In 2013, supported by funding from the UK Research Councils, a research consortium called CREATe was established to examine creative production and the role of copyright in the digital age. One of CREATe’s projects, which I conducted, has been investigating IP enforcement in Scotland.
The project gathered and analysed data on Court of Session IP litigation conducted under the specialist IP procedure at Chapter 55 of the Court of Session Rules. Anonymised data were gathered directly from the physical court files for Chapter 55 IP actions initiated in the years 2008-2014. A survey and interviews with Scottish IP practitioners – solicitors and patent/trade mark attorneys – also provided important further insights and context on both formal IP litigation and broader IP enforcement activity.
Although there has been increasing research into IP litigation in other jurisdictions, there has been no similar research in Scotland until now. The detailed project data and research findings are discussed much more fully in the publications noted at the end of this article. Key points and some broader matters for reflection are highlighted here.
Chapter 55 caseload
There were 103 Chapter 55 IP actions initiated at the Court of Session in the period from 2008-2014, of which the court files were reviewed for 102 actions (one case file was not available for review).
At first glance, this IP caseload may seem relatively low. However, this figure does not include IP litigation initiated before 2008 which ran on into the period under review, some of which will have been substantial. The early years of the dataset also coincided with the 2008 financial crisis and its aftermath: the number of new IP actions commenced each year increased in later years.
IP litigation is well known for its legal and evidential complexity; for that reason case counts in themselves may not provide an accurate indicator of the amount of court time dedicated to this work. Interestingly, the practitioner survey and interviews indicated considerably higher levels of IP enforcement activity happening outside the formal court process, highlighting that the Court of Session’s IP caseload represents only part of the contentious IP business being handled by practitioners in Scotland.
IP claims in suit
Ninety eight of the 102 IP actions reviewed were started by rightholders in relation to alleged infringement of their IP rights; there were also three actions brought against the rightholder under the UK rules prohibiting the making of groundless threats of infringement, and one action seeking a declaration of non-infringement.
As might be expected given the jurisdictional grounds for pursuing an infringement action in Scotland (typically the domicile of the defender or place of relevant harm), over 90% of the rightholder-commenced infringement actions reviewed involved at least one defender located in Scotland. In contrast, just over half were brought by rightholders from outside Scotland. This suggests a significant degree of inward traffic in terms of IP litigation activity before the Court of Session, although it does not mean that Scottish IP rightholders were inactive: with choice of forum heavily influenced by the location of the alleged infringer, Scottish IP rightholders may have been more active in other jurisdictions if that is where infringement problems arose. Interestingly, the practitioner survey and interviews highlighted that Scottish solicitors specialising in IP are managing, and indeed in some instances directly conducting, litigations for their clients in other jurisdictions.
Around a third of the Court of Session infringement actions reviewed were brought by bulk enforcers – that is, large-scale IP enforcers such as collecting societies. Other, non-bulk claims were brought by rightholders from sectors as diverse as fashion, sport, transport, agriculture and professional services. Rightholders from the energy sector – renewables, and oil and gas – accounted for around 17% of the non-bulk infringement claims reviewed, the most heavily represented sector among non-bulk pursuers.
In terms of the spread of different IP rights engaged, the profile of the Court of Session’s Chapter 55 IP caseload in the time period reviewed was not unlike that of the English High Court, comparing the project data with data reported in the research by Helmers, Lefouili and McDonagh noted below. The least litigated IP rights (in terms of case counts at least, albeit probably not in terms of workload) were patents and designs. Claims for infringement of registered trade marks and/or passing off were considerably more common, with copyright the most litigated IP right. More than half of the IP infringement actions involving copyright were brought by bulk enforcers; few other copyright pursuers were from the creative industries, with non-bulk copyright claims tending to be more commercial (for example, involving technical or commercial material) than creative in nature.
