Small and medium size enterprises have always been reluctant to enforce their Intellectual Property Rights because of the cost of taking action. In fact, according to the Hargreaves Review of IP and Growth, one in six SMEs have given up enforcing their Intellectual Property Rights due to the fear of escalating costs. It is a problem that will hopefully be improved by the end of 2012 if the government’s plan to introduce a small claims service in the Patents County Court is successful.
Under the current system in the Patents County Court, there is fixed costs liability of £50,000 and maximum recoverability of £500,000 in damages, but this is still a wholly unrealistic proposition for most SMEs given the disproportionate costs. In theory a business with a legal case worth less than £5,000 could still face costs of up to £50,000 to get a judgement against an infringer.
The Intellectual Property Office has recently announced plans to introduce a small claims service in the Patents County Court. The damages awarded will be limited to £5,000 and the costs will also be limited at a low figure (not yet announced). Given that a lot of small businesses hope for a final injunction to prevent future infringement (as opposed to seeking damages), the low costs of achieving this through the small claims service make it a highly attractive proposition. This will make it much easier for SMEs to protect their copyright, trade marks and designs.
Minister for Intellectual Property Baroness Wilcox said “This is great news for small and medium sized businesses as it will give them the confidence to stand up and protect their intellectual property rights. A small claims service means businesses will not have to fight through lengthy court battles instead of concentrating on growing their business. A strong intellectual property system will enable innovative small companies to grow.”
The small claims service is expected to be up and running by the end of 2012. Figures produced by the Intellectual Property Office estimate that around 150 firms will benefit from the service every year, providing an annual boost to UK business of £350,000.
Richard Jones Business Development Team
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