This is an informal case summary prepared for the purposes of facilitating exchange during the 2023 WIPO IP Judges Forum.
Session 7: Simplified or Fast Track Procedures for Certain Intellectual Property Claims
Patents County Court of England and Wales [2013]: Henderson v All Around the World Recordings Ltd & Anor [2013] EWPCC 19
Date of judgment: March 27, 2013
Issuing authority: Patents County Court of England and Wales
Level of the issuing authority: First Instance
Type of procedure: Judicial (Civin( �/span>
Subject matter: Copyright and Related Rights (Neighboring Rights); Enforcement of IP and Related Laws
Plaintiff: Jodie Henderson
Defendant: All Around the World Recordings Limited
Keywords: Performers’ rights, Neighboring rights, Costs cap, Departure from costs cap
Basic facts: On February 13, 2013, the Patents County Court (PCC) gave judgment for the claimant in this action, finding that the defendant’s release of a song called Heartbroken was an infringement of the claimant’s performer’s rights ([2013] EWPCC 7). The present judgment addresses the question of costs, and in particular, the exceptional circumstances under which a costs cap may be departed from.
The debate on costs raised some issues that are of general significance in the Patents County Court. Amongst other matters, the question of how to handle conditional fee agreement (CFA) success fees and after-the-event (ATE) insurance premiums arose. Counsel for the claimant argued that CFA success fees and ATE premiums were not covered by the PCC costs cap, while counsel for the defendant argued that they were covered.
Further, counsel for the claimant submitted that the Patents County Court has discretion to depart from the costs cap and that the Court should do so in this case because to do otherwise would be a denial of justice.
Held: The Patents County Court ordered the defendant to pay the claimant £52,484.25 in costs.
The PCC decided to award the claimant her costs of these proceedings subject to three points: the Court (i) awarded the defendant its costs of the misconceived copyright claim, (ii) awarded the defendant half its costs in relation to an application heard in January 2013 (technically three formal applications but treated as a single application), and (iii) made no order for costs in relation to a breach-of-contract claim arising from a record deal for a song called Pozer. These orders were to be put into effect by applying a set off before application of the stage limits.
Relevant holdings in relation to simplified or fast track procedures for certain intellectual property claims: Regarding whether CFA success fees and ATE premiums are covered by the PCC costs cap, the Patents County Court sided with the counsel for the defendant, finding that CFA success fees and ATE premiums are covered by the PCC costs cap. The Court held that under the definition provided in Rule 43.2(1)(a) of the Civil Procedure Rules (CPR), “costs” include any insurance premiums and CFA success fees.
The submission by claimant’s counsel that the Patents County Court has discretion to depart from the costs cap and that the Court should do so in this case involves two questions, i.e., whether the Court does possess such discretion, and if so, whether it should be exercised presently.
The PCC noted that under CPR Rule 44.3, costs—including amount—are within the Court’s discretion. The exercise of that discretion is strongly conditioned by the special rules about costs in the Patents County Court, but in the judgment of the Court, it has not been excluded entirely by the rules. The discretion exists, but to exercise it to depart from the cap in anything other than a truly exceptional case would undermine the point of the costs capping system. The PCC costs rules are intended to favor certainty as opposed to a fully compensatory approach to costs.
On the matter of whether the PCC should exercise its discretion to depart from the costs cap in the present case, the Court declined to do so, finding the case to be insufficiently exceptional to justify disapplying the cap, and agreeing with the defense counsel’s submission that a litigant who wishes to recover a reasonable proportion of the totality of their legal costs has a clear option available—to litigate in the High Court.
The Court noted that the point of the Patents County Court is to facilitate access to justice for smaller litigants in intellectual property cases. Here, the claimant wished to litigate in the Patents County Court to protect herself against the risk of an adverse costs award. The impact of the PCC cap on the claimant’s actual costs if she won was predictable. If the claimant had lost, the costs cap would have been strongly relied on. The claimant was thus able to enforce her intellectual property rights in this case because of the predictability of the costs cap remaining in place. Given the circumstances of the case, disapplying the costs capping system would create considerable and highly unwelcome uncertainty about costs in the PCC and would weaken access to justice for other litigants.
Relevant legislation:
The Civil Procedure Rules 1998