Are my legal fees recoverable in IP litigation?

In intellectual property disputes in England and Wales, the general rule is that the losing party pays a proportion of the successful party’s costs. However, the specific rules and caps on costs recovery can vary depending on the court and the nature of the dispute.

In the Intellectual Property Enterprise Court (IPEC), which is designed to handle lower-value IP disputes, there are strict caps on recoverable costs to ensure litigation remains proportionate and accessible.

For IPEC multi-track claims, the cap on recoverable costs is £60,000 for trials on liability and £30,000 for trials on quantum. These caps are broken down by stages of litigation, for example, at the particulars of claim stage of litigation the cost recovery is capped at £9,000.

In the small claims track of the IPEC, which deals with claims valued at £10,000 or less, costs recovery is limited and generally only includes court fees, a small amount for legal advice, and certain expenses.

In general IP right claims outside the IPEC, the court generally reserves the costs of an application until the trial, where a summary assessment is conducted. The default position is that the losing party pays a proportion of the successful party’s costs, typically two-thirds to three-quarters, but this can be adjusted based on the specifics of each case. Courts have the discretion to apportion costs among different issues in the dispute, such as infringement and validity. They may also offset costs if both parties prevail on different aspects of the case.

While the general principle of costs recovery in IP disputes is that the losing party pays a proportion of the successful party’s costs, the specific rules and caps, particularly in the IPEC, are designed to ensure that litigation remains proportionate and accessible. That said, it is important that potential claimants consider the cost implications of litigation when contemplating issuing a claim and whether the potential defendants will be able to pay their costs, if they succeed.