England and Wales Patents County Court

IN THE PATENTS COUNTY COURT

		Claim No: CC12 P 00501 The Rolls Building 7 Rolls Building Fetter Lane London EC4A 1NL
		18/07/2013

Mr Recorder Richard Meade QC:

1. On 20 June 2013 I gave judgment in this action. I dismissed the claim on the basis that the copyrights in issue were assigned to the Defendant or alternatively that it had an exclusive licence. I rejected two other grounds of defence, namely laches and a point under the Sale of Goods Act.
2. There was a Part 20 Claim which petered out during trial in circumstances I describe further below.
3. At the parties' request I gave them time to try to resolve costs by agreement, subject to the back-stop that if they could not agree then they should put in written submissions by 3 July 2013.
4. The parties did not agree. The Defendant and the Part 20 Defendant each put in costs statements and submissions and complied with the deadline of 3 July 2013. The Claimant responded to the Defendant's submissions on 17 July 2013.
5. This is therefore my judgment in writing on the issue of costs, based on submissions on paper and without an oral hearing.
6. I intend to deal with the costs so far as possible on the basis of Section VII of Part 45 of the Civil Procedure Rules. In Westwood v Knight [2011] EWPCC 011 HHJ Birss QC as he then was explained the general approach to their application.
7. In the present case, the parties have not followed those rules or that guidance completely, in particular in that the Part 20 Defendant's costs breakdown does not follow Table A (to some extent this may be because that Table does not specifically provide for Part 20 Claims).
8. In keeping with the observations of HHJ Birss QC in Indigo Furniture Ltd v Futurelook Ltd & Anor [2011] EWPCC 13 it seems to me that it would be wrong actually to disallow costs for this non-compliance, and in view of the small size of the claim it would also be disproportionate to ask the parties to redo or expand their submissions. So I intend to follow the spirit of the rules and guidance, exercising caution not to make any overpayment in doing so.
9. First, I must deal with the question of the overall winner.
10. In relation to the main claim there is no doubt about this: the claim failed and the Defendant is the winner.
11. In relation to the Part 20 Claim the position is more complex. The Defendant bought the business within which the alleged infringement took place from a company related to the Part 20 Defendant (which is an Australian company).
12. The Part 20 Claim was brought as a matter of form as a sort of indemnity. Service of the Part 20 Claim was extremely slow and complicated and, no doubt, expensive.
13. At trial, it appeared that the purpose of the Part 20 Claim was not really to seek an indemnity but to get information from the Part 20 Defendant: the Defendant wanted to try to trace documents relating to the terms on which the Claimant undertook the photographic commission in the course of which the copyright works the subject of the claim were created. This did not succeed, I suspect because the documents were no longer to be found.
14. Against this background, during the argument at trial I asked what the Defendant actually sought to claim from the Part 20 Defendant, and was told that since all possible information now appeared to have been obtained, nothing was claimed. On that basis and to save costs, the Part 20 Defendant's representative left the proceeding.
15. There is now an attempt in the Defendant's costs submissions to argue that while it was not positively claiming anything from the Part 20 Defendant, it maintained a contingent claim in case it lost the main claim. This is clearly not what happened at trial; I was not told that that was the Defendant's position, and had it been then the Part 20 Defendant would not have left.
16. In my view it was not an appropriate use of the Part 20 procedure to pursue the claim for what amounted to third party disclosure and, without going into the extensive detail, I also consider that the Part 20 Defendant would have provided reasonable assistance (albeit probably without great fruit in the end) without being sued.
17. I therefore hold that the Part 20 Claim fails and/or was discontinued and, further, whatever the formal position I would make the Defendant pay the costs of it.
18. I turn to the costs of the claim. The Defendant won and the issues on which it failed were minor and not such, in my view, as to justify any reduction or set-off.
