England and Wales High Court (Patents Court) Decisions

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URL: http://www.bailii.org/ew/cases/EWHC/Patents/2008/3026.html
Cite as: (2009) 32(2) IPD 32013, [2009] FSR 10, [2008] EWHC 3026 (Pat)

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		Neutral Citation Number: [2008] EWHC 3026 (Pat)
		Case No: HC 08 C02901

IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
PATENTS COURT

Royal Courts of Justice
Strand. London. WC2A 2LL

5/12/2008

B e f o r e :

MR JUSTICE ARNOLD
____________________

Between:

	RESEARCH IN MOTION UK LIMITED	Claimant
	- and-
	VISTO CORPORATION	Defendant
	And between:
	VISTO CORPORATION Part	20 Claimant
	- and -
	(1) RESEARCH IN MOTION UK LIMITED (2) RESEARCH IN MOTION LIMITED	Part 20 Defendants

____________________

Transcript of the Shorthand/Stenographic Notes of Marten Walsh Cherer Ltd.
6th Floor, 12-14 New Fetter Lane, London EC4A 1 AG.
Telephone: 020 7036 6000
email: info@,martenwalshcherer.com

____________________

MR ANTONY WATSON QC and MR THOMAS HINCHLIFFE
(instructed by Allen & Overy) for the Claimant and the Part 20 Defendants
MR ADRIAN SPECK (instructed by McDermott Will & Emery UK LLP) for the Defendant and the Part 20 Claimant

(Costs)
____________________

HTML VERSION OF JUDGMENT
____________________

MR. JUSTICE ARNOLD:

Visto now applies for the provision of the following information by RIM, that is to say, a statement of the costs incurred in these proceedings to date and an estimate of the costs likely to be incurred in the future. Visto accepts that the same information should be provided by itself

The primary basis for the application is what transpired in the previous proceedings between these parties. As I said in my earlier judgment, RIM was successful in invalidating Visto's '905 patent in those proceedings. There was subsequently argument before Floyd J as to costs which, as Floyd J observed in his judgment on costs in that case, revealed a very striking disparity between the costs that had been respectively incurred by the parties. Visto's costs of those proceedings were estimated to be of the order of £1.6 million, a figure which in all conscience is itself very high, yet RIM's costs were estimated to be nearly £6 million. As Floyd J observed, and I agree, that was a quite staggering disparity. As he also observed, and again I agree, it is astonishing that a sum of the order of £6 million can have been spent by RIM in fighting those proceedings.

In his judgment on costs, Floyd J stated that he was entirely satisfied that the sums expended by RIM were disproportionate in relation to what was at stake in the proceedings. Despite that, he found himself unable to make any specific order with regard to the level of costs which would have been proportionate, nor did he feel able at that stage to make any order capping RIM's costs.

Thus, the upshot of those proceedings was that RIM was found by Floyd J to have spent a sum by way of costs which he was entirely satisfied was disproportionate and which was massively greater than that spent by Visto, and yet his power to do anything about that situation was limited.

The case is a graphic illustration of the fact that the traditional approach to costs control of litigation in this country, which is after the event by way of an assessment of costs which limits the amount that can be recovered by the receiving party from the paying party, is inadequate and unsatisfactory. If we are to move to a system which better controls litigation costs, restricting ourselves to after the event remedies is unlikely to have the desired effect. A more proactive before the event approach is required.

Turning to the present case, Visto has expressed great concern that RIM will once again adopt the same approach that it adopted in the previous proceedings of leaving no stone unturned and, accordingly, racking up a massive bill of costs which, if RIM is successful, it will seek an order that Visto pays. Visto says it wants to be able to make informed decision as to whether the litigation is worth the risk in terms of costs. Accordingly, Visto submits that, given the previous history and given the likelihood that RIM will adopt a similar approach in these proceedings, it should be at minimum put in a position where it knows what source of sums of money RIM is contemplating spending.

Counsel for Visto makes no bones about the fact that the application for information may, depending on what it reveals if granted, be the prelude to an application for some form of costs capping order; but at this stage he submits that, whether or not such a costs capping order is appropriate in this case, it is surely appropriate that information should be provided.

In support of that submission, he points to the fact that it is a normal feature of litigation under the CPR for costs estimates to be provided as part of the allocation questionnaire. In patent cases that does not happen for the simple reason that all patent cases are automatically allocated to the multi-track and for that reason CPR 63 dispenses with the requirement to file allocation questionnaires. In that respect patent litigation is exceptional. In any other field, the provision of costs estimates is automatic and normal. He therefore submits that there is no good reason why a costs estimate should not be provided in this case and every reason why it should be.

The response of RIM to the application is to say, firstly, that after the event control of costs is adequate. Secondly, that it has taken due note of the comments made by Floyd J in his costs judgment in the previous case and it is proceeding accordingly. And thirdly, to submit that the provision of the information is not going to be of any particular assistance to Visto because simply knowing how much money is estimated to be spent does not protect it absent any costs capping or protective costs order. Moreover, RIM submits that it would be burdensome to require such estimates to be updated regularly and changes justified.

In my judgment, none of those reasons is a sufficiently good reason not to order the provision of this information. The question of a costs capping order is not before me today, and I express no view whatsoever as to whether such an order is appropriate or even may be appropriate. That is an entirely separate question, as I see it, to the question of whether the provision of costs information is justified. In my view, it is justified in order that Visto can know what its potential exposure is even on the assumption that no capping order is made.

For the reasons I have given, I do not regard after the event control as a sufficient answer, particularly in the circumstances where, absent the order sought by Visto, the parties would be operating in the dark as to each other's costs down to the costs argument after the trial. Nor do I accept the fact that RIM may be somewhat chastened as a result of Floyd J's comments in the previous case is a sufficient reason to withhold information that in any other class of litigation would be provided automatically.

Accordingly, for all of those reasons I will make an order for the provision of information by both parties as to the costs that they have incurred to date in these proceedings and as to their estimates of future costs down to the end of trial, that information on both sides to be split to the best of the parties' ability between the claim and counterclaim in respect of the three Visto patents and the claim in respect of the four RIM patents. At this stage, however, I am not going to make an order for those estimates to be updated or for changes in the estimates to be justified. That is a matter for subsequent consideration.