England and Wales Patents County Court

IN THE PATENTS COUNTY COURT

		Rolls Building 7 Rolls Buildings London EC4A 1NL
		26 January 2012

Miss Recorder Michaels:

1. I am now asked to rule on the costs of these proceedings. It is common ground that the First/Fourth Defendants are liable to pay costs to the Claimant and that the Claimant is to pay costs to the Second, Third and Fifth Defendants. All such costs are to be summarily assessed in accordance with the practice of this Court and in the light especially of the judgments of HHJ Birss QC in Westwood v Knight [2011] FSR 37 and Indigo v Futurelook Ltd [2011] EWPCC 13.

Costs to be paid by the First/Fourth Defendant to the Claimant

2. The claim against the First and Fourth Defendants succeeded under sub-section 10(2) but failed under sub-sections 10(1) and (3). That partial success should, in my view, be reflected by an appropriate reduction in the amount of the Claimant's costs to be paid by the First and Fourth Defendants. A certain amount of time was taken at trial in dealing with the arguments relating to sub-sections 10(1) and (3), and some of the evidence on each side went to the issue of reputation, relevant to the claim under sub-section 10(3). On the other hand, the question of the extent of the Claimant's reputation in the Marks also was relevant to the claim under sub-section 10(2). Taking those matters into account, in my judgment a 20% reduction in the Claimant's overall costs would fairly reflect the level of success of the claim against the First and Fourth Defendants.
3. Mr Silcock indicated that he wished to show me a 'without prejudice' letter from his client to the First and Fourth Defendants, which, he said, would justify a claim by his client to indemnity costs from the date when the offer in that letter ought to have been accepted. However, he conceded that the schedule to the Claimant's Form N260 did not sufficiently identify the dates when particular costs had been incurred to enable me to deal with the point fairly, and he did not press the matter.
4. A major difference between the parties in relation to this aspect of the costs was that the Claimant said that he would (with a few specific exceptions) have incurred the same costs in bringing these proceedings to trial only against the First and Fourth Defendants, as he did against all of the Defendants, so that no reduction should be made in the costs payable by the First and Fourth Defendants by reason of his failure against the other Defendants. For example, Mr Silcock said that his brief fee would have been the same for the trial whether it had been brought against one defendant or five. Not surprisingly, it was contended on behalf of the First and Fourth Defendants that all the costs should be apportioned to reflect the level of success by the Claimant, and that it would be a fair result for the First and Fourth Defendants to be ordered to pay 40% of the Claimant's costs.
5. In my view, it is clear that some of the Claimant's costs of preparation for the trial will have related only to his claims against the Second, Third and Fifth Defendants. That must have been the case, for example, in relation to the preparation of his witness statement, which naturally dealt with the activities of the successful Defendants, as well as those of the First and Fourth Defendants. It must also have been the position in relation to the time spent in considering the three separate Defences filed by the parties, and the separate witness statements filed by the First, Second and Third Defendants. Doing the best I can, I think it appropriate to reduce the Claimant's overall costs by a further 20% to ensure that the sums payable by the First and Fourth Defendants do not include costs referable to the claims against the other Defendants. The same reduction should, I think, be applied to the fee paid to Mr Silcock for reviewing and advising the Claimant in conference as to the witness statement, because as I said above that statement included evidence relating to the successful defendants. However, I accept that the brief fee for attending the trial and taking judgment should not, for the reason given by Mr Silcock, be reduced further than to give effect to my decision in paragraph 2 above. So the witness statement fee will be reduced by 40% but the brief fee by 20%.
6. The Claimant acted as a litigant in person for most of the proceedings, having instructed Mr Silcock through direct professional access relatively close to trial. CPR 48.6 applies to his claim for costs, which provides in particular that:

" (2) The costs allowed under this rule must not exceed, except in the case of a disbursement, two-thirds of the amount which would have been allowed if the litigant in person had been represented by a legal representative.

