News

A new law comes into force today that will give small and medium sized businesses easier access to justice to protect their copyright and trade marks. The Patents County Court (Financial Limits) Order (No.2) 2011 creates a clearer definition of which disputes involving copyright and trade mark claims should be heard in the Patents County Court (PCC) and which ones should go to the High Court.

The change will encourage more businesses to protect their intellectual property and enforce their rights. Evidence presented to the recent Hargreaves Review of Intellectual Property and Growth indicated that small and medium sized firms are dissuaded from enforcing IP rights because of the fear of high court costs.

A new damages cap of £500,000 for all claims in the PCC means small companies claiming damages up to that amount are less likely to face a potentially more expensive trip to the High Court.

Minister for Intellectual Property, Baroness Wilcox said: “A more accessible justice system will give companies greater incentive to protect and enforce their intellectual property rights. Making it easier for small firms and entrepreneurs to use the legal processes will give them more time to concentrate on business activities, innovate and support economic growth.“These changes provide clarity on the legal processes, certainty over the risks and give small enterprises the confidence to stand on an equal footing with financially stronger companies.”

Previously, a business with a legal case worth less than £500,000 could face litigation in either court with unknown levels of financial risk. An earlier Order, which came into force on 14 June 2011, had set the same limit in relation to patents and design cases.

The change in law will ensure that lower value, less complex cases, which would typically involve small businesses, will automatically fall within the jurisdiction of the PCC which has a less costly and more streamlined process. Therefore the risk of expensive disputes over where the case should be heard will be reduced.

In the past some companies were put off protecting their rights due to the uncertainty of how much it would cost. Supporting evidence to the Hargreaves Review of Intellectual Property and Growth highlighted that around one in five (17 per cent) of small and medium sized businesses had given up attempting to enforce their rights.

Support for a limit was expressed by small and medium sized businesses during a full public consultation on the reform of the PCC. The effectiveness of the damages cap will be monitored with a formal review in 2014.