Brundle v Perry

On 6 March 2014 I handed down judgment in this action. At a subsequent hearing on 27 March 2014 I made an order dealing with, among other things, costs and dissemination of the judgment. These are my reasons in relation to those two matters.

The Claimant (“Brundle”) has succeeded both in relation to Brundle’s claim against the Defendant (“Mr Perry”) for groundless threats of patent infringement proceedings and in relation to Mr Perry’s counterclaim for patent infringement. The First Third Party (“Betafence”) has succeeded in relation to the additional claim brought against it for infringement of Mr Perry’s patent. Both Brundle and Betafence are entitled to an award of costs.

Brundle’s claim form is dated 12 March 2013. Brundle accepts that the costs it seeks should comply with the scale costs set out in ‘old’ Table A in Practice Direction 45, i.e. that table as it applied on 30 September 2013 (see Phonographic Performance Limited v Hamilton Entertainment Limited No. 2 [2013] EWHC 3801 (IPEC)). This is subject to a submission that scale costs should not apply at all, considered below.

On 20 December 2013 Mr Perry issued a claim form for additional claims under CPR Part 20. One of the claims brought by Mr Perry was in fact a counterclaim against Brundle for infringement of his patent. This was procedurally inappropriate but nothing turns on it. In addition Mr Perry’s claim form alleged that the two Third Parties, Betafence and Britannia Fasteners Limited (“Britannia”) had infringed Mr Perry’s patent. Britannia took no part in the proceedings. Betafence did and has won. Betafence now submits that it should be awarded costs based on ‘new’ Table A, i.e. that table as it has applied since 1 October 2013.

As Birss J stated in PPL v HamiltonNo. 2 (cited above) the relevant transitional provisions are found in paragraph 25 of CPR Update 66:

On one interpretation of that paragraph ‘proceedings’ is a collective term encompassing all claims, counterclaims and additional claims in a single piece of litigation. On that basis Betafence’s costs should be assessed by reference to the old Table A. But I think that would place too great a weight on the assumption that the draftsman of paragraph 25 of CPR Update was concerned with nuances of distinction between ‘proceedings’ and ‘claims’. In fact no such distinction is consistently applied in the CPR as a whole, see also Liversidge v Owen Mumford Ltd [2012] EWPCC 40; [2013] FSR 38 at [13], in which HH Judge Birss QC declined to adopt a strict distinction between a ‘claim’ and ‘proceedings’ (albeit in a different context) as those terms are used in the CPR.

I take the view that the rules on scale costs in the IPEC and the transitional provisions of paragraph 25 of CPR Update 66 were intended to reinforce the legitimate expectations of parties when they start a claim in the IPEC. If a claim form was issued before 1 October 2013 both claimant and defendant would have expected that the scale costs of old Table A would apply to that claim from start to finish. Where a claim form was issued on or after that date, including a claim form issued by a defendant in an existing action to bring an additional claim against a third party, the defendant and in particular the third party could properly expect the scale costs of that additional claim to be assessed according to new Table A.

I therefore accept that Betafence’s costs should be awarded according to new Table A, i.e. as set out in Section IV of Practice Direction 45.

As to quantum, it is sufficient to note that applying old Table A to Brundle’s costs I would award Brundle £34,525, including £15,000 for preparation and attending trial and judgment – the maximum stage payment. Applying new Table A to Betafence’s costs I would award Betafence £11,120. The costs incurred by Betafence in relation to trial and judgment were £8,587; I awarded £6,400, self-evidently well below the maximum stage payment of £16,000 in new Table A.

Brundle and Betafence argued that the costs cap and scale costs should not be applied at all in this case because of Mr Perry’s unreasonable behaviour. It was submitted that I should take this behaviour into account pursuant to CPR 44.2(4)(a). Brundle pointed to Mr Perry’s persistent use of intemperate language and expletives in his pleadings and in his skeleton argument for the trial. This is consistent with the way Mr Perry has expressed himself in emails sent to my clerk. I was told that Mr Perry was warned about his language by Mr Recorder Meade QC at an application before him on 16 May 2013. Before me Mr Perry, who appeared in person, accepted that he had been warned by Mr Meade and that he had chosen not to heed the warning.

Mr Perry’s unwise behaviour took another turn the day before the present hearing. On 26 March 2014 he sent an email to my clerk, to the chambers of counsel for Brundle and Betafence and to their respective instructing solicitors. In the email Mr Perry said he had received a letter, which he attached. The letter purported to come from me, was addressed to Mr Perry and was as follows.

“Royal Courts of Justice

Patents County Court

Rolls Building, Fetter Lane

London

sales@hmcts.fasteners.co.uk

Mr Richard Perry

19 Yerbury Street

Trowbridge, Wiltshire

BA14 8DP 26^th March 2014

Claim CC13P00980

Dear Mr Perry,

I have re-considered the case CC13P00980 and upon reflection; your opponents (FH Brundle, Betafence and Britannia Fasteners) having used your name on purchase orders for the infringing goods protected under your patent (which seems to be a fundamental point in the case), have colluded to defraud you of substantial sums of profits you were rightfully entitled to and therefore I have reversed my decision in your favour and award £5,000,000.00 in damages that would settle the claim in full.

I apologise that I did not even question your opponents on this issue or the matters concerning the manipulation of design sheets and copyright dates as at the time I didn’t think it was all that relevant.

I order the claimants and counter defendants to pay the claim in full within 14 days and the claim for unjustified threats is dismissed.

Mr Justice Hacon.”

I think the best that can be said about this purported letter is that for several reasons no one would take it seriously. My clerk was one of the recipients, so Mr Perry must have expected me to see it. When I asked him for an explanation at the hearing of 27 March 2014 he said that he still believed he had a credible case, mainly because his name had appeared on purchase orders and he wished me to understand what it was like to have his name misused.

I was told by Mr Baran, who appeared for Brundle, that Mr Perry’s name has never appeared on Brundle’s purchase orders. I have no reason to doubt what Brundle says about that but even if Mr Perry were right it would make no difference. His name on purchase orders was irrelevant to anything I had to decide at the trial. Likewise as I said in paragraph 13 of my judgment of 6 March 2014, unspecific complaints by Mr Perry regarding his designs also formed no relevant part of the trial.

A deliberate attempt to influence others by means of a forged letter from a judge would be an extremely serious matter. I think the purported letter circulated by Mr Perry, to my clerk among others, is better characterised as a further example of Mr Perry’s intemperate and eccentric behaviour in the conduct of these proceedings. The question I have to decide is what effect, if any, this behaviour should have on costs.

On the face of CPR r45.30-32 the costs regime in the IPEC, both the overall caps of £50,000 and £25,000 and the scale costs of Tables A and B, is mandatory save only for three exceptions. They are (i) where a party’s behaviour amounts to an abuse of process (r45.30(2)(a)), (ii) where the claim concerns a registered right which has earlier been certified as valid (r45.30(2)(b)) and (iii) where a party has behaved unreasonably in an application, in which case costs of an application may be awarded at the conclusion of the hearing and are in addition to other costs which remain subject to the £50,000 cap (r45.32 and r63.26(2); see also PPL v Hamilton [2013] EWHC 3467 (IPEC) at [17]).

In Henderson v All Around The World Recordings Ltd [2013] EWPCC 19; [2013] FSR 42 HH Judge Birss QC ruled that the overall discretion given to the court by CPR 44.3 in relation to costs (now CPR 44.2) also applied in the Patents County Court (and therefore applies now in the IPEC) but the exercise of that discretion is strongly conditioned by the special rules as to costs in the PCC. The discretion to disregard the overall caps and the scale costs of Tables A and B exists, but the court should only depart from them in a truly exceptional case. I respectfully agree. CPR 45.30(3) expressly excludes rule 44.2(8) from the assessment of costs in the IPEC; by implication the remainder of rule 44.2 still applies although, for the reasons given by Judge Birss, it will be truly exceptional for this to have the consequence that the overall caps and scale costs are set aside. However Judge Birss clearly had in mind both disregarding the scale costs and, more significantly, lifting the overall cap. The overall cap has more significance because the predictability it provides to litigants in the IPEC is more important than that afforded by scale costs for stages in the claim. I think it is open to the court not to apply scale costs for one or more stages of the claim while still keeping the total award within the overall cap. This will seldom happen but it does not require the truly exceptional circumstances necessary for the overall cap to be disregarded (leaving aside an abuse of process or an earlier certification of validity of a registered right).

I accept that CPR 44.2(4)(a), as expanded upon in rule 44.2(5), allows the court to have regard to the conduct of the parties when assessing costs. Mr Perry’s conduct has been strikingly unusual but not, in my view, truly exceptional on the scale of unsatisfactory behaviour. It is open to me in the present case to take Mr Perry’s conduct into account if this does not give rise to a total award in costs above £50,000. I believe that in the light of Mr Perry’s conduct of this action taken as a whole, culminating in the purported letter from me of 26 March 2014, it is appropriate to award an additional £2000 in costs to be paid each to Brundle and Betafence. The total to be paid to Brundle is therefore £36,525 and to Betafence £13,120. The combined total is £49,645.

In Samsung Electronics (UK) Ltd v Apple Inc [2012] EWCA Civ 1339; [2013] FSR 9 the Court of Appeal ruled that the power of the court to order dissemination of a judgment is not confined to judgments in which an intellectual property right is found to have been infringed. I have no doubt that there is jurisdiction in the present case to grant such an order. Brundle submits I should do so. It relies principally on an email from Mr Perry dated 25 June 2012 to an Indian supplier to Betafence and Britannia of the Nylofor 3D fence brackets in issue, alleging that the brackets infringe Mr Perry’s patent.

I have to assume that Mr Perry will not be in breach of the injunction granted against him as part of the Order and if so emails of that type will not be repeated. However Mr Perry’s tendency towards an unrestrained response to anything he does not agree with, whether coming from the court or his competitors, suggests to me that he might wish to find ways to colour the clear finding I have made that Nylofor 3D brackets do not infringe his patent.

Brundle sensibly did not seek an inquiry as to damages resulting from Mr Perry’s unjustified threats of infringement proceedings. Brundle submitted that I should nonetheless award a sum in damages and, I think plucked from the air, suggested £500. I declined to do so. There is no evidence of any damage and in this instance anyway I do not think it is appropriate to guess at a sum on the basis that there may have been some sort of damage.

That said, I believe that Mr Perry’s threats, the email to the Indian supplier and the possibility that Mr Perry may have sent other such communications is likely to have led to uncertainty in the marketplace as a consequence of which Brundle and Betafence may yet suffer.

In Samsung Jacob LJ said this:

“[69] … I am far from saying that publicity orders of this sort should be the norm. On the contrary I rather think the court should be satisfied that such an order is desirable before an order is made – otherwise disputes about publicity orders are apt to take on a life of their own as ancillary satellite disputes. They should normally only be made, in the case of a successful intellectual property owner where they serve one of the two purposes set out in art. 27 of the Enforcement Directive and in the case of a successful non-infringer where there is a real need to dispel commercial uncertainty in the marketplace (either with the non-infringer’s customers or the public in general).”

The reference to ‘art. 27’ of the Enforcement Directive (Directive 2004/48/EC on the enforcement of intellectual property rights) is a typo; it should read ‘recital 27’ which states:

“[27] To act as a supplementary deterrent to future infringers and to contribute to the awareness of the public at large, it is useful to publicise decisions in intellectual property infringement cases.”

Brundle submitted that the following notice should be published in Fencing and Landscaping News:

“On [date] the Intellectual Property Enterprise Court within the High Court of Justice of England and Wales ruled that FH Brundle’s sale of the Nylofor 3M Fence Panel, and the Nylofor 3D Fence Brackets, did not infringe UK Patent Number 2 390 104 owned by Mr Richard Perry. Accordingly, the Court ruled that threats made by Mr Perry of patent infringement proceedings against FH Brundle were unjustifiable.

A copy of the full judgment of the Intellectual Property Enterprise Court is available at the following link:

http://www.bailii.org/ew/cases/EWHC/IPEC/2014/475.html”

I think this is one of the cases contemplated by Jacob LJ in which commercial uncertainty needs to be dispelled. The foregoing notice will be published at Mr Perry’s expense.

Mr Perry stated his intention to seek permission to appeal from the Court of Appeal. (I had refused permission on the ground that the appeal would have no real prospect of success). The order will therefore be stayed pending the outcome of the Mr Perry’s application for permission to appeal and, in the event that permission is granted, pending the outcome of the appeal.