Consultation outcome

Transformation consultation: Part B

Updated 1 August 2023

Part B - Improving the IPO Tribunal Function

The IPO’s tribunal function

One of the IPO’s roles is as a tribunal in relation to disputes on issues covering patents, trade marks, and designs. These can be disputes between parties, or between a party and the IPO as part of the application process.

Disputes brought to the IPO are heard by hearing officers. They act independently and make decisions on the issues based on the arguments and evidence before them. They have similar powers and responsibilities to the courts in terms of dealing with cases fairly and justly. Each IP right has its own procedural rules for disputes, and these have often developed independently of each other.

Tribunal processes will be part of the Challenge IP workstream in the One IPO Transformation programme. Alongside that work, we have looked at our Tribunal service for any improvements that could be made at the same time. We have considered past suggestions for change and issues that have been raised by IPO staff and external interests.

We have identified some potential changes which we think will improve the Tribunal service for parties and the IPO itself. Some of these would require changes to our legislation to accomplish. This part of the consultation asks for your views on those proposals. That does not mean we will have thought of everything. We would welcome any further suggestions for improvements to the service beyond those presented in this consultation.

Question 18. Apart from the ones discussed below, are there any changes to the legislation relating to the IPO’s tribunal function we should consider?

Expedited hearings

Disputes between parties are normally decided within 12-14 months of being launched. They involve a series of exchanges of statements and evidence, followed by the hearing of the dispute and the issuing of the decision. The timetable for the process is usually specified by the IPO once both sides have set out their case.

However, one or more of the parties may need a decision earlier than the normal timetable would allow, and so may wish the case to be expedited. Expedition is not currently part of Tribunal processes. While a “fast track” process is available for trade marks, this applies only to certain types of disputes where the issues are straightforward.

In the courts, whether to allow a case to be expedited is at the discretion of the judge. It is a question of case management, with principles set out in case law.

The government would like to provide the ability to expedite hearings. The current legislation gives IPO staff wide-ranging powers to manage proceedings before the IPO. Expedition is not specifically mentioned. It is therefore unclear whether it can be done using the current powers. There is the potential for disputes about the powers of the IPO if a request was made without a solid backing in law.

The government therefore propose that a specific provision on expedition be introduced. This would give the necessary clarity that we have the power to allow expedition and that the parties can seek it. We think there are two ways to achieve this:

Option 1: Amend the rules on case management powers to include a specific reference to expedition

Adding the ability to grant expedition to the actions particularly permitted under case management powers is the most straightforward. It gives the most discretion in how the IPO can use these powers in individual cases. Government would provide guidance on how to make a request, rather than setting it out in legislation.

Option 2: Add rules to provide a specific process for expediting a case

This option would create a formal process for requesting expedition, for deciding whether to grant expedition and for taking appropriate steps afterwards. It would provide a clear statutory procedure for parties. This would reduce the potential for disputes to arise over how the request was made rather than its substance. It could allow us to create a specific form for a request – making it easier to gather the relevant information and providing consistency.

The process will still be quite flexible, as the circumstances of each case will be different. We do not propose to set a hard time limit for when a request can be made, for example. We also do not propose to set out when a request would be allowed – this will be for the hearing officer to decide, based on the criteria used by the courts.

We expect that a decision on expedition would normally be taken once both parties have filed their statements of case. That said, there may be circumstances where a decision should be taken earlier.

If the request is allowed, the IPO will be able to set the timetable for the rest of the case accordingly. But, as a request could be made after that timetable was set, the IPO will need to have the ability to shorten any time periods it previously specified. Patents and designs legislation already provide this power, but the trade marks legislation does not. We will need to change that to make this proposal work.

Question 19. What are your views on providing the ability to request expedition in legislation, and which of the options would you prefer us to take forward? Please explain why.

Request for clarification of grounds

When someone wants to start proceedings at the IPO, they must provide a statement of grounds. This sets out the details of the case they wish to make, the applicable law, and why the hearing officer should decide in their favour. The other side will then file a defence which admits or denies the claims made and makes any extra points they wish to raise.

