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	England and Wales Patents County Court
You are here: BAILII >> Databases >> England and Wales Patents County Court >> Liversidge v Owen Mumford Ltd & Anor [2012] EWPCC 40 (20 September 2012) URL: http://www.bailii.org/ew/cases/EWPCC/2012/40.html Cite as: [2012] 6 Costs LR 1076, [2012] EWPCC 40

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IN THE PATENTS COUNTY COURT

		Rolls Building 7 Rolls Buildings London EC4A 1NL
		20/09/2012

His Honour Judge Birss QC:

1. In the main judgment in this action ([2012] EWPCC 33) I decided that the defendants' product did not infringe the claimant's patent and that the patent was invalid. Among the consequential orders to be made were orders concerning costs. A point of principle arose concerning the application of the capped costs system in the Patents County Court to the facts of this case. I heard the parties' argument on the point and informed the parties of my decision at the hearing. That allowed the effect of the decision on the actual costs order to be sorted out then and there. This judgment contains my reasons for the decision. There will be no need to attend its handing down.
2. At this hearing James Abrahams appeared for Mr Liversidge instructed by Field Fisher Waterhouse. Anna Edwards-Stuart appeared for Owen Mumford instructed by Manches and Charlotte May appeared for Abbott instructed by Herbert Smith.

The problem

3. At the conclusion of the case each defendant filed its own bill of costs. This is not surprising since each defendant incurred its own costs. The two defendants had been separately represented at all times in this case. They filed separate defences, instructed separate solicitors and separate counsel. In substance the points made by both defendants were the same and at trial Daniel Alexander QC, for Abbott, made all the submissions on the merits.
4. Although the points of substance made by each defendant were the same, there were points on which their interests were capable of diverging. Owen Mumford did not supply finished articles to Abbott. At least in theory it might have been the case that Abbott infringed but Owen Mumford did not, although the commercial consequences of this outcome would have been the same. Conversely it was at least conceivable that Owen Mumford might have infringed under s60(2) of the 1977 Act by supplying parts even though Abbott's final product did not fall within the claim. None of these points were live in the end but they show that no criticism could be levelled at the defendants for being formally separately represented as they were albeit that they made common cause.
5. Taking each of the defendant's costs bills relating to the proceedings in the Patents County Court and conducting a summary assessment in the usual way, and taking into account PCC costs stages (see Westwood v Knight ([2011] EWPCC 11)) produced total figures of about £36,000 for Owen Mumford and £38,000 for Abbott. In addition there were some costs incurred by Abbott in relation to the High Court but they were dealt with separately and do not have a bearing on the issue I am dealing with (see Westwood v Knight, para 13).
6. On that basis the defendants submitted I should order the claimant to pay about £36,000 in costs to Owen Mumford and £38,000 to Abbott, making a total outlay of about £73,000. However Mr Abrahams submitted I should not make that order because it would be a breach of the rules. He submitted that the most his client should be ordered to pay was one set of PCC scale costs, which are capped at £50,000.

The CPR

7. The relevant provisions of the CPR are VII of Part 45 and in particular r45.42, as follows:

VII Scale Costs for claims in a patents county court

Scope and interpretation

45.41 (1) Subject to paragraph (2) this Section applies to proceedings in a patents county court.

(2), (3) ….[ immaterial ]

(4) "Scale costs" means costs as defined in rule 43.2(1)(a)

Amount of scale costs

45.42 (1) Subject to rule 45.43 the court will not order a party to pay total costs of more than –

(a) £50,000 on the final determination of a claim in relation to liability; and

(b) £25,000 on an inquiry as to damages or account of profits

(2) The amounts in paragraph (1) apply after the court has applied the provision on set off in accordance with rule 44.3(9)(a).

(3) The maximum amount of scale costs that the court will award for each stage of the claim is set out in the Costs Practice Direction.

(4) The amount of the scale costs awarded by the court in accordance with paragraph (3) will depend on the nature and complexity of the claim.

(5) [immaterial]

