Costs in trade mark proceedings – UKIPO guidance

6th February 2023

The first practice note of 2023 by the UK Intellectual Property Office (IPO) was in relation to costs in trade mark, patent and design tribunal proceedings. The note brings together and updates previous guidance.

Most importantly, the IPO is continuing with its “contribution-not-compensation” approach, whereby costs are determined according to a scale published by the IPO and with reference to the complexity of the dispute. The scale can be found in Annex A of the TPN 1/2023. There are various reasons the IPO continues with their approach, including certainty, transparency and predictability. However, the scale does take into account that each case will have its own particularities, allowing for divergence (i.e. a range of costs) where there is, for example, complex statements, substantial evidence or several hearing days.

The new scale applies to all proceedings commenced on, or after, 1 February 2023. The previous scale, under TPN 2/2016, continues to apply to proceedings commenced on or after 1 July 2016, and the scale under TPN 4/2007 applies to proceedings commenced before 1 July 2016. Please keep this in mind when determining, either for yourself or your client, the potential costs that may be payable to the other party.

The IPO also set out guidance on how costs will be awarded in particular circumstances, including:

  • Unrepresented parties: These parties will be sent a pro forma at the end of proceedings inviting them to submit how many hours they spent on each step of proceedings. Once received, the Hearing Officer will take the information into account, but not be bound to it, and award a reasonable sum. Importantly, if the pro forma is not completed, no costs award will be made save in relation to official fees.
  • Off-scale costs: The Hearing Office retains discretion to award costs off the scale to deal proportionately with unreasonable behaviour. Examples of unreasonable behaviour include behaviour designed to delay or frustrate proceedings or unreasonably rejected efforts to settle. The off-scale costs will be commiserate to any extra expenditure, and parties should expect to be asked to produce itemised evidence to support any request for such costs.
  • Costs in undefended actions: Costs are unlikely to be awarded against a party who does not defend an action, when they do not have prior notice. If a case is withdrawn before it has been defended, costs will be assessed up until the point of withdrawal.
  • Costs arising from interlocutory / preliminary hearings or case management conferences: Hearing Officers will generally put their view on costs either at the end of the hearing or CMC, or in a follow up letter, but discretion is maintained.
  • Condition fee arrangements (CFAs): The existence of a CFA will not affect the Hearing Officer’s assessment of costs, including the presence of a success fee or if off scale costs awarded.
  • Licence of Right cases: The IPO will continue its customary position of not awarding costs, unless one party has pursued unreasonable terms or due to the circumstances of the case.
  • Ex parte hearings: The IPO’s current practice of not awarding (or seeking) costs will continue. In terms of appeals, if the appeal is heard before an Appointed Person, the Comptroller will not seek costs (unless unreasonable behaviour exists). If the appeal is heard in the High Court or Court of Session, the Comptroller will normally seek costs as it expects costs to be awarded against it if it loses on appeal. In cases of general legal importance, the Comptroller may decide not to seek costs.

As above, the updated TPN is a welcome centralisation of the IPO’s various approaches to costs, and will provide helpful guidance for submissions by parties when actioning or defending proceedings in relation to trade mark, design or patent rights.

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