Statutory guidance

Tribunal Practice Notice (TPN) 1/2023: Costs in proceedings before the Comptroller

Published 24 January 2023

Background

1. This TPN brings together and updates the guidance from previous TPNs about costs in trade mark, patent and design tribunal proceedings (the previous TPNs being 2/2016, 2/2015, 4/2007 & 2/2000). It also updates the scale of costs.

Continued use of a published scale

2. The Tribunal will continue with its practice that costs should be determined by reference to a scale, with an underlying “contribution-not-compensation” approach. This provides transparency to parties considering litigation before the Tribunal about their potential costs liability if they were to lose, and what level of contribution a successful party might receive for any justifiably incurred costs. The scale therefore sets out the scale which would be “treated as norms to be applied”^{[footnote 1]}, but also indicates a range of costs commensurate with, e.g., the complexity of statements of case, the amount of evidence and the number of hearing days.

3. Annex A contains a revised scale of costs, which are the first increases since 2016. The new scale will apply to proceedings commenced on, or after, 1 February 2023. For proceedings commenced before this date, the scale of costs in TPN 2/2016 applies, unless those proceedings commenced before 1 July 2016, in which case the scale set out in TPN 4/2007 is applicable.

Unrepresented parties

4. Unrepresented parties generally incur lower costs because they do not have to pay legal or other professional fees. If the scale of costs were applied to unrepresented parties, they might receive costs in excess of what they may reasonably have incurred, which would undermine the contribution-not-compensation approach and the indemnity principle. Therefore, unless a Hearing Officer directs otherwise, unrepresented parties will be sent a proforma at the end of proceedings inviting them to set out the number of hours spent on the various steps of the proceedings. If an award is to be made in favour of an unrepresented party, Hearing Officers will consider the information provided when determining the sum to be awarded. The number of hours claimed will not, however, be binding on Hearing Officers, who will continue to assess whether the time spent was reasonable in the circumstances of the case and who will retain a residual discretion in any event. The sum to be awarded per hour will be analogous to that set out in the Civil Procedure Rules, Part 46, which is currently £19 per hour. The total amount awarded should, though, not exceed the maximum amount payable on the scale of costs (unless off-scale costs are sought). If the unrepresented party does not complete and return the proforma, no costs award will be made save in relation to official fees (except fees for extensions of time).

Off-scale costs

5. Notwithstanding the published scale, the Tribunal retains the discretion to award costs “off the scale” to deal proportionately with unreasonable behaviour. It is not possible to set out all the circumstances in which a Hearing Officer might depart from the scale. It is worth clarifying though that just because a party has lost, this in itself is not indicative of unreasonable behaviour. Some examples of what might constitute unreasonable behaviour include a party seeking an (avoidable) amendment to its statement of case which, if granted, would cause the other party to have to amend its statement or would lead to the filing of further evidence. Other examples include behaviour designed to delay, frustrate or unreasonably increase the costs/burden on the other party and/or repeated breaches of procedural rules. Off-scale costs may also be awarded if a losing party unreasonably rejected efforts to settle a dispute before an action was launched or a hearing held, or unreasonably declined the opportunity of an appropriate form of Alternative Dispute Resolution.

6. The level of off-scale costs will, generally speaking, be commensurate with the extra expenditure a party has incurred as a result of the unreasonable behaviour. Any claim for costs approaching full compensation or for “extra costs” will need to be supported by a bill itemizing the actual costs incurred. There may be some circumstances where costs below the minimum indicated by the published scale are awarded. For example, a party who does not follow a suggestion from the Hearing Officer as to the most efficient means of managing the case, may only be entitled to whatever award they would have received if they had followed the Hearing Officer’s suggestion.

Costs in undefended actions

7. Unless factors exist which suggest otherwise, costs will not be awarded against parties who do not defend an action which has been brought against them without prior notice. It should be noted that in trade mark proceedings, the filing of a Form TM7A will usually be considered as giving the trade mark applicant prior notice.

8. If a case is withdrawn after it has been defended, costs will continue to be assessed up until the point of that withdrawal.

Costs arising from interlocutory/preliminary hearings or case management conferences

9. In the majority of cases, Hearing Officers will indicate at the end of the hearing/CMC (or the follow-up letter) what their view on costs is, either by specifically making no award if the issues were evenly balanced, or by indicating what level of costs ought to be awarded at the conclusion of proceedings. Giving such an indication means that the award will not be lost sight of during the rest of the proceedings and it can then be balanced against any costs awarded for the rest of the proceedings. Nevertheless, Hearing Officers still have discretion to make an order for the payment of costs as the cause arises, and will consider doing so on a case-by case basis in appropriate circumstances.

Conditional fee arrangements

10. If one of the parties has agreed a conditional fee arrangement (“CFA”) with their legal representative, any “success fee” will not be taken into account when assessing costs. If the normal scale is applied, there will be no variation of that award to take account of anything in the CFA. Even when off-scale costs are awarded, the amount will be assessed using the usual principles for assessing off-scale costs (as above), and the amount will not be affected by the existence of a CFA.

Licence of Right Cases

11. It has been customary in licence of right cases for the Comptroller not to make an award of costs unless one side pursues unreasonable terms or the circumstances of the particular case are sufficiently unusual to warrant a departure from that practice. It is not intended to alter that approach, except to the extent that the flexibility to address procedural difficulties may apply.

Ex parte hearings (hearings between the office and just one party, normally the applicant for an IP right)

12. The practice of the Office not to award/seek costs in connection with ex parte hearings will continue. In terms of appeals against such matters, the following will apply:

• for trade mark and design appeals made to the Appointed Person, in keeping with the low cost of that appeal route, the Comptroller will not seek its costs (other than where unreasonable behaviour exists)
  
  
• for appeals to the High Court, or Court of Session in Scotland, if the Comptroller loses on appeal, it is expected that an award of costs would be made against them. Therefore, whilst being willing not to do so in cases where a significant point of general legal importance is being considered, the Comptroller will normally seek its costs in ex parte appeals which they have successfully defended in the High Court

Annex A

Scale of costs in proceedings commenced on or after 1 February 2023

Task	Costs
Preparing a statement and considering the other side’s statement	From £250 to £750 depending on the nature of the statements, for example their complexity and relevance
Preparing evidence and considering and commenting on the other side’s evidence	From £600 if the evidence is light to £2600 if the evidence is substantial. The award could go above this range in exceptionally large cases but will be cut down if the successful party had filed a significant amount of unnecessary evidence
Preparing for and attending a hearing (including procedural hearings) or submissions-in-lieu	Up to £1900 per day of hearing, capped at £3900 for the full hearing unless one side has behaved unreasonably. From £350 to £650 for preparation of submissions, depending on their substance, if there is no oral hearing
Expenses	(a) Official fees arising from the action and paid by the successful party (other than fees for extensions of time) (b) The reasonable travel and accommodation expenses for any witnesses of the successful party required to attend a hearing for cross examination

Scale adaptions for trade mark fast-track opposition proceedings

13. The costs awarded in trade mark fast-track opposition proceedings will be capped at £600, excluding official fees, made up of:

• £250 for filing a notice of opposition or considering a notice of opposition and filing a counterstatement
  
  
• up to £350 for filing written submissions

As with any cap, this does not mean that costs will automatically be awarded at this level. Most awards will be less. The cap does not apply where a party is found to have acted unreasonably in their conduct of the proceedings.

1. AMARO GAYO COFFEE Trade Mark BL O/257/18 at para 13 ↩