The potential benefits of litigating IP disputes in Scotland

The singularity of the UK marketplace and the ease by which intellectual property (IP) infringement can take place in the modern digital age mean that IP disputes often present an opportunity for the aggrieved party to take formal action in either England or Scotland.

The remedies available for IP disputes are the same in the Scottish courts as in the English courts but there are some important differences in procedure, costs and legal principles between the two jurisdictions. These variances can prove significant in determining strategy, sometimes even tipping the balance in favour of raising proceedings which would not have been worthwhile in the other jurisdiction.

It is not encouraged to select an alternative jurisdiction purely for the nuisance that it would cause to the other party, doing so may even leave the claim vulnerable to being dismissed for forum non conveniens i.e. that there is another court which is better suited to hear the case, but where there is genuine concurrent jurisdiction, the aggrieved party will have a choice of courts.

Here we set out some of the key jurisdictional differences and explain why it is worth considering pursuing IP claims in Scotland rather than England.

Disclosure

The pre-litigation disclosure rules in Scotland are much less demanding than in the English court process. Whilst the court will take on a proactive role in case management in Scotland, disclosure is usually only ordered upon application by a party. Any such application has to be specific and have a basis in the pleadings. “Fishing” attempts to recover wide-ranging documentation will not be entertained. This system of disclosure limits early stage cost exposure. As such, preparing for, and commencing IP litigation in Scotland can be relatively economic.

Interim orders

Like courts in other jurisdictions, the courts in Scotland are prepared to grant interim preventative orders. In doing so, no express cross undertakings on damages are required, albeit that a remedy for damages will remain in the event of the wrongful use of interim orders. It is not always necessary to prepare detailed affidavits in support of an application for interim orders. This is particularly convenient when parties wish to move swiftly and as economically as possible at the outset.

Ex-parte orders

In Scotland, interim orders can be obtained without notice to the adverse party. With this in mind it is advisable for parties who may become subject to proceedings in Scotland to lodge what are called caveats at appropriate courts. This means that they will be given advance notice of any attempt to seek an ex-parte interim order in that court and will have an opportunity to oppose the application.

Equity

Scottish courts are much more limited in their application of the principles of equity. In some cases, particularly contract law cases, this can provide a greater degree of certainty to clients commencing litigation. As a subsidiary point, the courts’ approach to the application of equitable principles underlines the need to have Scottish locus contracts drafted appropriately so that they reflect the relevant legal basis for any claims.

Res judicata

The Scottish courts do not apply the principle of res judicata (that the matter has already been determined) in IP disputes in a restrictive fashion in the way that English courts do, for example in the Firecraft case. This allows matters to be re-examined by the courts, irrespective of the existence of an IPO tribunal decision.

Costs

Cost budgeting does not apply in Scotland and the cost of litigation is generally lower in Scotland than elsewhere in the UK. The successful party is able to recover costs according to a judicial scale. Rates of recovery are typically around the 50% mark, but IP disputes lend themselves to an enhanced rate of recovery. The fees of foreign (including English) solicitors can be recovered in Scottish proceedings.

Court fees

Scottish court lodging costs are also lower than the equivalent court fees in England and Wales. Percentage fees relating to the level of damages sought do not apply as Scottish court fees are fixed regardless of the level of claim.

Legal expertise

A study carried out into IP litigation in the Scottish Courts in 2017 found that just over half of infringement claims were brought by rightholders based outside Scotland and that Scottish solicitors specialising in IP are routinely managing litigations for clients based in other jurisdictions. The research also showed that the Court of Session dealt with a significant volume of claims for infringement of registered trade marks and/or passing off, and that copyright was the most litigated IP right in both jurisdictions.

The Court of Session has a specialist IP procedure and designated IP judges. Scottish solicitors and counsel are also experienced in dealing with complex and high value IP disputes, including those with an alternative governing law specified in the contract. This availability of high quality legal advice and judicial expertise, coupled with the reasonable costs of Scottish litigation, make Scotland a viable and attractive alternative to other jurisdictions when it comes to IP disputes.

Get in touch – we’re here to help

The Scottish IP court is subject to a current review seeking ways to enhance the ability to enforce rights and to boost Scotland’s reputation as a venue for IP rights enforcement. We look forward to the outcome of that review. In the meantime, if you need advice on IP issues then please contact Harper Macleod LLP’s specialist team for assistance.