Transfer of action - Action assigned to Patents County Court - Defendant applying for transfer of trade mark proceedings to High Court

Comic Enterprises Ltd v Twentieth Century Fox Film Corporation: PCC (Judge Birss QC): 22 March 2012

The instant case concerned a trade mark and passing off claim arising from the use of the sign ‘Glee’. The claimant carried out business running comedy clubs in England called ‘The Glee Club’.

The clubs included live music and cabaret. The claimant had a registered trade mark for the mark 'the Glee Club’. The defendant was a world famous film and television company which produced a popular television show called ‘Glee’. In February 2011, Glee was viewed by an estimated 26.8m viewers. The 2011 ‘Glee’ tour sold some 165,000 tickets in the UK. A movie was released in August 2011 and DVD, Blu-ray disks and other merchandise were also sold. The defendant had a UK registered trade mark for the word 'Glee', which it had acquired in 2010.

As of March 2009, the defendant had a group of community trade marks for stationery, games and entertainment services in the nature of the television series. The claimant brought proceedings in the Patents County Court (PCC) against the defendant in respect of its use of the word ‘Glee’ alleging trade mark infringement and passing off. The defendant applied to transfer the case to the High Court. The claim was submitted prior to a cap on damages of £500,000, which was introduced for the Patents County Court (Financial Limits) Order 2011, SI 2011/1402.

The claimant’s solicitors wrote to the defendant and to his solicitors in London. The defendant’s solicitors replied that, in their view, the case should be transferred to the High Court because: the value of the claim was substantial; the claim was complex and would require substantial evidence and disclosure; and the outcome was important in the light of the publicity of the claim. The defendant applied to transfer the case to the High Court.

The issue for consideration was whether it was appropriate, in all the circumstances, to grant a transfer of the claim to the High Court. The defendant submitted that all or most of the relevant factors militated strongly in favour of transfer, including the complexity of the case; that it was likely to last longer than two days and that the costs order was likely to be high. The claimant contended that the case was suitable to be tried in the PCC and that the issue was one of access to justice. It submitted that it was a small and medium-sized enterprise (SME) and, where the defendant’s estimated costs were in excess of £400,000, an order for costs made against the claimant would be devastating to its business.

The claimant’s financial statements for recent years showed annual turnover figures of between £2.5m and £3.4m. Consideration was given to the relevance of the complexity of the case and financial position of the relevant parties in assessing whether to grant a transfer of a case to the High Court. Consideration was given to Civil Procedure Rule 30.3 and to paragraph 9.1 of Practice Direction 30.

The court ruled: It was settled law that the factors to be considered in deciding whether to grant a transfer of proceedings were: (i) the financial position of the parties; (ii) the value of the claim, pursuant to paragraph 9.1 or Practice Direction 30 and CPR 30.3; (iii) the complexity of the issues; (iv) the estimated length of the trial; and (v) the importance of the outcome of the claim to the public in general. It was further settled law that access to justice for SMEs was a decisive factor in determining whether to grant a transfer of a claim and the PCC had a specific role to improve access to justice for SMEs in the area of intellectual property.

However, a small claimant did not have an unfettered right to stay in the PCC, regardless of the nature of the case, any more than a large defendant had an unfettered right to demand that it be sued in the High Court. An application to transfer an action between courts was not the place to conduct minute analyses of the finances of a party.

Unless a statement by one party as to its financial position would be shown to be plainly wrong, an application to transfer should not descend into evidential trench warfare. If the proceedings were between two large corporations which could afford to litigate in the High Court then the complexity of it would be a factor firmly in favour of transfer. However, if it was a case of modest value between two small parties, neither of which could afford the High Court, then the complexity was not so substantial as to mandate a transfer in and of itself. Access to justice for SMEs was capable of being a decisive factor having regard to the purposes for which the PCC had been set up. The ultimate objective of an order for transfer was to do justice between the parties. (see [18], [24], [34], [44], [48] of the judgment).

The instant case was one which could be fairly and properly dealt with by the PCC. The PCC could in appropriate circumstances hear cases that took longer than two days. It was likely that the claimant would be severely affected by an adverse costs order in the High Court. However, set against that was the nature of the case itself and its value. The decisive factor was the claimant’s approach to the litigation despite its being an SME. The claimant was not approaching the case as if it was a PCC claim. Its approach had been to run the case as a full-scale High Court-style action with a claim for an injunction with catastrophic consequences for the defendant. Accordingly, the correct forum was the High Court (see [34],[48], [55] of the judgment). The application would be granted (see [56] of the judgment).

Denise McFarland (instructed by Cobbetts) for the claimant; Simon Malynicz (instructed by Simmons & Simmons) for the defendant.