This article was produced by Olswang LLP, which joined with CMS on 1 May 2017.
The IP Enterprise Court ("IPEC") continues to develop the principles established by the Patents County Court. The Patents County Court was reformed in 2010 to make it suitable and attractive for lower value IP disputes. Four years later, with a new name, the Court continues to champion fairness and greater access to justice for small and medium-sized firms.
Bocacina Ltd v Boca Cafes Ltd & Others was the first judgment of IPEC and a related judgment about costs (in the same case) was the first of 2014. The case highlights the different strategies you may be able to deploy in IPEC to assist you resolve your IP disputes at lower cost.
The dispute was a straightforward passing off case suitable for IPEC. The Claimant (Bocacina Ltd) had run a successful and trendy bar, restaurant and gallery in Bristol called "Bocabar" since 2005. The Bocabar was well-known in the area. The Claimant had also previously operated 2 other food businesses in Bristol - a delicatessen called "Bocacina" and a restaurant called "Bocanova".
In 2012, the Defendants (Boca Cafes Ltd and 2 individuals) opened a café and bistro in Bristol called "Boca Bistro Café". The Boca Bistro Café was about 3 miles from the Bocabar. The Claimant commenced proceedings against the Defendants for passing off.
A key feature of proceedings in IPEC is active case management at a Case Management Conference. The Court will manage the case in a manner which is proportionate to the complexity and value of the case. In passing off cases, one of the key issues is often evidence of confusion. In this case, the Claimant had referred to a list of instances of confusion. Whereas proceedings in the High Court would usually involve cross-examination of the allegedly confused individuals, in this case, the Court decided that it would be disproportionate to require further evidence and cross-examination from the individuals themselves.
After the CMC, the parties took advantage of another tool available in IPEC - preliminary non-binding opinions on the merits of the case. The parties requested such an opinion and the Court indicated that the claim was likely to succeed. This may have prompted the Defendants to re-brand their cafe to "Bica Bistro Café", but the parties were unable to settle the proceedings and the case went to trial.
At trial, the Claimant succeeded in its claim for passing off. The Claimant had established it owned goodwill in the words "Bocabar" or "Boca", and the goodwill and reputation extended throughout Bristol and the surrounding area. The Court found that given the similarity of the names, the proximity of the businesses and the similarity of the food and services offered, there was a likelihood that a significant number of people would be confused into thinking that the businesses were connected.
Damages and Costs
As a successful claimant in an IP infringement case, you would be entitled to: (1) choose between damages or an account of profits in respect of the infringing activity; and (2) costs of up to £50,000 for liability (and £25,000 for the damages inquiry) in IPEC. In this case, the Court directed that the Claimant was entitled to apply for an inquiry as to damages or an account of profits, provided that it could show that the financial sums involved would justify such a procedure. The Court was keen to avoid the parties incurring further costs for minimal sums.
After the trial, the Court also sought to minimise costs by inviting the parties to make submissions on costs in writing. Costs were dealt with "on paper" without a hearing. The Defendants relied on the fact that they had made an offer to settle the proceedings, at an early stage, shortly after service of the Particulars of Claim. They had offered to cease using the name "Boca" and re-brand. The Claimant said it rejected the offer because the Defendants asked for up to 9 months to complete the re-branding and the offer did not include any financial contribution towards the Claimant's costs.
In awarding the Claimant some of its costs, the Court sought to balance 2 competing factors: (1) the Claimant had been forced to go to trial to vindicate its rights, had ultimately been successful and was entitled to recover its costs; and (2) the Defendants had made an offer to settle the proceedings at an early stage and had offered substantially all of the relief the Claimant had sought.
The Court considered that the Claimant had not substantially "beaten" the terms of the Defendants' offer and the trial had largely been about the recovery of costs. The Court was keen to ensure that there was a reduced incentive for a claimant to press on to trial after an offer had been made, for substantially all of the relief sought, at an early stage. However, the Court emphasised that defendants should make a reasonable offer of costs at an early stage if they are giving in and not "to put their heads in the sand".
This case highlights IPEC's active case management, use of preliminary non-binding opinions, determination of issues "on paper" and approach to costs generally. All of these measures may assist you achieve an effective resolution of your IP dispute in Court, with the benefit of capped costs exposure.