Court Fees - Do you know what to pay?

The IPKat is grateful for this piece penned by Andy Lee, Senior Associate at Brandsmiths.

Readers may recall that last September I contributed to an IPKat article on court fees which considered the possibility that a claimant in an IP case could pay the non-monetary issue fee at the commencement of proceedings (£480 at the time, now £528), and then if liability was established at the point of election, if damages were elected for, pay the monetary element of the court fee depending on the level of damages.  I suggested that if an account of profits were elected for then no further fee would be payable because there was authority that suggested such a claim was non-monetary. (Other IPKat articles on court fees are available)

The issue has now had direct consideration in an IP case (in which Brandsmiths are involved) by Master Clark: Lifestyles Equities CV & Anor v Sportsdirect.com Retail Ltd & Ors [2016] EWHC 2092 (Ch). The claim is for trade mark infringement but also inducement of breach of contract. We issued the claim on the basis I had suggested, and given an undertaking in the claim form to pay an appropriate fee if an enquiry was elected for. At the CMC the Defendant had asked for the claim to be stayed until (in its view) the correct fee had been paid. Master Clark asked for written submissions and a formal application which the Defendant then made.

In her judgment Master Clark decided that because there was a free standing contract claim, then a further fee should be paid. However, she then went on to consider the position as if the claim had been for trade mark infringement alone. She confirmed that an account of profits claim was a non-monetary claim (in line with Page v Hewitt). At paragraphs 15 and 16 she then said:

15. The Defendants' third argument was that even if an account of profits is a non money claim, the claim includes a money claim (damages) as an alternative, so that fee 1.1 is payable. I agree with Hildyard J that the Fees Order is not easy to construe, and the logic operating in the distinctions contained in it can be difficult to discern. I also agree with the claimant's counsel that it would be anomalous if a claimant with sufficiently early information about the defendant's activities to enable it to elect for an account of profits in its claim form could pay only the fee 1.5, but a defendant without that information must pay the higher fee. Further, the two forms of relief are not mere alternatives, but are mutually exclusive; and it is not until a claimant elects for an inquiry (which it may not do) that it can be said that its claim is to recover money

16. If, therefore, this claim had been only for trade mark infringement, then I would have held that the appropriate fee had been paid.

Master Clark’s key point was that until the claimant elects to pursue an inquiry as to damages no claim to recover money is brought. Owing to the split nature of IP claims this is not until liability is established, Island v Tring disclosure is provided, and an election made. Therefore, if there had only been a free standing trade mark claim the correct fee would have been paid.

This should therefore be the position with any IP claim because of the split nature. It will be interesting to see how this is applied in practice. As I mentioned in my first post, when the maximum fee was around £2100 it was unsurprising that this issue had not surfaced. However, once the fee was raised to £10,000 (for a claim over £200k) that was a significant rise in the cost of bringing a claim and potentially access to justice. That was even more so when a value of an IP claim is very rarely known at the start. Paradoxically, therefore, by raising the court fees to such an extent, the fee income may actually be reduced.