...

(4)The amount of costs to be allowed to the litigant in person for any item of work claimed shall be –

(a) where the litigant can prove financial loss, the amount that he can prove he has lost for time reasonably spent on doing the work; or

(b) where the litigant cannot prove financial loss, an amount for the time reasonably spent on doing the work at the rate set out in the Costs Practice Direction."

The Costs Practice Direction provides:

"The amount which may be allowed to a litigant in person under rule 46.3(5)(b) and rule 48.6(4), is £18 per hour."

The rate of £18 per hour applies to work done after 1 October 2011. Prior to that date the sum was £9.25 per hour.

7. The Claimant set out his claim in part on a standard Form N260 and in part with a schedule of the hours spent by the Claimant in relation to the claim that the description of the work done. Although invited to do so, he did not provide me with a schedule in the standard form for this court, by reference to the stages of the claim set out in the relevant Costs Practice Direction. However, many of the items of work which he listed in his less formal schedule plainly relate to identified stages of the proceedings, so that it is clear to me that at no stage did his costs exceed the maximum for that stage.
8. In assessing the Claimant's costs, therefore, it is necessary for me to decide how much time he should reasonably have spent on doing items of work for which he claims recompense, with an overall cap of two-thirds of the amount which would have been allowed if he had been represented. Mr Dipré suggested that a number of the items of work could have been carried out in less time than the Claimant says he spent upon. That submission appears to me to be well founded:

a. The amount of time spent in the early stages of the action appears to be higher than is reasonable. For example, the Claimant claims 20 hours spent on "preparation of claim form documents, Particulars of Claim, etc," a further 12 hours preparation and travelling time and five hours in contacting, etc the Court. The hours spent on the claim form and Particulars of Claim seem to me to be much higher than is reasonable given the simplicity of both documents. I would reduce the 37 hours spent (it seems) before May 2011 to 25 hours.

b. The amount of time spent overall on preparation of the witness statement and exhibits. The Claimant puts this under two heads, 46 hours spent in preparation of the witness statement and exhibits, and a further six hours spent preparing witness statement are getting it looked at by Mr Silcock. The Witness Statement was 14 pages long and exhibited a full file of documents. In my view a reasonable amount of time to have spent in drafting the witness statement was 32 hours, and in taking advice on it, another 4 hours including travelling time.

9. In addition, the Claimant claimed disbursements and other expenses. Court fees and travel expenses totalled £1376. I do not think these should be reduced for the reasons given above. Copying and miscellaneous costs totalled £167 and Mr Silcock accepted that sum should be reduced to reflect his partial success; I will reduce this figure by 2/3 to reflect the numbers of Defendants, to £56.
10. Taking into account the reductions which I have decided should be made, or which the Claimant accepted were appropriate, the sums are reduced as follows:

51 hours pre 1/10/11 at £9.25 per hour = £471.75 x 60% £283.05

79 hours post 1/10/11 at £18 per hour = £1422 x 60% £853.20

Expenses £1432

Counsel's (reduced) fees £3,800 plus VAT at 20% £4560

Total £7028.25

Costs to be paid by the Claimant to the Second, Third and Fifth Defendants

11. I was told that the Defendants had all agreed with their solicitors that they would bear the costs of the action rateably between them, that is as to 20% per Defendant, despite the connection between the First and Fourth Defendants and the Third and Fifth Defendants and also the fact that the Fourth and Fifth Defendants were joined as parties only late in the proceedings. I will deal with the Second, Third and Fifth Defendants' claim to costs on the basis that all of the costs in the schedule provided to me are to be divided in that way and that the Second, Third and Fifth Defendants are entitled to 20% of those costs each, or 60% between them.
12. All of the claims against the Second, Third and Fifth Defendants failed and they are entitled to the whole of their costs, subject to assessment. The only item in the schedule provided to me which was seriously challenged by the Claimant was for a site visit by the solicitors; Mr Silcock queried the justification for such a visit and I agree with him that the reasons for having carried out such a visit are obscure. I will reduce the sum claimed under Stage 2 by 4.5 hours of the Defendants' paralegal's time to reflect this. All of the other figures claimed seem to me to be reasonable in terms of time and amount and again each of them is well below the maximum allowable under the Practice Direction in this Court. This produces the following table:

Stage of the claim	Maximum amount of costs	Total assessed costs	Assessed costs for each of the Second, Third and Fifth Defendants
2.Defence & counterclaim	£6,125	£2,585	£517
5. Attendance at a case management conference	£2,500	£762.50	£152.50
9. Preparing witness statements	£5,000	£2,012.50	£402.50
11. Preparing for and attending trial and judgment	£15,000	£3,675	£735
Total Plus VAT at 20% (which I am told these Defendants cannot reclaim)			£1,807 VAT = £361.40 Total £2,168.40

13. The Claimant's draft Order sought an Order that no sums be paid in respect of costs pending resolution of any appeal. I see no reason to make such an Order and I will order all sums awarded in respect of costs to be paid within 28 days, so by 5 p.m. on 23 February 2012.

Permission to appeal

14. The Claimant sought permission to appeal my decision (a) to refuse the claim against the Second, Third and Fifth Defendants under sub-section 10(2), and (b) to refuse to permit the Claimant to advance his claim in passing off against all of the Defendants.
15. The Claimant submitted that I had erred in my judgment in three ways in respect of point (a).
16. First and, I think, foremost, it was submitted that although I had set out the correct principles in relation to the global appreciation of likelihood of confusion for the purposes of sub-section 10(2), I had failed to apply those principles correctly, and in particular had not given sufficient weight to the decision of the CJEU in Case C-120/04, Medion AG v Thomson [2006] ETMR 13. The gist of Mr Silcock's submission was that once I had found that the dominant element of the Logo was contained in the Defendants' signs, Medion suggests that a likelihood of confusion must follow. I do not accept that submission as a matter of law. It is clear to me from the passage in the judgement of Arnold J in Och-Ziff, which I quoted at paragraph 33 of my judgment, that the existence of such a dominant element is an important factor in assessing the likelihood of confusion but does not displace the need to carry out a global appreciation of that likelihood, taking into account all factors listed. In my view that is what I did in this case and I do not consider that an appeal on this basis has reasonable prospects of success.
17. Secondly, it was submitted that I was wrong to treat the Claimant's evidence as to the overall turnover of his franchise operation with caution, where the evidence was unchallenged by cross-examination. However, it appears to me that in the context of a trial which takes place without oral examination of any witness, it is appropriate and indeed necessary for the Court to scrutinise the evidence before it as a whole, and where inconsistencies arise either between different witness statements or between witness statements and documentation, to give due account to those inconsistencies. Again, I do not consider that an appeal on this basis has reasonable prospects of success.
18. Thirdly, it was submitted that I was wrong to find that the evidence of reputation did not significantly affect the likelihood of confusion. This, however, appears to me to be a conclusion which again it was open to me to draw from the facts and I do not think that an appeal on this basis would have reasonable prospects of success.
19. On point (b), my rejection of the addition of the passing off claim, the Claimant relied particularly upon a letter which had been written by solicitors he had instructed in December 2009 which had raised the possibility of proceedings for passing off. I had initially understood that the letter had been sent to a predecessor in title of the Second Defendant, rather than to the Second Defendant himself. I corrected that error in the final version of my judgment, but the fact that the letter had been sent to the Second Defendant did not alter my conclusions. It appears to me that the approach which I took in paragraph 11 of my judgement was wholly justified in the circumstances and I do not think an appeal on this basis has reasonable prospects of success.
20. None of the points raised by the Claimant otherwise justify an appeal to the Court of Appeal.
21. The application for permission to appeal is rejected.