Interim interdict – particularly important in IP cases because of the often irremediable damage caused by infringement – was sought in 60 of the 98 infringement actions reviewed, and was granted in 72% of those cases. Interim interdict was refused in only nine actions, with other motions resolved between the parties, often by provision of undertakings.
Data were also gathered on how far each of the concluded infringement actions reviewed had progressed at the time of its conclusion. As might be expected, the number of actions progressing through each procedural stage decreased steadily. Ultimately, a proof was appointed in only 13 of the 92 concluded infringement actions in the dataset (14%) and was only actually held in two cases (2%). There was a finding of infringement in favour of the pursuer in both of those cases. Around one-third of the concluded infringement actions in the dataset formally settled, typically by joint minute. Among other outcomes, decree in absence was granted in 11% of the concluded infringement actions reviewed; a significant further proportion simply ceased to progress (in terms of on-the-record activity before the court, at least) without any kind of formal disposal by the court, in many such cases after a decision on interim interdict early in the proceedings.
The project data highlighted parallels between IP infringement litigation at the Court of Session and elsewhere. The broadly similar profile of IP rights in suit between the Court of Session and English High Court is noted above. Another interesting parallel is in the rate of formal disposal of claims. Although the percentage of Court of Session IP infringement actions disposed of after proof may appear small, this is similar to data from other important IP jurisdictions: empirical research into US federal patent and copyright litigation has, for example, also highlighted low rates of disposal by judgment after trial (see the references below for more detail).
It is no surprise to see the energy sector, so important to Scotland generally, playing a large part in the Court of Session’s IP workload. That said, other areas of IP activity said to be important to Scotland in IP terms – the creative industries and life sciences, for example – were much less represented, or indeed (for the latter) not represented at all, across the cases reviewed.
There may, of course, be positive factors at play here – IP litigation being avoided through increased IP awareness or willingness to negotiate, perhaps. The location of alleged infringers will also be a factor, as noted above. However, the cost of litigation may also play a role, particularly for smaller businesses such as those typically active in the creative industries. There were also comments in the practitioner survey and interviews on the competition posed by courts in other jurisdictions, especially courts with well established reputations handling IP cases in particular fields of technology.
Some important observations on competition with the English courts in particular were made in the practitioner survey and interviews. There has recently been a wholesale – and high profile – reform of the lower-tier specialist IP English court, the Intellectual Property Enterprise Court (IPEC – previously called the Patents County Court), expanding its competence and introducing well-received procedural innovations such as strict caps on recoverable costs and streamlined procedures, including speedy trials. While it was noted that the Court of Session’s specialist IP procedures and IP judges make it a good forum for IP litigation, it was also observed that IPEC represents an attractive and highly marketable IP litigation proposition. There was clear appetite for further reform to the Court of Session’s IP rules – adopting measures along the lines of some of IPEC’s most popular procedural features, for example – to further increase the competitiveness of the Court of Session in the IP litigation marketplace.
J Cornwell, “Intellectual Property Litigation at the Court of Session: A First Empirical Investigation”, Edinburgh Law Review 21.2 (2017): 192-216 (doi.org/10.3366/elr.2017.0410) J Cornwell, “Between the formal and the informal: ‘repeat players’, ‘one-shotters’ and case trajectories in intellectual property infringement litigation at the Scottish Court of Session”, Civil Justice Quarterly (2017, forthcoming)
J P Kesan and G Ball, “How are Patent Cases Resolved? An Empirical Examination of the Adjudication and Settlement of Patent Disputes”, 84 Wash U L Rev 237 (2006)
C A Cotropia and J Gibson, “Copyright’s Topography: An Empirical Study of Copyright Litigation” 92 Tex L Rev 1981 (2013-14)
C Helmers, Y Lefouili and L McDonagh, “Evaluation of the Reforms of the Intellectual Property Enterprise Court 2010-2013” (2015, https://www.judiciary.gov.uk/publications/evaluation-of-the-reforms-of-the-intellectual-property-enterprise-court)
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