It is generally acknowledged by contentious IP lawyers in the UK that the Intellectual Property Enterprise Court (IPEC) has been a real success as a forum for resolving IP disputes. This is due, in no small measure, to IPEC’s scale costs, which cap the costs recoverable by a litigant from their opponent, both in respect of particular stages of the litigation process, and in total. This reduction of risk around costs exposure has made the IPEC an attractive forum for many litigants with IP disputes. However, a recent IPEC ruling may well have upset the apple cart by challenging the conventional position on scale costs in IPEC where a party to IPEC proceedings makes a Part 36 offer. The ruling says that, where a Part 36 offer has been made, the usual costs consequences of not accepting the offer will trump the IPEC scale costs regime. This is a significant ruling, increasing as it does the potential extent of costs liability in the IPEC where Part 36 offers have been made. Parties contemplating proceedings in the IPEC should take note as their strategic approach to IPEC proceedings may well now have to change. We have prepared a note reviewing the ruling, analysing its likely long-term implications and providing some practical strategic guidance for IPEC litigants.
