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How to enforce intellectual property rights in Scotland

How to enforce intellectual property rights in Scotland

How to enforce intellectual property rights in Scotland

Whilst almost all substantive IP legislation and case law applies in Scotland the same as it does in the rest of the UK, the court procedure for enforcement of those intellectual property rights is very different.  

In this guide, we will explain some of the peculiarities of enforcing intellectual property rights in Scotland. Hopefully, we can provide you with an overview so that when you need to enforce IP in Scotland, you are aware of the main issues to consider and pitfalls to avoid.    

Of course, we are more than happy to elaborate on these points either as part of a presentation which we could run for your team, or you should feel free to just pick up the phone to discuss any queries.

In which court are intellectual property rights enforced in Scotland?

All significant intellectual property rights litigation is conducted in the IP Court in the Court of Session in Edinburgh, part of the Supreme Court of Scotland. The Court of Session is a combination of the High Court and Court of Appeal. The IP Court is part of the “Outer House” of the Court of Session and is a court of first instance. The Court of Session also includes our court for civil appeals, the Inner House.   

We have a relatively new set of rules for the IP Court intended to achieve a more streamlined dispute resolution process, which we understand is more akin with what English practitioners would expect from the IPEC. Typically, within six weeks of serving the court summons (the equivalent of the claim form and particulars of claim, but in one document), parties will be in front of a specialist IP judge. The IP judges are expected to take a “hands-on” approach to the early case management of disputes and will expect to see progress being made at each hearing.  

In addition to the Court of Session, we have sheriff courts attached to each major town in Scotland, much like the English County Courts. While almost all actions enforcing registered intellectual property rights will commence in the IP Court in the Court of Session, cases for copyright infringement and passing off can be raised in the sheriff court. The level of IP experience will vary greatly across the sheriff court system.

  • Absence of pre-action Protocols

Through conversations with English IP litigators, we are aware of the somewhat onerous obligations in England to comply with the relevant practice notes concerning pre-action protocols. While we acknowledge there are certainly benefits to having the position fleshed out in pre-action correspondence (particularly if defending an action) there are often occasions when a party wishes to raise proceedings quickly.

In this context, the system in Scotland is considered rights holder-friendly as there are minimal pre-action communications requirements in this jurisdiction. While the IP judges would expect that a party asserting an IP right should first notify an alleged infringer, they are unlikely to face any consequences if they do not do so.  

The lack of pre-action requirements also sits well with managing the groundless threats present in intellectual property rights cases, and judges will often understand the need to circumvent these risks by raising proceedings at an early stage without extensive claim letters being sent.

  • Interim Orders and how to avoid being caught out

As in England, the Scottish IP court is well used to considering applications for injunctive relief. In Scotland, an injunction is called an interdict.  

One of the principal differences between Scotland and England is that in Scotland it is often likely that an interim interdict will be granted ex parte.  There is also no requirement to provide a cross-undertaking in damages (although if at the end of an action it is proved that the interdict has been wrongly granted, it is likely that damages for wrongful interdict will follow).  

To prevent an interim interdict from being granted without warning, it is important that a caveat letter is filed with the court. A caveat is a warning device. It is a legal document lodged in court on behalf of a party (known as the “caveator”) so that certain interim orders, as set out in the caveat, cannot be granted without prior notice being given.  The court must be satisfied that all reasonable steps have been taken to afford the caveator an opportunity of being heard before any such order is granted.  If a caveat is not in place, the first your clients will hear of the order is when the process servers arrive at their door to enforce it.

A caveat can be lodged on behalf of an individual or company in the Court of Session or any sheriff court in Scotland. Which sheriff courts are chosen will depend on the places where potential actions may be raised.  We would always advise brand holders from whom we act to file caveats in the Court of Session at least, and can provide further information on the filing of caveats, if that is of interest.

Discovery vs Disclosure

One of the things that English based IP lawyers find most surprising about the court system in Scotland is that we have no equivalent to discovery. In this jurisdiction there is no blanket obligation on a party to a litigation, to disclose documents to their opponent.

There is no doubt that this brings a cost saving, but it can be frustrating for rights holders who want to access evidence of wrongdoing and/or infringement but which is not easily obtainable in Scotland. This issue was identified in the Intellectual Property (Enforcement, etc) Regulations 2006 (giving effect to Directive 2004/48/EC on the enforcement of IPR) with Scotland specific provisions to allow for disclosure of information in IP cases.

One way around this is for the intellectual property rights holder to apply to the Scottish IP Court for an order requiring any other person in Scotland (not just party to the action) to produce documents and/or property during the course of the action. One note of caution is that the Court will not authorise a “fishing expedition” and before a document recovery order is granted, the rights holder must show that the documents/property are relevant to their claim as presented.

A document recovery order can be sought at any time after defences have been lodged and before the proof (trial). The timing of the request of the order will normally be driven by tactical or commercial considerations.

The person that is believed to have the documents (the “haver”) may not produce them voluntarily. If that happens, they can be called to appear at a hearing where they will have to answer questions, under oath, about which documents exist, and where they are. At that stage, all documents within the possession of the haver, that fall within the order, must be produced – even if they are adverse to that party’s case. A commission is a useful way of getting a witness’ position “on record” in advance of trial.

