01 October 2005

Patent Litigation: IPAC was right

In paragraph 2 of its report on the Enforcement of Patent Rights, the government's own advisory committee on intellectual property wrote:

"A fundamental problem is that, although the "quality" of justice in the Patents Court is well regarded, cost compared with the rest of the EU is very high and, frequently, prohibitive for the SMEs and individuals. There are suggestions even that larger companies are increasingly taking their infringement litigation to other European jurisdictions on the grounds of cost. Why, then, is the London Patents Court so expensive? One reason is that the forensic approach to patent litigation
enabled by common-law-driven procedures in this country is out of step with the requirements of industry. We believe there is a good case
for changes to how the system works."

Elsewhere in its report, the authors say that the cost of litigation in England is up to four times higher than in the rest of Europe. One of the members of IPAC, Mandy Haberman, did some research and I have referred to that in my post here of 2 Sept 2005 "Patents: Why are there no British Names in the Patent Office's Top Ten?"

I have today come across an article on law.com by Henry Gotlieb entitled "Lawyers Seeing Fewer Trials and Less of Each Other" that suggests that IPAC was spot on. This is from the other great common law jurisdiction where civil trials have declined to the point where there is virtually nothing in the list. We are pretty close to that position here in England and Wales, at least so far as privately funded litigation is concerned. The reason? In common law countries such as England and the USA there is no upper limit to costs because parties select the issues, choose the evidence and agree whatever fees they like with their lawyers. In civil law countries, by contrast, the issues to be litigated and the evidence to be adduced are controlled by the court. In at least some jurisdictions, the amount of recoverable costs is linked to the value of the dispute.

Our common law system of truth finding may be a great bastion of civil liberty so far as criminal liability is concerned but it is no good for business, especially where the costs of determining a property right often exceeds the value of the property in the first place.

No comments: