Enforcing a Confidentialty Agreement in the Small Claims Track

Although business advisers, patent attorneys, solicitors and are very eager to tell you about confidentiality or non-disclosure agreements ("NDA") and, of course, to charge you for drawing one up, they are much less likely to tell you what happens if your confidante who could be your collaborator, investor, licensee or even your employee breaches the agreement.  The courts will grant injunctions to enforce obligations of confidence but these can take time to get and cost a lot of money.  The fact is that unless you can enforce it a confidentiality agreement it is not worth the paper it is typed on and the rogues are aware of that.

Until the new Patents County Court rules came into force on 1 Oct 2010 clients were advised that their own costs of applying to the Chancery interim applications judge for an interim injunction would be £15,000, that it could take months to obtain if the other side opposed the application, that they might not get their order and that they should b prepared to pay the other side's costs which could be at least as great as their own if they did not.   For most start-ups and small and medium enterprises this was intolerable and word got around that NDA and indeed intellectual property generally was about as useful as a chocolate fire guard.

I tried to solve the problem by inserting an arbitration clause into my non-disclosure agreements and by setting up an arbitration service with rules that enabled the arbitrator to grant interim injunctions that could be enforced with periodic payments like the continental astreinte.   Rule 2 (e) provided that unless the Parties agree expressly to the contrary:

"The Tribunal may compel compliance with any orders it may make under s,48 (5) of the Act by awarding periodic payments from a Party in breach to an injured Party from the date of such order until the date of compliance."

Do you know what? Not a single person made use of that service.   I don't know why.   Probably, it was because small business people rely on their solicitors and litigation solicitors, who are incredibly busy people if they are any good, tend to think in the short term and do what they did last time.

Whatever!  It became much quicker and cheaper to enforce intellectual property rights after the 1 Oct 2010 when recoverable costs were capped at £50,000, applications had to be made in writing and trials were fixed for one or at most two days.   

However, even £50,000 is a fair old sum for a start-up which is why the government launched a small claims track for IP in the Patents County Court.   I wrote about it in "How Small Businesses in Yorkshire can protect their Intellectual Property" on 14 Oct 2012 and gave a presentation on the new jurisdiction to the Sheffield inventors club on 1 Oct 2012.   The new small claims track does not cover everything - in particular, it does not cover patents and registered designs - but it does cover breach of confidence cases.   You can't get an interim injunction from the court but you can get a final one which has the advantage that you do not have to give a cross-undertaking as to damages.   And for the time being it can be quite quick with district judges giving automatic case management directions immediately after the exchange of statements of case for final hearings two months afterwards.   Costs are limited to just a few hundred pounds and then only if you need a solicitor.

I spoke about the new small claims track to the Leeds Inventors Group on the 13 Feb 2013.  There had been snow earlier that evening and the traffic was terrible which meant that I arrived very late but there was a young lady in the audience from Walker Morris called  Emily Baeza-Chavez who later contacted me to ask about the fixed fee service that my chambers run for the small claims track in Lancashire.   There we have teamed up with patent agents HutchinsonIP and JWK Solicitors to offer an all in advocacy and litigation service for £1,2000 + VAT and we are open to similar deals with solicitors and patent agents on this side of the Pennines (see "The Patents County Court Small Claims Track" IP North West 6 March 2013).

I got a chance to revisit the subject in Sheffield on 4 March 2013. The advertised speaker dropped out at the last moment because he was afflicted with one of the bugs that are doing the rounds so I stepped in with my "All you need to know about confidentiality" presentation which I had previously given to the Leeds and Manchester clubs.   When it came to enforcement I talked about the new small claims track and how it meant that an inventor could enforce an obligation of confidence or indeed most other intellectual property rights cheaply and with minimal risk.

The new small claims track court really does shift the balance of power towards the small business and private inventor and it really would be worth your while to find out more about it.   You can now contact me on 020 7404 5252 as well as on 0113 320 3232 or you can send me a message through Facebook, Linkedin, Xing or twitter or indeed my contact form.

Trade Marks - Huddersfield Firm Marks its Cross

Thornton & Ross Ltd, which was founded in 1922, is the largest independent pharmaceutical manufacturer in the UK and is expanding rapidly. Based in Huddersfield, the company manufactures and distributes such well known  brands as Covonia, Hedrin, Asilone, Setlers, Transvasin and Mycota.

On the 17 May 2011 Thornton & Ross applied to register the following sign as a British trade mark for the following categories of goods:

"Class 03: Preparations for care of the skin; cosmetics; toilet preparations; after-sun preparations; preparations for sun protection; hair lotions; shampoos; hair care preparations; foot care preparations; dentifrices; mouthwashes; essential oils; soaps; cleaning preparations; bleaching preparations and other substances for laundry use; polishing, scouring and abrasive preparations
Class 05: Pharmaceutical preparations and substances; veterinary preparations; sanitary preparations for medical purposes; medicated skin care preparations; medicated preparations for application to the skin after exposure to the sun and for use in the treatment of sunburn; sun protection preparations for medical purposes; medicated hair care preparations; medicated foot care preparations; medicated mouthwashes; materials for dressings; preparations for aiding removal of head lice in hair; insecticidal preparations for hygiene purposes; disinfectants; fungicides"

Its application was opposed by the Swiss company Strellson AG, which had registered the following device mark for perfumes and cosmetics in class 3.   Strellson relied on s.5 (2) (b) of the Trade Marks Act 1994 which provides:.

“5.-(2) A trade mark shall not be registered if because –
(a) ……..
(b) it is similar to an earlier trade mark and is to be registered for goods or services identical with or similar to those for which the earlier trade mark is protected,
there exists a likelihood of confusion on the part of the public, which includes the likelihood of association with the earlier trade mark.”

Both sides applied for a hearing and the case came on before Mr.Oliver Morris on behalf of the Registrar on 15 Nov 2012.  Strellson was represented by Mr. Mark Foreman of Rouse & Co. and Thornton & Ross's agent, Janet Bray of L J Bray & Co,. instructed me.   Mr. Morris's decision appeared on 27 Dec 2012.

In deciding the issue Mr. Morris referred to Sabel BV v. Puma AG [1998] R.P.C. 199, Canon Kabushiki Kaisha v. Metro-Goldwyn-Mayer [1999] R.P.C. 117, Lloyd Schuhfabrik Meyer & Co. GmbH v. Klijsen Handel B.V [2000] F.S.R. 77, Marca Mode CV v. Adidas AG + Adidas Benelux BV [2000] E.T.M.R. 723, Case C-3/03 Matrazen Concord GmbH v GmbGv Office for Harmonisation in the Internal Market [2004] ECR I-3657 Medion AG v Thomson multimedia Sales Germany & Austria GmbH (Case C-120/04) and Shaker di L. Laudato & Co. Sas (C-334/05).  Citing Mr Geoffrey Hobbs QC;s decision in  La Chemise Lacoste SA v Baker Street Clothing Ltd (BL O/330/10) he summarized the principles as follows:

"(a) the likelihood of confusion must be appreciated globally, taking account of all relevant factors;
(b) the matter must be judged through the eyes of the average consumer of the goods or services in question, who is deemed to be reasonably well informed and reasonably circumspect and observant, but who rarely has the chance to make direct comparisons between marks and must instead rely upon the imperfect picture of them he has kept in his mind, and whose attention varies according to the category of goods or services in question;
(c) the average consumer normally perceives a mark as a whole and does not proceed to analyse its various details;
(d) the visual, aural and conceptual similarities of the marks must normally be assessed by reference to the overall impressions created by the marks bearing in mind their distinctive and dominant components, but it is only when all other components of a complex mark are negligible that it is permissible to make the comparison solely on the basis of the dominant elements;
(e) nevertheless, the overall impression conveyed to the public by a composite trade mark may, in certain circumstances, be dominated by one or more of its components;
(f) and beyond the usual case, where the overall impression created by a mark depends heavily on the dominant features of the mark, it is quite possible that in a particular case an element corresponding to an earlier trade mark may retain an independent distinctive role in a composite mark, without necessarily constituting a dominant element of that mark;
(g) a lesser degree of similarity between the goods or services may be offset by a great degree of similarity between the marks, and vice versa;
(h) there is a greater likelihood of confusion where the earlier mark has a highly distinctive character, either per se or because of the use that has been made of it;
(i) mere association, in the strict sense that the later mark brings the earlier mark to mind, is not sufficient;
(j) the reputation of a mark does not give grounds for presuming a likelihood of confusion simply because of a likelihood of association in the strict sense;
(k) if the association between the marks causes the public to wrongly believe that the respective goods [or services] come from the same or economically-linked undertakings, there is a likelihood of confusion."

Mr. Morris decided that 

"The average consumer will be a member of the general public and, although the cost of the goods can vary, they are not, generally speaking, expensive items and will be selected with no more than an average level of care and consideration. The goods in class 5, on the other hand, contain goods which are medicated. The impact of this is that the level of care and attention used in their selection is likely to be higher and, furthermore, the average consumer may be a member of the general public or a health care professional"

 In making his comparison he adopted the Collins dictionary definition of "cosmetics":

“Any preparation applied to the body, esp. the face, with the intention of beautifying it.”

He concluded that a cosmetic was, therefore, "a preparation, the purpose of which is to beautify the face or body."  He continued 

"Whilst cosmetics such as lipstick, mascara and eye shadow may be the first and most obvious type of goods that come to mind if one were asked to consider the type of goods that fall within this category, I do not consider that this is all the term covers. For example, preparations (such as creams and lotions) whose intended effects are to reduce wrinkles would be classified as a cosmetic given that it aims to have a cosmetic impact on the appearance of the user. A further example can be seen when Mr Justice Neuberger in Beautimatic International Ltd v Mitchell International Pharmaceuticals Ltd and Another held, on the facts of the case before him, that a dry skin lotion was a cosmetic."

Mr. Morris found that preparations for the care of the skin, cosmetics, and toilet preparations were identical to cosmetics, after sun, sun protection and foot care preparations had a reasonably high degree of similarity, hair lotions and hair care products, essential oils and soaps and cleaning preparations to have a moderate degree of similarity.   The opposition thus succeeded in respect of

Class 03: Preparations for care of the skin; cosmetics; toilet preparations; after-sun preparations; preparations for sun protection; foot care preparations.
Class 05: Medicated skin care preparations

but failed in respect of everything else.  Though Thornton & Ross had won more than it had lost Mr Morris did not think that that justified an order of costs in its favour. He thus ordered each side to bear its own costs.

If anyone wants to discuss this case or proceedings in the Trade Marks Registry generally call me on 0113 320 3232 or send me a message through my contact form. You can also follow me on Facebook, Linkedin, twitter or Xing..

Huddersfield Youth Dance Academy Auditions 26 Jan 2013

The third week of January is rarely a bundle of laughs but with the horrible weather, the crisis in Algeria and the terrible attack on Sergei Filin today has been worse than most.   So here is something to cheer us all up. The Base Studios which I mentioned last week in "Interesting Yorkshire Businesses No. 1: The Base Studios Huddersfield" 11 Jan 2013 will hold auditions for the Youth Dance Academy. on 26 Jan

As you can see the Base has sent some lovely photos of its outstanding young dancers.

We at NIPC think that the Academy is an excellent project and will help it any way we can.   We hope our clients and connections around Yorkshire will do the same.

There are many ways you can help:
- You can sponsor the project;
- You can provide a scholarship for a student;
- You can help bring a star to Huddersfield for a master class.

But you don't need to part with brass to help the Academy.

If you know a young dancer you can encourage him or her to audition for the course.If you are in education you can bring it to the attention of local schools and colleges.

Even if you can do nothing else you can spread the word on Facebook and twitter.

"Any support from anywhere would be amazing to help fund the new Youth Dance Academy. Whether is be to offer students scholarships or reduced fees etc etc. Or money to get in some master classes from other teachers/artists to enhance the training on offer etc " says Base General Manager Matthew Slater, 

"I would love the programme to be fully accessible to talented young dancers from whatever financial background and support with that would be amazing!"

Just think how proud you would feel watching one of the kids you helped on a stage in the West End in a few years time.

I you want to help get in touch with Matthew at the Base at 3 New Street, Huddersfield on 01484 428778 or you can contact us and we'll sort you out. :-)

Interesting Yorkshire Businesses No. 1: The Base Studios Huddersfield

With the Choral, Contemporary Music Festival and an exceptional music department Huddersfield already had a good claim to being the most musical small town in England.  Now it can also lay claim to excellence in dance. The Base Studios will be holding a series of courses in ballet, contemporary and jazz for young dancers known as the Youth Dance Academy. Auditions for this new Academy will be held on 26 Jan 2013.

Though the Academy is for the young and gifted the Base does not ignore the rest of us. There is a whole range of classes from adult ballet to zumba.   The instructors are excellent.   Fiona Noonan, for example, who trained at the Queensland Dance School of Excellence and danced in theatres around the world, teaches ballet.  

The Base offers a range of services to businesses such as fashion shows, corporate entertainment and other events.  

Located at 3 New Street you can call the Base on 01484 428778 or follow it on Facebook and twitter.

One More Day to Register for Connect Yorkshire's Business Forum

Connect Yorkshire holds investment forums twice a year.   These forums are an opportunity to present a business proposition to investors with the benefit of coaching on investment readiness and pitching.   A typical programme would consist of the following:

09:00    Registration, Exhibition and Refreshments
10:00    Forum Commences – Introduction & Welcome
10:05    Investment Forum Panel Introductions
10:10    Session 1 Company Presentations
11:25    Exhibition and Refreshments
11.55    Session 2 Company Presentations
13:05    Concluding Comments
13:10    Exhibition, Buffet Lunch & Networking
14:30     Close
The next forum will take place at the offices of DLA Piper in Leeds on 6 Feb 2013 and the closing date for entries is the 2 Jan 2013.   If you want to attend contact Hollie Shenton or call her on 0113 384 5643

100th Post: IP News Roundup - November 2012

Probably the biggest IP news in Yorkshire as it was for the rest of the country was the launch of the Patents County Court small claims track on 1 Oct 2012. I gave a presentation on the new small claims track to the Sheffield Inventors Group on 1 Oct 2012 and have written a lot of articles about it which are linked to Patents County Court - the New Small Claims Track Rules.

Having spent most of my career persuading businesses in Yorkshire and their legal advisers to make more use of the Leeds District Registry and County Court I now find myself settling proceedings or applying for cases to be transferred to the Rolls Building.   Sure, you can still issue claim forms for intellectual property actions in Leeds and in theory you can still have a trial here but why would anyone want to? The Patents County Court can hear claims up to £500,000 in the multitrack, cases are tightly managed, trials must be over in 2 days and there is a recoverable costs ceiling of £50,000. Where the relief sought is simply an injunction the quick, cheap and simple process offered by the small claims track is even more compelling.

And yet. 

When His Honour Judge Blackett-Ord retired as Vice-Chancellor of the County Palatine of Lancaster in 1988 there was a widespread fear that he would not be replaced.  Chancery practitioners in the North mounted a campaign to keep the ancient palatinate jurisdiction which was led by Peter Keenan from my old chambers.   We wrote a memo to the Lord Chancellor to which I contributed an economics argument.   Central to my case was that a chancery court demanded expertise which created an infrastructure of other professionals who could offer a wide range of services such as intellectual property.  Creating a cadre of specialist counsel, solicitors and patent attorneys, I argued, facilitated R&D, the arts and commerce with it the wealth creating businesses that make the difference between a large town and a metropolis.   

I think the renaissance of Leeds as well as Manchester, Liverpool, Newcastle and the other great cities of the North over the last 20 years proves that I was right.   I fear the exodus of intellectual property cases to the Rolls Building could be the beginnings of a haemorrhage of intellectual property expertise in our region.

On a more cheerful note, Leeds Inventors Club enjoyed a fascinating presentation from Gordon Macrae, Special Projects Manager of Gripple on 18 Oct 2012.   Among other things, Gordon spoke about Incub, his company's new product ideas bootcamp which will work with up to six entrepreneurs to evaluate the idea from a technical and market perspective.  Just the sort of thing that inventors need.

Sheffield Inventors Group will welcome Steve Van Dulken on 5 Nov 2012 who gave an excellent presentation to Leeds Inventors on 18 July 2012 (see the Leeds Inventors blog post of his talk for the 18 July 2012). Like me, Steve is a blogger and his "Patent Search Blog" is well worth following.  As I am discussing Sheffield Inventors I should like to express sincere thanks on behalf of the whole membership to Lynne Hinchcliffe for all her sterling work for the group which has grown steadily under her stewardship.  We wish her a long and happy retirement. We look forward to working with Lynne's successor Nicola Avella and congratulate her on her appointment.

Turning from intellectual property to intellectual assets, Huddersfield Choral Society began its winter season with an interesting programme of Vaughan Williams's "Five Mystical Songs" and Brahms's "Ein Deutsches Requiem". Both works offered great scope for Roderick Williams, the baritone soloist who was excellent. There was less scope for a soprano (which was a pity as we had Sarah Tynan) and the chorus; but there was at least one opportunity to hear the inimitable Huddersfield sound in "Der Tod ist verschlungen in der Sieg" in the penultimate movement.  Performing with the Choral was the Royal Liverpool Philharmonic, one of my favourite orchstras, conducted by Vasily Petrenko, one of my favourite conductors.

If you want to discuss any of those topics call me on  0113 320 3232 or send me a message through my contact form. You can also follow me on Facebook, Linkedin, twitter or Xing.

How Small Businesses in Yorkshire can protect their Intellectual Property

The Patents County Court Small Claims Track from Jane Lambert


I have spent most of my career at the intellectual property bar championing small and medium enterprises in the North of England.  Until very recently I would encourage their solicitors and patent and trade mark attorneys to issue proceedings in the Leeds or some other Chancery District Registry unless the claim related to patents, registered or registered Community designs, semiconductor topographies or plant breeders' rights.   The reason I did that is that is that the chancery judges in Leeds have been every bit as good as those in the Royal Courts of Justice - at least since Richard Scott was appointed Vice-Chancellor - and it is nearly always cheaper and more convenient for a business owner and his solicitors in Yorkshire to litigate in Leeds than traipse down to London.

Nearly all these cases were claims for injunctions and in almost every case the action was settled on undertakings or when the claimant obtained or was refused an interim injunction.   In very few of those settlements did the defendant agree to pay any damages at all to the claimant.   In the few cases where he or she did so agree, those damages seldom exceeded £5,000.   It is very rare for an intellectual property claim to go to trial and rarer still for there to be an account of profits or inquiry as to damages.   Indeed, I have had only one brief for an inquiry and that took place in London before Master Bragge.

It follows that many, if not most, of those cases could have been brought before the small claims track of the Patents County Court had it existed at the time.   That jurisdiction has power to grant injunctions and other relief in any intellectual property claim provided that the claim for damages is less than £5,000 except claims involving patents, registered or registered Community designs, semiconductor topographies and plant breeders rights which must still be brought in the Patents Court or the multitrack of the Patents County Court. Thus the small claims judges could hear claims by an inventor against a prospective licensee or investor for the breach of a non-disclosure agreement, an established trader against an upstart competitor who has adopted a similar trade name and labelling or a small manufacturer whose nifty merchandise has been knocked off.

The costs that can be recovered in the small claims track are very low:   up to £260 if counsel or solicitors have been instructed in relation to an injunction plus the costs of issuing proceedings which ranges between £35 and £120 depending on the amount of damages sought and compensation for travelling and loss of earnings for attending a hearing.   Accordingly, the risks are very low which means that intellectual property owners cannot be stymied by security for costs applications.   The procedure has been simplified in that there will be limited disclosure, the strict rules of evidence are relaxed, evidence need not be given on oath, cross-examination can be limited and anyone can represent a party at a hearing even if he or she is not qualified as a lawyer or patent or trade mark attorney.   Indeed, many cases are likely be disposed on on paper.

The Ministry of Justice has appointed no less than five district judges and deputy district judges to this new small claims track of a very high calibre, including the head of litigation of a mobile phone manufacturer, the legal adviser to the Society of Authors, a former partner of Linklaters and a former partner of Barlow Lyde & Gilbert (now Clyde & Co,).   Clearly, the Ministry expects the court to be busy and by the quality of its appointments it has shown that it means business.   As counsel I have great confidence in all of those judges.

So, how do you or your solicitors use this new tribunal?   I gave a brief guide in the above presentation to Sheffield Inventors Group on 1 October 2012 which you can download.   If you missed it I shall give the same presentation again to the Liverpool Inventors Club at the offices of QualitySolicitors Jackson & Canter at 88 Church Street in Liverpool on 29 October at 17:00.   If you want to attend you can book on-line or call Michael Sandys of QualitySolicitors Jackson & Canter on 0151 282 1700.   Admission is free but as space is limited you will need a ticket.

If you don't want to negotiate the M62 or the start of the Merseyside rush hour here is a step by step guide as to what to do:

1. Ask the other side nicely to stop whatever they are doing.   You need to send a letter before claim in accordance with Annex A of the Practice Direction - Pre-Action Conduct.  You must be careful how do that otherwise you could end up getting sued yourself for groundless threats as indeed could your solicitor if he does not know much about intellectual property. I kid you not.  I have given some guidance as to how that can be done in "IP Dispute Resolution in England and Wales: why sending a US style “Cease and Desist Letter” or old style “Letter before Action” may not be a good idea" JD Supra 13 Jan 2012 and I have even drafted a model letter before claim for a design right dispute.  You are likely to be better off getting a barrister, solicitor or patent or trade mark attorney to draft such a letter for you and I will do one for you or your solicitor for a fixed fee if you want to get in touch. You are likely to be even better off if you get a specialist solicitor to put it on her notepaper and, if you don't have a specialist solicitor in Yorkshire, Kate Reid of Pemberton Reid sends letters drafted by me on her stationery for an extra £100 + VAT.  I have arranged with solicitors and patent and trade mark agents in other parts of the country to offer similar deals to my clients.
2. Issue your claim form out of the Rolls Building    A claim form is what we used to call a writ and blank forms can be downloaded from HMCT Service website or obtained from the Court. You have to issue it out of the public counter of the Rolls Building off Fetter Lane in London and pay the fee that I mentioned above.   The claim form must be accompanied by particulars of claim which should set out your claim in detail.  In addition to specifying your right, how it has been infringed and the remedy you require you must say that you have complied with the Practice Direction - Pre-Action Conduct and that you want this case to proceed in the small claims track.   Again, this is tricky and you main need some help.   Again, I am happy to settle particulars of claim for a fixed fee if you would like to contact me,   You must then serve the claim form with the particulars of claim and a response that on the other side or get the court to do it for you.   It is very important that you serve all the paperwork or you case will stall and any order or relief that you may be granted will be set aside.
3. Wait for the other side to respond.   They have a fixed time to lodge their defence and any counterclaim against you the duration of which will depend on whether you complied with the Practice Direction.   If they don't lodge their defence in time you can apply to the court for judgment in default of defence which will probably require a hearing if you want an injunction.   If they do respond in time the court will give directions which may include fixing a date for a final or a preliminary hearing.   You must comply with all the directions of the court within the time specified if you want to get into or remain in the judge's good books.    
4. Attend the Hearing    Unless the judge has indicated that your case is suitable to be disposed of in writing and everyone has agreed you must attend the hearing which will take place in the Thomas Moore Building in the Royal Courts of Justice which is a few hundred yards from the Rolls Building.   The judges of the Patents and Patents County Court have said in their guide that they will sit in London for the convenience of the parties and to save costs but I have only known a few occasions when they have done so.   You should have enough notice of the hearing to book a saver ticket and a Travelodge so it is hardly going to break the bank if you go to London and you should get some of your dosh back if you win.   Also, you and your Mrs. (or hubby) can combine a trip to the court with a visit to some of the other attractions that the Smoke has to offer.

If you want to learn more about this small claims track there is loads of info including links to my other articles and other guidance at "Patents County Court - the New Small Claims Track Rules" 20 Sept 2012 in my IP/IT Update blog.   You can also give me a bell on   0113 320 3232 begin_of_the_skype_highlighting            0113 320 3232      end_of_the_skype_highlighting or send me a message through Facebook, Linkedin, Xing or twitter or indeed my contact form.