A glum side to a Fox win in British suit
Twentieth Century Fox has won a victory in a trademark infringement lawsuit over “Glee” in Britain, a case that may prove a blow to individuals’ ability to protect intellectual property rights in the British system. The court’s ruling, observers say, could curtail remedies available to small entertainment firms seeking to shield their trademarks against larger companies in Britain’s Patent County Court rather than its High Court.
The patent court is a special jurisdiction designed to allow small business to litigate IP rights quickly and in an affordable way. It is similar to California’s system of limited civil actions, in which there is limited discovery. More key, the British patent court imposes a hard 50,000-pound cap on attorneys’ fees and costs. This is crucial because losing parties under the British bear fees and costs of litigation. This differs, of course, from the U.S. system, where, absent statutory or contractual language or a court decision, each party bears its own costs.
The British suit was brought in patent court by a small firm (Claimant) that runs comedy and music operations known as “The Glee Club” and “The Glee Comedy Club.” Claimant had its trademark in “Glee” since 1999. It asserted it learned about the Fox show in 2010 but decided against pursuing action against the TV production because it thought Glee would be a passing fad similar to the “High School Musical,” which faded fast. But from 2009-11, Fox began trademarking Glee in a variety of legal manners. And in September, 2011, claimant rushed to sue in Fox in patent court, without sending notice or cease-and-desist letters. The patent court later would speculate that its announced October, 2011, imposition of a 500,00-pound hard-cap on damages led in to haste and a lack of pre-suit negotiation between Glee and Fox.
Fox moved fast to get this case removed to High Court, with more discovery and no caps on attorney fees and costs. Claimant objected, saying if the case were transferred, it would be forced to post bond ranging from 400,000-750,000 pounds to cover potential fees and costs. It said that would make it financially impossible for it to proceed with its claim. The patent court took due notice of the claim of potential financial hardship and inequity but decided ultimately to allow jurisdictional transfer because claimants also had sought a court order against Fox regarding the trademark. That move raised the ante sufficiently for Fox to justify the transfer, and had Claimant sought damages and not injunctive relief, the suit might have proceeded in patent court, the court ruled.
So for smaller firms in Britain, this case and the various other bars have left them in a quandry: Does this mean that IP cases with high-dollar value can only be heard in more costly fashion in High Court, especially if parties seek injunctive relief? With its well-intentioned caps on damages, attorney fees and costs, has the patent court put itself into such a disadvantaged legal strait-jacket as to offer claimants only the smallest action and relief in IP and specifically trademarks, areas of law where the financial stakes can be large?