Many people who start proceedings at the IPO are not represented by lawyers. They often do not have experience of how to present arguments in a legal setting. This can lead to statements of grounds which are unclear or contain a lot of information which isn’t relevant to their case. This can make it difficult for the other side to understand the issues they have to argue against, especially if they also do not have legal representation.

It is standard practice for caseworkers at the IPO to check the statement of grounds for any significant issues when filed. They will ask the party to fix them before the other side has to respond.

But, in most cases, the other side does not engage with the proceedings and does not file a defence. The case is automatically decided in favour of the starting party, and so the unclear statement of case is not an issue. Only around a third of cases are defended. This means that IPO caseworkers spend a significant amount of time on something which in the end may have no effect on the outcome.

There is a different process in the courts. If a statement of grounds is unclear, the other party must make a request for clarification. The court will then decide if the statement of grounds needs to be changed.

The government would like to consider replacing this initial check of the statement of grounds with a process for requesting clarification. This would bring Tribunals processes in line with the courts. Caseworkers would still check that the statement meets formal requirements, but this would allow them to focus on other parts of the process. More guidance could be provided for unrepresented parties on how to set out their case, to reduce the need to make a request.

However, this may remove a service which helps unrepresented customers navigate the system. It is important to ensure that all parties have equal access to justice, whilst keeping things fair and unbiased. Helping a customer understand what needs to be done and when something is wrong is also good customer service. It may also be helpful to the other side, as they will have a clearer case to respond to. Having to make a request could place an additional burden on the defending side to raise issues.

Question 20. What are your views on replacing some checks on pleadings with a process for making a request for clarification?

Copying the other party into Tribunal correspondence

When parties bring disputes to the IPO to be resolved, it is important that all parties are provided with the material on which the hearing officer will base their decision. This means they can fully understand the other party’s case and properly present their own in return. It makes the proceedings fair and transparent to all.

Each party therefore has an obligation to ensure that anything they send to the IPO as part of the process is copied to the other parties involved. The obligation is currently set out in Tribunal Practice Notice 2/2011.

Failure to comply with the obligation causes delay and disruption. IPO staff must spend time following up on non-compliance, and the other party may have less time to deal with important correspondence. Persistently failing to comply may be reflected in the costs awarded at the end of the proceedings.

The government is aware from customer feedback and from the IPO’s own experience that this requirement is frequently not complied with. We think it is now necessary to have an express rule which sets out the obligation in law.

Transformation will look at whether new systems can help parties meet this obligation. However, the government believes it should remain the responsibility of the parties, rather than the IPO. A specific rule which requires parties to copy each other into correspondence with the IPO should ensure better compliance with this principle.

The rule would likely set out that correspondence which does not comply will not be considered by the IPO, and that further sanctions may result. These may include awarding costs to the other side, or even striking out the party’s case. Not all correspondence may fall within this statutory obligation – something routine or administrative would likely not need to be copied, for example.

This would mirror the situation in the civil courts. The Civil Procedure Rules (CPR) include a requirement for communications with the court to be copied to all parties. This is found in CPR rule 39.8. It would make sense for any rule introduced for disputes before the IPO to follow similar lines. This would mean there is the same expectation regardless of whether a dispute came to the IPO or the court.

Question 21. What are your views on creating a statutory obligation to copy the other party into correspondence? Has this caused you issues in the past, and what impact has that had?

Improving enforcement of unpaid IPO costs orders

At the end of a case, the IPO will usually make an order awarding costs to the successful party. This is designed to provide them with a contribution towards their expenditure on the case and is normally based on a fixed scale.

Occasionally, the other party fails to pay the costs award. The IPO has no powers to make the party pay the costs order. Instead, the successful party must take action in the civil courts to recover its costs. However, the government understands from feedback that enforcement is rarely pursued. This is because it can cost more than the value of the costs order itself, and enforcement officers are unfamiliar with IPO costs orders.

The IPO has tried to encourage the payment of unpaid costs orders by publishing details of those who fail to pay on the IPO website. Again, feedback suggests this has not been particularly successful.

Orders of the court and other tribunals on costs and other money judgments, such as awards of damages or County Court Judgments (CCJs), are dealt with differently. These are recorded on a central register set up by legislation. Entries on this register are then picked up by credit agencies. This can have a negative effect on credit ratings for individuals and businesses if not resolved.

