Link UP Mitaka Ltd trading as Thebigword v Language Empire Ltd
| Jurisdiction | England & Wales |
| Judge | Melissa Clarke |
| Judgment Date | 17 October 2018 |
| Neutral Citation | [2018] EWHC 2728 (IPEC) |
| Docket Number | Claim No: IP-2017-000049 |
| Court | Intellectual Property Enterprise Court |
| Date | 17 October 2018 |
[2018] EWHC 2728 (IPEC)
HER HONOUR JUDGE Melissa Clarke
Sitting as a Deputy Judge of the High Court
Claim No: IP-2017-000049
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
INTELLECTUAL PROPERTY LIST (ChD)
INTELLECTUAL PROPERTY ENTERPRISE COURT
Rolls Building
New Fetter Lane
London
Mr Nick Zweck (instructed by Virtuoso Legal) for the Claimant
Mr Richard Carter (instructed by JMW Solicitors) for the Defendants
Hearing date: 10 October 2018
JUDGMENT ON COSTS
INTRODUCTION
On 10 October 2018 I handed down my judgment following the trial of an inquiry into damages payable to the Claimant in respect of its losses suffered as a result of the Defendants' trade mark infringement and passing off by setting up, maintaining and using two websites which were specifically designed to capture potential customers searching online for the Claimant's services, provided under the trade marks ‘thebigword’ (“the Websites”) ( [2018] EWHC 2633 (IPEC)). The Defendants' liability to pay damages arose from a judgment in default being entered against them, the Defendants having failed to file an acknowledgment of service or a defence to the Claimant's claim. Following that handing down, I heard submissions on costs and consequential orders. The Claimant sought an award of costs, interest and an order for publication of the judgment.
In relation to costs, the Claimant contended that the Defendants' conduct in the proceedings was so exceptionally unreasonable that: (i) it amounted to an abuse of process such that the ordinary IPEC scale costs, which are subject to specified phase caps and an overall cost cap for a quantum inquiry of £25,000, should not apply; and (ii) costs should be awarded on the indemnity basis.
I agreed with the Claimant and disapplied the IPEC scale costs. I also summarily assessed the Claimant's costs on the indemnity basis at £98,260 plus interest of £1446.98, being £99,706.98 in total. I dealt with the summary assessment and other consequential matters (including making an order for publication of the judgment, and dealing with an issue in relation to offers of settlement which I determined in favour of the Defendants) for reasons which I gave orally during the hearing. However, I decided to provide my reasons for disapplying the IPEC scale costs scheme in writing, in order to do justice to the quality of the written and oral submissions on the point made by Mr Nick Zweck for the Claimant, and Mr Richard Carter for the Defendants, and because there is likely to be wider interest in this decision, which is a rare one in this court. These are my reasons.
The applicable rules
The IPEC scale costs scheme is set out at Part 45, Section IV of the Civil Procedure Rules (“CPR”) (“Scale Costs Scheme”).
The scope of Section IV is set out in CPR 45.30, which provides:
45.30 (1) Subject to paragraph (2), this Section applies to proceedings in the Intellectual Property Enterprise Court.
(2) This Section does not apply where –
a) the court considers that a party has behaved in a manner which amounts to an abuse of the court's process;
b) the claim concerns the infringement or revocation of a patent or registered design or registered trade mark the validity of which [has been previously certified]
(3) The court will make a summary assessment of the costs of the party in whose favour any order for costs is made. Rules 44.2(8), 44.7(b) and Part 47 do not apply to this Section.
(4) “Scale costs” means the costs set out in Table A and Table B of the Practice Direction supplementing this Part.
As well as the two exceptions contained in CPR 45.30(2), the mandatory application of the Scale Costs Scheme is subject to the Court's discretion to award additional amounts above the costs cap in respect of applications where a party has behaved unreasonably ( CPR 45.32).
Where the Scale Costs Scheme does not apply, for example because the court finds that a party has behaved in a manner which amounts to an abuse of the court's process, then the general rules about costs found in Part 44 apply. These include the wide ranging discretion as to costs contained in CPR 44.2, and the rules relating to assessment of costs contained in CPR 44.3, CPR 44.4 and CPR 44.6.
Authorities
Counsel have been unable to locate any IPEC authority in which the Scale Costs Scheme has been disapplied under CPR 45.30 for a party's abuse of process. Mr Zweck has found a reference at 9–046, page 349 of Intellectual Property Enterprise Court: Practice and Procedure by Angela Fox, 2 nd edition (London, Sweet & Maxwell 2016) to such a decision being made by His Honour Judge Birss QC (as he then was) in an unreported costs decision of unknown date in a case called Xena Systems v Cantideck. HHJ Birss QC's previous judgment in the same matter following the inquiry into damages for patent infringement can be found at [2013] EWPCC 1, [2014] F.S.R., but Mr Zweck has been unable to locate a written judgment, transcript or law report of the costs judgment. Ms Fox described the ratio as follows:
“…the defendants failed to give certain required disclosure and stated in pre-inquiry correspondence with the claimant's solicitors that the total number of infringing platforms was 17 rather than 38 which was the later, corrected figure supplied. There was no adequate explanation for these failures and the court concluded that the defendant's conduct rose to the level of an abuse of process. Consequently, r.45.30(2) was engaged and the costs caps and limits were disapplied. The court ordered the defendants to pay the claimant's full assessed costs of the inquiry on the indemnity basis, and although at the parties' agreement these costs were summarily assessed it appears that the court could have allowed detailed assessment if the claimant had sought it.”
I have also made enquiries, which have been unsuccessful in locating a judgment or transcript. Ms Fox's reference is therefore a useful pointer to such a decision being made, but takes me little further.
Mr Zweck submits that the Court's power to determine whether a party's conduct is abusive of its process is a very broad one. I accept that it is. He identifies Lord Diplock's statement in Hunter v Chief Constable of the West Midlands Police [1982] A.C. 529 at page 536C as the classic statement on the subject:
“My Lords, this is a case about abuse of the process of the High Court. It concerns the inherent power which any court of justice must possess to prevent misuse of its procedure in a way which, although not inconsistent with the literal application of its procedural rules, would nevertheless be manifestly unfair to a party to litigation before it, or would otherwise bring the administration of justice into disrepute among right-thinking people. The circumstances in which abuse of process can arise are very varied; those which give rise to the instant appeal must surely be unique. It would, in my view, be most unwise if this House were to use this occasion to say anything that might be taken as limiting to fixed categories the kinds of circumstances in which the court has a duty (I disavow the word discretion) to exercise this salutary power.” (my emphasis)
Lord Diplock's statement was recently cited with approval in the Supreme Court by Lord Clarke, who referred to it as ‘classic’ and ‘much-followed’, at paragraph 35(ii) of his judgment of the court in Fairclough Homes Ltd v...
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