Scottish IP court reform: not so bananas

Bill Gates famously said, “Intellectual property has the shelf life of a banana”.

If this suggests he is not a huge fan of intellectual property rights, that is certainly not reflected by Microsoft, the company in which he made his fortune. Microsoft has an enormous patent portfolio in excess of 100,000 patents and counting, with thousands of fresh patent applications made every year. That is a whole lot of bananas!

Intellectual property plays a hugely important role in the Scottish economy. It ensures our innovators and entrepreneurs can enjoy the fruits of their labours by being able to exploit and protect their ideas, designs and creative works for a certain period of time.

A 2019 study by the European Patent Office and EU Intellectual Property Office showed that companies which held and used intellectual property rights outperform those that do not. But ensuring intellectual property rights are in place is only one part of the picture.

It is of equal importance that we have an adequate forum for enforcing those rights in a cost effective way. If an SME has spent thousands in securing a trade mark or patent, that investment can be wasted if it does not have an opportunity to enforce that IP right against someone seeking to copy their ideas or brand.

Room for improvement

In Scotland, we can litigate over intellectual property in either the Court of Session in Edinburgh, or in the sheriff courts, depending on the type of IP rights or the sums involved. IP cases commenced in the sheriff court will be spread across the very many courts and sheriffs, meaning that, typically, experience and expertise of individual sheriffs will be less than it would be if such cases were concentrated in one place or with one group of sheriffs.

In the Court of Session, the four judges who deal with commercial work also handle the intellectual property caseload. There is a specific set of rules which apply to intellectual property cases, acknowledging the specialist nature of intellectual property rights. In my experience, the Court of Session can manage its intellectual property caseload very effectively. However, inspired by our innovators and entrepreneurs, we should and could do even better.

The need to improve is reinforced by the fact that our neighbours south of the border have a very successful court dedicated to resolving IP disputes for individuals and SMEs, called the Intellectual Property Enterprise Court or IPEC. Seeking to rise to the challenge, advocate Usman Tariq and I have made proposals for reform of the practice of intellectual property litigation in Scotland.

Putting Scotland ahead

Our proposals are intended to improve access to justice for those seeking to resolve IP disputes in which they are involved. That may be someone or a business seeking to enforce rights against someone who has infringed their rights, or for someone unfairly accused of infringing intellectual property by a large corporate, to give them a cost effective way of vindicating themselves. We published the proposals in an article called “The Scottish 'IP Court' – A Case For Reform?” 2020 SLT (News) 7.

The headlines are as follows:

• introduction of what is known as a “costs cap” of £50,000, meaning that the successful party in an intellectual property action can recover no more than £50,000 by way of court expenses or costs. This should offer a degree of costs protection for those wishing to litigate over IP disputes. That is, they would not risk unknown liability if embarking on an IP litigation;
• development of a simplified process for smaller IP claims, so that they can be dealt with, either by individuals or in a more streamlined way, with less legal jargon;
• nomination of a single IP judge so that all IP cases in the Court of Session go before one IP judge, who would have ownership for the conduct of these cases, and increase judicial management of cases coming before the IP Court;
• introduce an order equivalent to one they have in England called a Norwich Pharmacal order, which allows for identification of parties hidden behind social media profiles; and
• better promotion of the Intellectual Property Court in Scotland so that those with rights to enforce would be encouraged to use the court.

From a comparison, there are already a number of benefits to litigating intellectual property disputes in Scotland, as compared to England, such as that there is a lower cost regime, it tends to be less formal, and it is easier, quicker and cheaper to get cases brought into court. But we can always do better.

There are, of course, alternatives to the litigating over IP disputes, such as mediation and arbitration, and they do and will continue to play an important role. However, I would submit these cannot be a substitute to having an effective forum for resolving IP disputes within our court system.

The proposals for reform have already received welcome support from very many bodies interested in supporting this initiative in principle, including the Royal Bank of Scotland plc, the Scotch Whisky Association and the Harris Tweed Authority. If this is something which you or your business might wish to support, please do not hesitate to get in touch.