Off the Scale Costs in IPEC- With Wise Ltd. v Wise Payments Ltd.
On 17 July 2025, I discussed Recorder Amanda Michaels's judgment in Wise Payments Ltd v With Wise Ltd and others [2025] EWHC 1722 (IPEC) (11 July 2025) in Trade Marks - Wise Payments Ltd v With Wise Ltd. In that article, I noted that those proceedings were unusual in that the trial in that action and counterclaim lasted more than two days and involved more than the average number of interim applications.
One of those applications was brought by With Wise Ltd. and its directors for permission to amend their defence and counterclaim to seek the revocation of trade mark number UK3346396 for non-use under s.46 (1) (a) of the Trade Marks Act 1994. The application was heard by His Honour Judge Hacon on 13 Dec 2024 (see Wise Payments Ltd v With Wise Ltd and others [2024] EWHC 3448 (IPEC) (13 Dec 2024)). His Honour dismissed the application because CPR 63.23 (2) permits parties to submit material in addition to the issues identified in the first case management conference only in exceptional circumstances. He could see no good reason why With Wise could not have made its application sooner. Were he to allow the amendment it could overload an already heavily-loaded three-day trial. He was not convinced that allowing the amendment would satisfy the court's cost/benefit test. There was nothing to stop With Wuse and its directors from applying for the mark's revocation in a separate action.
That is precisely what happened. With Wise issued a claim seeking revocation of UK3346396 for non-use on 19 Dec 2024. On 3 March 2025 Wise Payments responded with an application to strike out With Wise's claim on the grounds that it was an abuse of the process of the court. With Wise filed evidence in response to Wise Payments's strike out application and issued its own application for a speedy trial of its revocation action. Both Wise Payments's strike out application and With Wise's application for expedition were due to be heard on 14 July 2025.
Meanwhile, Recorder Michaels tried Wise Payments Ltd v With Wise Ltd and others [2025] EWHC 1722. She found that UK3346396 was partially invalid because the specification had been too wide and had to be amended but she also held that the mark as amended had been infringed. After reading her judgment Wise Payments withdrew its strike out application.
The usual consequence of the withdrawal of an interim application is that the applicant has to pay its own and the respondent's costs. In the Intellectual Property Enterprise Court CPR 46.20 (1) limits the amount of costs that can be ordered against an unsuccessful party subject to certain exceptions. CPR 46.21 (3) provides that the maximum amount of scale costs that the court will award for each stage of the claim is set out in Practice Direction 46. Para 11.1 of PD46 provides two tables, namely Table A and Table B. Those tables set out the maximum amount of scale costs which the court will award for each stage of a claim in the Intellectual Property Enterprise Court. Table A sets out the scale costs for each stage of a claim up to determination of liability. The maximum amount that may be awarded for making or responding to an application in Table A is £4,000.
Now £4,000 does not even begin to cover the costs of preparing for a strike out application, especially not when leading counsel is instructed. One of the exceptions to CPR 46.20 (1) is CPR 46.20 (2) (a) which provides that CPR 46.20 (1) does not apply where the court considers that a party has behaved in a manner which amounts to an abuse of the court’s process. This exception was considered by Mr John Kimball KC in Photobooth Props Limited and another v NEPBH Ltd and others [2022] EWHC 1634 (IPEC) (27 June 2022):
"[24] As to Link UP Mitaka Limited trading as Thebigword v Language Empire Limited, Yasar Zaman [2018] EWHC 2728 (IPEC) I accept the submission that this case draws a distinction between the 'truly exceptional circumstances' required to lift the overall scale costs and mere 'unreasonable conduct' which is sufficient to justify the lifting of the cap for one or more stages of the claim.
[25] I have considered the summary of the case law on unreasonable conduct in relation to applications for the purposes of CPR 63.26 (2) as summarized in paragraphs 9 – 059 – 9-061 of Fox, The Intellectual Property Enterprise Court: Practice and Procedure (3rd edition 2021). It is it seems to me possible to distil the following four points:
a. The mere fact that an application fails is not in and of itself evidence that the applicant was unreasonable to bring it.
b. The bringing of a truly groundless application may amount to unreasonable conduct.
c. 'Unreasonable conduct' under r.63.26 (2) is not concerned with the behaviour or attitude of the parties generally, but rather with their behaviour in and towards the process of the court.
d. Behaviour that only forms part of the general 'cut and thrust' of litigation is unlikely to be regarded as unreasonable for the purposes of r.63.26 (2)."
On 14 July 2025 With Wise asked for the costs limitation to be disapplied and sought off-the-scale costs pursuant to CPR 46.20 (2) (a) on the grounds that the strike out application had been hopeless and was intended as a delaying tactic. Wise Payments replied that it had not abandoned its abuse of process argument but had renewed it in its defence. Any manoeuvring had been no more than the general cut and thrust of hard-fought litigation. It urged the court to reserve the costs to the trial judge.
The learned recorder acceded to Wise Payments's urging at para [17] for the following reason:
"Any finding on costs would inevitably comment on the substantive merits of the strike out application and might pre-empt the parties' arguments at trial, assuming that Wise Payments does, in fact, raise the abuse of process point as part of its Defence."However, she appears to have reached her decision with some reluctance, for she said in the next paragraph:
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