To try and solve the problem presented by unpaid costs orders, the government is looking into whether IPO costs orders can be brought into the system for registering orders in a way similar to CCJs. This could make it easier to stop parties avoiding payment without suffering consequences. It may also make enforcement easier if there is a record of the order which is more familiar to the relevant authorities.

The government wants to explore this idea further. We are keen to understand if stakeholders would support us doing so, and to try and put a value on the effects of the current issues.

As well as costs, the IPO also has the power to award damages to a party. These are enforceable in the same way as costs orders. In practice, the cases where damages can be awarded usually go to the courts, so this power is not used. The government does not think we need to look at damages as a result but welcome your views on this.

Question 22. Have you or your clients been awarded costs in an IPO tribunal case which have then gone unpaid?

Question 23. Were you successful in enforcing the costs order through the civil courts? What issues did you encounter? Please provide any information on how much it did or would have cost to enforce the order.

Question 24. What are your views on whether IPO costs orders for costs and damages should be registered like CCJs?

Providing for cross-appeals in Appointed Person cases

If a party disagrees with an IPO decision, they can appeal that decision. Appeals from IPO decisions review the original decision (rather than rehearing the case) and can go to either the courts or the Appointed Person (AP). APs are senior IP lawyers or barristers, independent of the IPO, who hear appeals on trade marks and designs.

In a case between two parties, when a decision is appealed, the other party can respond to the points raised in that appeal. However, that party may disagree with other issues in the same decision and may also wish to challenge them as part of the appeal process. This is known as a cross-appeal.

There is nothing in the IP legislation to say how to make a cross-appeal. As a result, the other party will often try to include a cross-appeal in their response to the initial appeal, which it is not designed for. Because the deadline for appealing will have passed by then, the cross-appeal is technically out of time.

The APs will often accept cross-appeals filed in this manner. However, this requires a complicated process which causes problems for both parties and APs. The cross-appeal is treated as a separate appeal for which the correct form must be filed. The period for filing the appeal and paying the associated fee must then be extended. This is made more difficult by the fact that the APs do not have a direct power to extend time limits – this must be done by the Office.

The government believes that the ability to file a cross-appeal needs to be properly set out in the legislation. This would eliminate the issues created by trying to fit a process into the existing law. It would put the AP in the same position as other appeals tribunals, which have rules on when and how a cross-appeal should be filed.

The cross-appeal could either be included with the respondent’s notice or be a separate statement of grounds. Either way, it would need to be filed within the normal 21-day timeframe for the response to the appeal. There would also need to be a way to enable the appellant to address points raised in the cross-appeal.

A cross-appeal accepted under the current process normally requires the same fee as filing a standard appeal. To ensure fairness between the parties, this should continue, regardless of how we decide it should be filed.

Although this proposal would mean it is not required in the case of a cross-appeal, we will also address the gap in the ability of the APs to extend time. This would allow any period related to the appeal to be extended by the APs, including the appeal period itself (if an appeal is filed late, for example).

The legislation already grants some of the powers of the registrar to the APs. The government would add the ability to extend time limits to this. Otherwise, the APs would lack powers which the courts have when both appeal routes should be broadly the same.

Question 25. What are your views on putting cross-appeals on a statutory basis and how they should work in practice?

Harmonising powers of IPO hearing officers

Each IP right has its own procedural rules which set out the powers of hearing officers. These rules developed separately from each other, and not always in the same way. The government proposes to align some of those rules across the rights. This will provide a more consistent approach for both parties and IPO staff.

Witnesses and disclosure of documents

IPO hearing officers have the power to require witnesses to attend a hearing and give evidence. They also have power to require that documents relevant to the dispute be produced (“disclosure”).

For trade marks and designs, the legislation gives hearing officers the same powers as an “official referee”. This is a specialist judge dealing with detailed technical cases. Patents hearing officers have the powers of a High Court judge. In practice, there is no difference between the two. In both cases, this does not include the power of the judge to punish summarily for contempt of court if the hearing officer’s order is not followed.

But the role of the official referee no longer exists. What is known as “official referee’s business” is now the responsibility of High Court judges in the Technology and Construction Court instead. So, the powers of some hearing officers are no longer clear and need changing.