19. Somewhat confusingly, the Defendant's costs summary is in two parts. The first conforms largely to Table A and totals £17,325. The second is entitled "Details of Costs" and totals £20,400. The difference is attributable to the Table A "cap" since £9,200 is said to have been spent on the Defence and Counterclaim, but that is capped in Table A at £6,125.
20. I will proceed from the Table A schedule.
21. The main issue on these costs appears to me to be same in relation to all the Table A categories, and it is that all the Defendant's work was done by its General Counsel Mr Krull. His time is charged at a rate of £400. This is justified on the basis that it should be an hourly rate commensurate with "that of an equivalent solicitor in private practice", and reference is made to one of the Defendant's external advisers.
22. Even assuming for the moment this equivalence so as to arrive at the rate, I cannot accept that it was necessary to use someone of the level of General Counsel to defend a one day trial for about £11,000. I also cannot see that it was justified for Mr Krull to undertake all the work himself: there should have been some delegation.
23. Mr Dawe also points out that Mr Krull claims 10 hours for having sent or received 185 emails and five hours dealing with correspondence. This seems excessive and appears to have been rolled into the cost of drafting the Defence and Counterclaim.
24. I also think, although it is a more minor point, that Mr Krull's time for trial preparation was on the high side. Further, it does not appear that Mr Krull's time on the case has been apportioned so that the Claimant does not have to pay for the work on the Part 20 claim. This is clear from the fact that 7 hours are claimed for the trial, which is the entire duration in Court even though time was spent on the Part 20 Claim. Similarly, the 16 hours of trial preparation looks very much like the total time for all aspects of the trial.
25. Doing the best I can, and taking the rates charged by the Part 20 Defendant's solicitors as some sort of guide, I will reduce Mr Krull's rate to £275 (lower than Mr Lingard to allow for the lack of delegation) and reduce the time spent by 25% at each stage. This amounts to giving the Defendant just over 50% of its costs, in total £10,518.75.
26. Turning to the costs of the Part 20 Claim, these are not presented in line with Table A but I believe I can generally identify against which items in Table A to assess the costs.
27. Drafting the Part 20 Defence is claimed for at £2,764. This forms part of total pre-trial costs of £6,208.50. I cannot tell how much of the other approximately £3,500 was attributable to drafting and so recoverable, and I do not think I should assume that all of it was. I will assume that half was. That leaves £4,500 as being in principle recoverable for the pleading stage. I think that as with the Defendant there was rather too much reliance on the more senior and expensive fee earners so I will reduce this to £3,750.
28. As to the trial costs, these amount to £9,337.50. This was well within the Table A allowance, but I do not see the need to have had two fee earners in attendance for the whole trial, and as with Mr Krull the total preparation time for Mr Lingard seems high, especially since his involvement was limited to the Part 20 Claim. Taking these factors into account I assess the trial costs at £6,000, giving a total of £9,750.
29. I did consider whether I should make a further allowance for the fact that some of the costs within the Part 20 Defendant's total must have been associated with seeking to provide information voluntarily so as to avoid a claim. However, those will have been included in the non-pleading pre-trial costs which I have already excluded.
30. Mr Dawe seeks time to pay. He says he can pay £5,000 soon and would like to pay the rest by selling his house or by instalments over two years. Mr Dawe gives virtually no details to support this and because he filed his costs submissions at the very last moment the Defendant has had no time to comment.
31. Following my judgment at trial the parties were hopeful they could agree costs. That has not happened, but it may yet be hoped that time for payment can be agreed. It seems wrong to me to leave things floating though, and so I will order that Mr Dawe is to pay £5,000 within 28 days, and the rest, i.e. £5,518.75, within 28 days after that. I give him permission to apply to vary the order so as to provide for instalments, and I urge him and the Defendant to seek to agree a schedule. My decision to give Mr Dawe this shorter time to pay the residue is not to be taken as an indication one way or another as to whether he would succeed in any application to vary.
32. The Defendant is to pay the costs of the Part 20 Claim within 28 days.