The haver may claim that they are confidential. If that is the case they should lodge the documents in court in a sealed envelope, so that the court can decide whether they should be disclosed. Documents recovered in this way can only be used for the purposes of the litigation and must otherwise be kept confidential.

The absence of disclosure in Scotland makes applications for a “dawn raid” order (the Scots equivalent of a Search and Seizure Order) more likely to be of benefit and in our experience the IP Court is probably more willing to grant such an order in Scotland, compared to England.

"Without prejudice" - not an open and closed case

Although almost all IP law is the same in Scotland as it is in the rest of the UK, there are areas of difference in procedure and evidence. An area that often causes some confusion amongst English IP litigators is the operation of the Scottish application of “without prejudice” privilege. No doubt many IP lawyers will send “without prejudice” correspondence across the Border, in both directions, without necessarily giving thought to the differences in the law of evidence between the two jurisdictions. There are a few pitfalls for the unwary.

In Scotland, we do not typically send open and closed correspondence. It is more typical in Scotland to issue a single letter with the expectation that any privileged content will be redacted if the correspondence is produced in court. Instead of prominently labelling letters “WITHOUT PREJUDICE” or “WITHOUT PREJUDICE, SAVE AS TO COSTS” Scots lawyers insert a “without prejudice” docket hidden at the end of each letter. That docket will state, although the letter is written on a “without prejudice” basis, that privilege can be waived by the party on whose behalf it has been sent and then founded upon. Unlike the practice in England, there is no express qualification in relation to costs, but that is implied. Of course, if that letter contains content in which the other side can claim privilege that cannot be waived and must be respected.

From discussions with England based IP lawyers, we understand the ability to unilaterally waive your own “without prejudice” privilege is a significant difference between our jurisdictions and is something that English lawyers should be aware of if corresponding in cases which might be subject to the jurisdiction of the Scottish courts. The practical effect is that a party may choose to produce in court their own privileged communications – something which English IP lawyers might not realise until the document is before the court!

Cost and timescales

"How much will it cost and how long will it take?" If I had a £1 for every time a client asked me that at the commencement of a court action!

Of course, it is an entirely appropriate and reasonable question, which any sensible client should be asking before embarking on the litigation journey. While you would be able to answer this question with laser-precise accuracy in respect of English proceedings with the “benefit" of the Jackson costs budgeting reforms, you may be less clear of the position in Scotland. We thought it might be helpful to provide you with a summary of the position in Scotland should your clients ever need to consider enforcing their IP north of the border.

Court fees

One significant difference between our jurisdictions relates to the charge imposed by the court to begin an action. We are aware that recent increases to court fees in England have caused quite a lot of debate and controversy, and in some cases we understand the charge can be as high as £10,000. In Scotland, we have a flat signet fee of £310 for all actions in the IP Court, no matter what value. As such, if your client needs to raise an action for tactical reasons or to manage "groundless threats" risks, and has the choice of raising in Scotland or England, the relatively insignificant court costs of commencing proceedings in Scotland are attractive.

Cost Budgeting (or lack of)

We are aware that the operation and implementation of the Jackson Reforms have caused significant issues for English practitioners. Jackson does not apply in Scotland and there is currently no equivalent of cost budgeting in this jurisdiction. The Taylor Report has recommended a similar regime to Jackson but nothing has yet been put in place. As such, there is no judicial involvement in the budgeting of costs (known here as expenses) in the IP Court.

Given the lack of scope for recovery of pre-action costs, rights holders in Scotland often choose to have stronger claims brought into court more quickly to "trigger" the recovery of expenses. Whilst we would typically involve our internal law accountant in providing a detailed breakdown of costs involved in each stage of litigation, not having to agree that with the other side certainly appears to make it easier to have an action commenced in the IP Court as compared to the High Court.

Timescales

Our understanding is that whilst IPEC was initially a speedy dispute resolution forum boosted by Sir Colin Birss' impressive work rate, its growth in popularity has caused some congestion issues with the average duration of cases taking more than a year. Indeed, the attraction of the High Court for Russian oligarchs and big pharma has caused a degree of congestion there also. Feedback from clients engaged in UK wide IP enforcement is that the Scottish courts can compare favourably on this front.

Certainly without pre-action protocols and discovery, getting an action off the ground and into court appears to be quicker in Scotland than in England. If a rights holder's objective is to secure interim orders this can be a significant advantage. However, in more complex cases we have found that the Scottish court process delaying document recovery, less judicial specialist expertise and relatively light-touch judicial management can mean that these cases will take longer to resolve as compared with such complex cases in England.

Costs/Expenses - Recovery

The awarding of expenses in Scotland is entirely at the discretion of the court. The general rule in Scotland is the same as in England in that expenses follow success. A successful party in Scotland would likely recover 50% of their spend on solicitors and 100% of their spend on counsel.

The Rules of the Court of Session provide that a higher than normal rate of expenses can be recovered in specific circumstances if, for example, the case is of sufficient importance to the successful party or if the unsuccessful party's conduct (or the conduct of its solicitor) has been particularly blameworthy.

We do not have an equivalent of the IPEC's court cap and appreciate that this is popular with clients considering embarking on enforcement of their intellectual property rights.

By Colin Hulme
Partner

ChrisA