The Trade Marks Act and Registered Designs Act will need to be amended to remove the references to the official referee. The Patents Act has more general wording to allow for rules dealing with witnesses and disclosure. Adopting similar wording would prevent the same situation arising in the future.

The related rules will also need updating, and there are two different ways to do so.

Option 1 – replace the references to the Official Referee only

This option would simply change the references to say that trade mark and designs hearings officers also have the powers of a High Court judge. This would be consistent with the approach in the Patents Rules, but also with how official referee’s business is now handled. Since there is no practical difference between the two sets of powers, there would be no change in what hearings officers can do.

Option 2 – replace the existing rules and set out the powers in detail

This option would be a more substantial change to all three sets of rules. There would be no reference to the powers of a particular judge, as in the current legislation. Instead, government would set out what a hearing officer can do in relation to witnesses and disclosure in detail. This would not change what the powers are but would have the benefit of making it clear what is covered without having to look elsewhere. The exception relating to contempt of court would remain in place.

Other tribunals take this approach. Many of the chambers of the First-tier Tribunal have detailed rules on disclosure and witnesses, which we could use as a starting point. We would need to make sure our own drafting correctly reflects what the hearing officer can do at present.

Question 26. What are your views on the detail in which the hearing officer’s powers should be set out? Which option for the changes to the Rules do you prefer? Please explain why.

Appeals on preliminary matters

Before a decision can be made on the main issue in a dispute, there may be other issues that need to be determined first. These tend to relate to how or if the case should proceed. Where a decision on such preliminary matters does not bring the case to an end or lead to an award of costs, it is known as an interim decision.

As a rule, any decision made by a hearing officer can be appealed. This includes interim decisions. But any appeal on an interim decision will lead to a delay before the actual issue in the dispute is decided. This delay can often be significant and will add to the costs of the parties involved. The appeal may not significantly affect the final outcome of the dispute and so may end up being unnecessary and disruptive.

In trade marks legislation, a party cannot appeal an interim decision separately from the final decision unless they get permission to do so. The decision is still appealable, but only once the whole case has concluded. This provision was introduced in 2008 and appears to be working effectively. Although these issues also appear in patents and designs cases, there are currently no equivalent rules in their legislation.

The government proposes that, for patents and designs, the hearing officer’s permission is needed to appeal an interim decision separately to the main decision.

This would apply the same approach as the existing trade marks provision, providing a consistent approach across all the registered rights. Decisions on preliminary matters which bring the case to an end or award costs would not require permission to appeal. We may need to amend the appeal provisions in the Patents and Registered Designs Acts to enable this to work.

Question 27. What are your views on applying the permission requirement to interim decisions on patents and designs cases?

Striking out

The courts have the power to strike out (delete) the case of one of the parties. This is done when they consider the case provides no good reason for bringing or defending the action, or is vexatious or an abuse of process. It can also happen if a party fails to comply with the rules or instructions of the court. Strike out usually means that the dispute comes to an end. As a result, it is usually used only as a last resort, and the court may instead give the party the chance to fix the issues with its case. The court may also strike out part of a case for similar reasons.

The patents legislation provides hearing officers with the same power, which was introduced in 2008. It also allows them to give summary judgment if they decide a party has no real chance of succeeding with their case. However, there is currently no express provision for strike out in trade marks or designs disputes. Although it is within the power of the hearing officer.

The government proposes to adopt the patents provision into trade marks and designs legislation. Cases with no reasonable prospect of success occur more often in trade marks and designs. The number of cases is greater, and more parties are unrepresented and so less likely to know when a case is without merit. Having the express ability to strike out all or part of a case, or give summary judgment, would be beneficial. It should make it easier for hearing officers to deal with the most hopeless cases in an efficient way.

In addition, it is unclear if the existing rule allows hearing officers to consider strike out without one of the parties raising it. It makes sense to address that lack of clarity at the same time. We think the hearing officer can and should be able to do so, since the courts can act on their own initiative in the same circumstances. This is particularly important where the party has failed to comply with what the hearing officer requires. The hearing officer would always provide the parties with the opportunity to be heard if striking out was being considered.

Question 28. What are your views on providing an express power to strike out or issue summary judgment across all the registered rights, and allowing hearing officers to raise the issue themselves?