Update: Only Fools Resist IPEC Transfer Application

11th December 2020 Intellectual Property

On 22 October 2020, JMW wrote about the recent judgment in the ongoing proceedings between Shazam Productions Limited and Only Fools The Dining Experience Limited. Our blog can be found here: https://www.jmw.co.uk/services-for-you/intellectual-property-solicitors/blog/do-only-fools-resist-ipec-transfer-applications and the judgment here: https://www.bailii.org/ew/cases/EWHC/Ch/2020/2799.html.

In summary, the proceedings, regarding alleged copyright infringement and passing off in relation to the well-known Only Fools and Horses sitcom, were transferred from the High Court to the Intellectual Property Enterprise Court (“IPEC”). On 8 December 2020, Master Teverson provided a further judgment in relation to the cost consequences following the transfer decision.

Until now, many Claimants who resisted transfers from the High Court to the IPEC had faced limited consequences. However, this decision provides an unwelcome legal precedent for Claimants who issue in the wrong court.

Transfer Application Costs

At paragraph 43 of Master Teverson’s transfer judgment, he expressed the provisional view, without having heard the parties’ arguments on costs, that the costs of the applications should be costs in the claim. However, the Master directed that if any party wished to argue for a different costs order, they must file and serve short written submissions on costs. The parties subsequently did so.

In Master Teverson’s costs judgment, in exercising his discretion as to costs in applications of this nature, considered that the starting point “must be that this was a contested interim application in which costs could be expected to follow the event”. In other words, the loser pays the winners’ costs.

Master Teverson ordered the Claimants to pay 50% of the Defendants represented by Brandsmiths, because “the critical evidence related to the financial position of the Second Defendant and indirectly that of the Third Defendant through her shareholding” was not originally provided by those defendants. As such, the Claimants were ordered to pay the Defendants the sum of £10,100.

The fourth defendant in the proceedings, Mr Mansergh, was provided with pro bono assistance by Philip Partington, JMW’s IP specialist partner. In addition to the aforesaid order, Master Teverson ordered the Claimant to pay 50% of Mr Mansergh’s costs of the application, because “the application of the Fourth Defendant could not be dealt with in isolation to that of the Brandsmiths Defendants”. The costs awarded included financial compensation for Mr Mansergh for the time he represented himself.

It is understood that the Claimant had incurred around £50,000 in resisting these applications, which eclipses the amount incurred by all Defendants. As a result of this costs decision, the Claimant will never be able to recover that sum, even if they were to ultimately win at trial.

Conclusion

Philip Partington, JMW’s intellectual property specialist partner, said of the decision:

“This case is becoming all too common in the field of intellectual property. Often, large companies are desperate to stay outside of the IPEC costs regime and will go to great lengths and costs (their own and that of their opponents) to resist transfer from the High Court to IPEC.

It is positive that Master Teverson seemingly agrees with my assessment of this case from September 2019, but it is disappointing that it has taken the parties and the court over a year to reach the same conclusion. This has caused great unnecessary expense to all concerned and has, frankly, been a waste of court time.

This case provides a precedent and a warning for Claimants who seek to bring proceedings in the wrong court.”

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Philip Partington is a Partner located in Londonin our Intellectual Property department

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