High Court considers factors for transfer to the Intellectual Property Enterprise Court

6 minute read
03 March 2016


The High Court has considered the factors to be taken into account for transfer to the Intellectual Property Enterprise Court (IPEC). In a judgment handed down last week, the court agreed with the Claimant (represented by Gowling WLG) that the case should stay in the High Court, dismissing the Defendants' application for transfer.

The judgment provides useful guidance from the court as to the factors it will take into account, and in particular the question of the degree to which the value of an injunction should be relevant, and the question of complexity.

Further, it is yet another judgment which reminds parties that if they litigate as though they are in the High Court they are likely to find themselves remaining in the High Court. If you want the streamlined process and costs and damages caps provided by IPEC you need to present a streamlined, capped case.

The dispute, between two businesses that the judge held could afford to litigate in the High Court, concerned trade mark infringement (UK and CTM) and passing off. The Defendants issued an application to transfer the case to the IPEC just before the costs and case management conference (CCMC) rather than at the time of filing their defence, which had the effect of postponing the CCMC to allow time for the transfer application to be heard. The application was heard by Master Clark.

Master Clark first referred to Paragraph 9 of the Civil Procedure Rules (CPR) at Practice Direction 30, which states that the court should have particular regard to the value of the claim (including the value of an injunction), the complexity of the issues, and the estimated length of the trial. This is supplemented by more detailed considerations in the IPEC Guide, at paragraph 1.3, and the recent Guidelines to Chancery Masters, published on 20 May 2015.

In considering the factors, Master Clark focused on the size and financial position of the parties, the value of the claim, and its complexity. Her positions on these three areas contain useful guidance for all those considering transfer on similar grounds and in particular where the damages claimed are not yet capable of being precisely identified.

Size and financial position of the parties

The Claimant was a large company, with a turnover in excess of £100 million. The Defendants were much smaller, with the principal defendant falling within the definition of a Small and medium-sized enterprise (SME) under European legislation (and confirmed by HHJ Birss QC in ALK-Abello v Meridian).

Both sides acknowledged that they could afford to litigate in the High Court, but this is a neutral factor (inability to afford to litigate in the High Court is a factor in favour of transfer, but the converse is not the case).

Value of the claim, including the value of the injunction

The Master found that the likely damages in the case, based on the Defendants' evidence, would be unlikely to exceed £50,000. If this were the only indication of value in the case then it would have been a "strong factor" in favour of transfer to the IPEC.

However, the true value of the case in the Claimant's eyes lay in the value of the injunction (as is so often the case with IP disputes). Assessing the value of the injunction is difficult in the context of parties where there is little or no commercial overlap. However, this does not mean that it is inevitably small with Master Clark noting that "Significant damage to the marks may be caused by their use in relation to products or services which are not in direct competition to those of the claimant".

Given the size of the Claimant's business and that the trade mark in issue is the name of the Claimant's business and used throughout it, Master Clark considered the value of the injunction to be substantial and justified the claim remaining in the High Court. The fact that there were around 60 trade mark opposition and cancellation actions between the parties around the world underlined the commercial importance and value of the dispute to both sides.

Complexity of the claim

Master Clark rejected the Defendants' position that the trial could be accommodated within the IPEC's usual two-day limit for a number of reasons.

First, the allegations spanned four different countries of the EU, and the Claimant sought a pan-European injunction. The fact that the five Defendants did not generally accept that they were jointly and severally liable for each other's acts meant that separate consideration would be required for the different jurisdictions.

Secondly, the Defendants had raised a "raft of factual and legal issues" in their defence and counterclaim. This led the Master to find that there was "much force" in the submission that the defendants had "chosen to defend the claim like a High Court claim". This was a reason for the High Court to retain the case, as it could not be dealt with properly using the streamlined procedures of the IPEC.

The Entertainer (Amersham) Limited v The Entertainer FZ and others ([2016] EWHC 344 (Ch)).

Gowling WLG acted for the Claimant.


NOT LEGAL ADVICE. Information made available on this website in any form is for information purposes only. It is not, and should not be taken as, legal advice. You should not rely on, or take or fail to take any action based upon this information. Never disregard professional legal advice or delay in seeking legal advice because of something you have read on this website. Gowling WLG professionals will be pleased to discuss resolutions to specific legal concerns you may have.