Intellectual property is the crown jewels of creative businesses. Being able to protect the same helps to enable small businesses to grow. Unfortunately traditionally the cost of doing so was often prohibitive to small and medium sized entities and as such even blatant infringements such as direct copying went unpunished which in itself encouraged further infringement. This was recognised as an unsatisfactory position and has now been addressed by the introduction of a “small claims court” for intellectual property cases – which comes into effect on 1 October 2012. Court rules have been amended to create a small claims “track” in the Patents County Court for claims which relate to trade marks, copyright, passing off, unregistered design rights and certain other intellectual property rights. The amended rules specifically do not relate to registered designs or patents and as such claims made in relation to these rights will not be allocated to the small claims track.
In broad terms a claim will be allocated to the small claims track if the claim value is less than £5,000 and the defendant does not successfully challenge the allocation. In any event for many rights holders it is not the value of the claim which is important but stopping the ongoing infringement which can be achieved through a claim allocated to the small claims track.
The main advantage is that although it is possible for costs to be awarded in the small claims track these are tightly controlled and as such Claimants do not have to fear being faced with the risk of high costs orders if they do not succeed in their claim. It is often this fear, even if the risk is low, which deters businesses from bringing a claim. Moreover, the cost of issuing a claim is low and in straightforward cases (which is what the small claims track is designed to handle) Claimants may even wish to represent themselves although they would be well advised to seek at least an initial opinion from an intellectual property specialist first as to the strength of their case. Further, parties can request that the claim is decided “on the papers” and without the need for a formal hearing.
The small claims track is certainly not suitable for all cases but for some cases it will provide small and medium sized companies with the ability to protect their creative efforts in a way that previously was not commercially possible.