Lawyers welcome small claims track for IP cases – but warn that £5k limit is not enough

Heathcote Hobbins: easing the path to justice

Intellectual property (IP) specialists have welcomed the introduction of a small-claims track for the Patents County Court but said its limit will have to rise quickly.

Currently for cases with damages of up to £5,000, the track aims to provide copyright, trademark and unregistered design holders the option of pursuing basic disputes through an informal hearing.

The new procedure went live last month and is the product of the Jackson report – which identified the problem of high costs in IP disputes – and the subsequent Hargreaves review of IP, which recommended the small claims track. This process also led to the £50,000 costs cap in Patents County Court actions.

Business minister Michael Fallon said: “Lower legal costs will make it easier for entrepreneurs to protect their creative ideas where they had previously struggled to access justice in what could often be an expensive progress. A smarter and cheaper process is good for business and helping businesses make the most of their intellectual property is good for the economy.”

Julian Heathcote Hobbins, general counsel at the Federation Against Software Theft (FAST), welcomed the development. “It promises to ease the path to justice for smaller copyright holders that have been effectively frozen out of the traditional judicial system, which for them is unduly burdensome and complicated,” he said.

Robin Fry, a partner at DAC Beachcroft LLP and member of FLAG, added: “Intellectual property claims have, until now, been unfairly excluded from the small claims court, leaving many creatives, developers and designers adrift without a practical measure to prevent unlawful copying. The judicial system will soon realise that these kinds of disputes can, in many cases, be straightforward and that infringement can be readily identified. Once this is established, the current £5,000 cut-off figure must be raised significantly.”

Mr Heathcote Hobbins added: “Although, in the first instance, a limit of £5,000 seems sensible, keeping the threshold so low for the long-term may risk unfairly excluding many smaller software houses. It’s important that the threshold for claims adequately reflects the reality faced by software companies today, to enable them to resolve their disputes simply and cheaply and relieve the burden of these cases from the courts.

“To boot, the icing on the cake would be to be able to initiate the claim online akin the debt recovery service where claims are slam-dunk.”