8. Section 25 C of the Costs Practice Direction then sets out tables of the scale costs for each stage of a claim up to the determination of liability and for each stage of an inquiry as to damages or account of profits.
9. Mr Abrahams submitted that CPR r45.42(1)(a) meant what it said. The court "will not order a party to pay total costs of more than (a) £50,000 on the final determination of a claim in relation to liability". He submitted that the order sought by the defendants would violate that rule. Mr Abrahams submitted that the purpose of the rule was to facilitate access to justice for smaller and medium sized enterprises in intellectual property litigation. To achieve this objective the costs orders the court might make were capped so that a litigant knew in advance that, subject to certain well defined exceptions such as abuse of process and unreasonable conduct, the litigant would not be ordered to pay more than £50,000 in total costs if he lost the case.
10. As a separate point Mr Abrahams also suggested in argument that in this case the defendants did not need to have incurred separate costs and that there was unnecessary duplication. I can reject that point without going into detail. I am satisfied there was no unnecessary duplication in this case. The parties were jointly represented at the CMC, served a joint statement of their case on obviousness and instructed a single expert witness. At trial the points of substance were dealt with as a single set of submissions. I also bear in mind the Court of Appeal's judgment in Bristol Myers Squibb v Baker Norton Pharmaceuticals [2001] RPC 1 concerning a patentee fighting validity and infringement against two defendants.
11. Ms May submitted that the £50,000 cap provided for by Pt 45 applied to a "claim" and that in this case although it was one proceeding, it consisted of two "claims". Thus for each "claim" - Liversidge v Owen Mumford and Liversidge v Abbott, the order sought would be within the £50,000 cap.
12. The issue is closely related to the question I had to decide in Gimex v Chillbag [2012] EWPCC 34. At the time I heard Liversidge v Owen Mumford the judgment in Gimex was not available. Ms Edwards-Stuart pointed out that the present case is not the same as Gimex. In Gimex the claimant won whereas in this case the defendants have won. While in a case like Gimex, the winning party had the choice as to how many defendants to join in the proceedings and had the ability to control its costs exposure in that respect, in a case like this the opposite is true. Why, she asked rhetorically, should a successful defendant be penalised in costs by being awarded a lower sum than it would ordinarily be entitled to merely because the claimant has chosen to sue other parties in the same proceedings. To construe "total costs" as submitted by Mr Abrahams would put multiple defendants at an unfair and arbitrary disadvantage.

My decision

13. Ms May's submission is that the rule refers to the final determination of "a claim" and that the answer to this problem can be found in the manner in which the CPR uses the word "claim". It is true that in some places in the CPR the word claim is used to refer to different claims in a single proceeding which was started by a single claim form, with a "claim" against one defendant and a separate "claim" against another defendant. But the expression is also used in a similar way to refer to separate claims brought against the same defendant. If Ms May's submission were right then a claimant with two claims against a single defendant would be entitled to two cost caps. I do not believe that is correct and I reject this submission. Moreover if one took a formalistic approach to the rule then a normal case for infringement of a registered right like a registered design or patent, which consists of a claim for infringement and a counterclaim for revocation, could be regarded as two claims for the purposes of the rule. I do not think that is right. In my judgment the claim referred to in r45.42(1) means a single set of proceedings.
14. The points raised by Ms Edwards-Stuart are attractive however in my judgment Mr Abrahams' submission is the right one. First, the terms of r45.42(1) are clear. Subject to the exceptions which do not apply, the total costs a litigant can be ordered to pay in proceedings in the Patents County Court is £50,000. An order that Mr Liversidge had to pay £73,000 would breach that rule. Second, thinking about the considerations relevant to the Patents County Court supports that conclusion. I addressed this in the Gimex judgment. The competing factors are an emphasis on a compensatory approach to costs on the one side, which is what the defendants emphasise here, and certainty for litigants in the PCC, which is what the claimant emphasises. For the reasons I gave in Gimex, I think the balance of these factors comes down in favour of certainty when one takes into account the purpose for which the PCC was set up. A certainty about one's future costs exposure is a key part in facilitating access to justice for SMEs.
15. I do not wish to underplay the concerns raised by Ms Edwards-Stuart. They are serious matters. However I believe they are all issues which can be foreseen at an early stage in the proceedings and raised at the case management conference. It may be that on some cases the fairest and most cost-effective way to proceed in a multi-defendant case will be to allow the claim to proceed against one defendant alone and stay the action against the other pending the trial. It may be that other approaches will be appropriate. If a claimant appears to be joining a number of defendants into one case in order to try and take unfair advantage of the costs cap when the defendants ought to be in separate proceedings, that is a matter which can be considered. This case and the Gimex case both illustrate that the interaction between cases with multiple defendants and a system of cost capping throws up potential difficulties. They will need to be dealt with on a case by case basis.
16. One point I do not accept in full is the submission that it is simply a matter for a claimant to arbitrarily add defendants in an action. It is true that the claimant chooses who to sue but there are usually good reasons why multiple defendants are named in proceedings. For example in this case, it made sense for Mr Liversidge to join both Owen Mumford and Abbott since the case involved the operation of the Humira Pen which was designed and made by one and sold to the public by the other.
17. Rule 45.42(1) is distinct from the PCC costs rules providing for the costs of various stages in the litigation (r45.42(3) and (4) and Section 25C of the Costs Practice Direction). Those rules about stages still apply. In many smaller cases, once the costs are properly assessed, each separate defendant's costs will be low enough that an order that the claimant pays them both in full would not breach r45.42(1).
18. In this case, when each defendant's costs were assessed based on a normal PCC summary assessment, the results were the figures mentioned above. Given that the limit on the costs order to be made is £50,000, this raises the problem of how that sum should be apportioned between the defendants, a problem which would not arise on the defendants' interpretation of the rule. However it is not insurmountable and I do not regard it as sufficient to say that r45.42(1) cannot be applied as it stands. In any event in this case the defendants informed me they would agree how to share it out between themselves.
19. I conclude that r45.42(1) protects the paying party and means that the court cannot award total costs of more than £50,000 in the Patents County Court.