less substantial claims: the court has power to order payment of damages up to £10,000, but with severe restrictions on costs orders. The small claims track is likely to be of most interest and use to artists concerned about copyright infringements that have hitherto been uneconomic for them to pursue through the courts – say, where an artist’s work is reproduced in a publication or film or broadcast without their prior consent.
Artists (and other IP rights owners) should not be inhibited or deterred from making a small claims track application just because the infringement is of low economic value, because the IPEC is ready, willing and able to deal with such infringements. IPEC judges have specialised knowledge and understanding and experience of low level infringements to copyright (as well as trade mark and 3D design rights). Successful claimants may be awarded not only financial compensation/damages, but also remedies such as an account of profits (by which an infringer is ordered to pay the claimant profits that have been generated by the infringing use) and a final injunction (to prevent future infringements). If a claimant needs emergency relief before trial – say an order for search and seizure, or freezing of assets – the multi-track procedure should be used.
Trial hearings are informal, and will usually last no more than one day; and are normally held in a public court room. Hearings are audio-recorded by the court, which will provide a transcript to any party on request and payment of a modest court fee. In the same way that the small claims procedure operates in the County Court for debt recovery or breaches of low-value contracts (up to £10,000), the IPEC may ‘adopt any method of proceeding at a hearing that it considers to be fair’: strict legal rules of evidence do not apply; witnesses do not need to take an oath; and questioning and cross-questioning may be limited. In other words the judge would normally ask the parties to describe their position, and encourage them to have an informal conversation about the issues involved. In addition, the parties can agree to dispense with a personal trial hearing and request the court to deal with the matter based solely on their written submissions. In any event, the court must give the parties reasons for its final decision (against which either party might wish to appeal).
Claimants wishing to use the small claims track must say so when they file their application to the court. When defendants are served with the written claim by the court, they are given the chance to disagree with using the small claims track. On the other hand claimants may not ask the court to use the small claims track, but the defendant may wish to do so. If the parties do not agree, the court decides whether multi-track or small claims track will be used.
Costs is a key factor parties should consider when deciding which track to use. In conventional court proceedings, the court will order losing defendants to pay the legal costs of successful claimants. The IPEC’s rule in relation to the recovery of costs for small claims track cases is intended to discourage the use of lawyers and encourage parties to deal with cases themselves; the rule states that ‘the court may not order a party to pay a sum to another party in respect of that other party’s costs, fees and expenses, including those relating to an appeal’. In exceptional circumstances the court may order an unsuccessful defendant to pay the successful claimant’s fixed court fees and small amounts of expenses incurred in attending court hearings.
The IPEC’s rules include a further disincentive for parties using lawyers: barristers and solicitors and legal executives or not allowed to present the case for either party. Instead parties are allowed (encouraged) to present the case themselves (in a non-legal way), and may be assisted at court by a non-legal ‘friend’; and companies may be represented by one of its authorised officers or employees. Expert witnesses are not normally allowed to be used to give oral or written evidence or opinion.
To encourage speedy despatch of cases, the IPEC’s rules impose on parties strict procedural timescales. After written claims have been served on defendants, they have only a few weeks to file any defence with the court; and the claimant similarly has a few weeks in which to file a response to any defence. The IPEC does not expect or require written claims and defences to be legalistic; on the contrary, the less legalistic the better – as long as the statements ‘set out concisely all facts and arguments relied on. The case will be assessed on an issue by issue basis; therefore the court needs to know what all the issues are for that process to take place.’ For example, in a copyright infringement case the visual connection between the claimant’s original work and the defendant’s alleged infringing copy will invariably be the heart of the matter, and so it will be sensible to offer a concise narrative pointing up striking similarities/differences. Court fees payable by claimants vary according to the monetary value of the claim: around £35 for claims up to £300; and £200 for claims up to £5,000.
Swift and just resolution of run-of-mill low-value intellectual property disputes is the raison d’être of the IPEC’s small claims track procedure, and the court encourages parties at every stage to try to resolve their differences between themselves without the court’s involvement. Alternative Dispute Resolution can take many forms, and usually involves a neutral third party chosen by the disputants to talk through the issues and suggest amicable solutions: mediation/conciliation is always the first and best approach.
© Henry Lydiate 2014