Master Data Center, Inc v The Comptroller General Of Patents (Costs)

Under CPR 52.19, the court may cap recoverable appeal costs where first-instance costs were normally limited or excluded. The discretion requires consideration of the parties’ means, all the circumstances, and access to justice. The public status and statutory duties of a regulator may weigh significantly in favour of a cap, particularly where unrestricted costs could deter public-interest appeals. The court must also consider whether the appeal raises an issue of principle or practice on which substantial sums may turn. A cap limits recoverable costs; it does not underwrite the resisting party’s litigation choices. For permission to appeal an appeal under section 97(3) of the Patents Act, the ordinary CPR 52.6 test applies because the second-appeal provisions in CPR 52.7 do not apply.

Master Data Center, Inc and Genentech, Inc appealed ex parte decisions of the UK Intellectual Property Office. The Comptroller General applied for an order under CPR 52.19 limiting the recoverable costs of each appeal to £30,000. Master Data resisted the application; Genentech did not actively resist it.

The court had dismissed both appeals in an earlier judgment, [2020] EWHC 572 (Pat), and considered the costs application because a further appeal was possible. It also considered both appellants’ applications for permission to appeal. The issues were whether recoverable costs should be capped, at what level, and which permission-to-appeal test applied.

1. The court held that the UKIPO proceedings were proceedings in which costs recovery was normally limited or excluded. Paragraph 17 of TPN 2/2000 provided that costs were not awarded in the relevant ex parte proceedings. CPR 52.19(1) therefore conferred a discretion to limit recoverable appeal costs.

2. That discretion was exercised by reference to the factors in CPR 52.19(2): the parties’ means, all the circumstances, and the need to facilitate access to justice. Both Master Data and the UKIPO had substantial resources. The UKIPO’s status as a public body, its public duty to administer the patent system, and the importance of the points of public principle raised by the appeals weighed in favour of protection from potentially substantial costs liability.

3. The urgency of the appeals and Master Data’s limited alternatives to litigation also supported a cap. Although unrestricted liability might have a chilling effect on the Comptroller’s pursuit of meritorious public-interest appeals, the court found no comparable access-to-justice difficulty for Master Data. The fact that the appeals raised an issue of principle or practice did not prevent an order under CPR 52.19(3), because it was unclear whether substantial sums would turn on the issue and the circumstances were likely to be rare.

4. The recoverable costs were capped separately at £25,000 for each appeal. The cap was informed, but not determined, by the Comptroller’s own costs. It was not intended to underwrite the litigation choices of the party resisting the application.

5. For permission to appeal, the court applied CPR 52.6. Following Smith International Inc v Specialised Petroleum Services Group Limited [2005] EWCA Civ 1357, the second-appeal provisions in CPR 52.7 did not apply to appeals under section 97(3) of the Patents Act. Permission was refused because the judge had reached the same conclusion as the hearing officer for substantially the same reasons, relying on Tulane. The same conclusion followed on reconsideration of Genentech’s first ground, and permission was also refused on its remaining grounds.

• UK Intellectual Property Office: ex parte decisions were appealed under section 97(3) of the Patents Act.
• High Court (Patents Court): both appeals were dismissed in the earlier judgment, [2020] EWHC 572 (Pat). The present judgment determined the costs-capping application and refused permission to appeal.