Philip Price & Ors v Flitcraft Limited & Ors

Costs are discretionary. Although the unsuccessful party will ordinarily pay the successful party’s costs, the court must consider all the circumstances, including conduct and success on distinct issues. Where issue-based costs orders would create assessment difficulties, the court may adopt a broad-brush apportionment based on the issues and the evidence at trial. Separate claims brought by different claimants should be assessed separately, so that one claimant is not made to pay costs attributable to another claimant’s successful claim. A late amendment or joinder does not automatically justify depriving a party of costs incurred before it. The effect depends on the facts, including whether the change materially altered the case or caused additional costs.

This was a first-instance costs judgment following the court’s earlier findings in the patent, copyright and passing-off claims. The first claimant’s patent and copyright claims failed for want of title. The second claimant succeeded in part on its patent infringement claim, but failed in relation to some products and abandoned another patent claim. The collective passing-off claim failed.

The court had to determine how the parties’ costs should be apportioned, whether indemnity costs were justified, what effect should be given to the late joinder of the Official Receiver under section 67 of the Patents Act 1977, and whether costs should be paid on account.

1. Discretion and general rule. The court applied CPR r.44.2. The unsuccessful party ordinarily pays the successful party’s costs, but the court must consider all the circumstances, including conduct, the issues on which each party succeeded, and the manner in which the case was pursued.
2. Broad-brush apportionment. An issue-based order may create substantial difficulties at detailed assessment. A broad-brush percentage order is appropriate where it provides a fairer and more practicable allocation. The court apportioned the action’s costs between patent, copyright and passing-off claims, then divided the patent costs between the first claimant’s separate claim and the second claimant’s claim.
3. Patent claims. The first claimant was liable for the defendants’ costs of his failed patent claim, assessed on an indemnity basis because it was founded on a purported assignment found to be fictitious. The second claimant was treated as the successful party on its patent claim against the relevant defendants, but its recoverable costs were reduced to reflect its abandoned claim, its failure concerning the new products, and its director’s conduct in supporting false evidence.
4. Late joinder. The second claimant had to pay the costs of the joinder application. However, the late joinder did not justify depriving it of its costs before joinder or making it pay the defendants’ earlier costs. Section 67 of the Patents Act 1977 principally addressed quantum in this case, and the joinder did not materially increase the costs of liability. The court applied the fact-sensitive approach in Begum v Birmingham City Council and distinguished the materially different amendment in Beoco Ltd v Alfa Laval Co Ltd.
5. Other claims and payment on account. The first claimant was liable for the defendants’ standard-basis costs of the copyright claims, and the claimants collectively were liable for the passing-off costs. The court directed evidence and submissions to estimate payments on account under CPR r.44.2(8).

First-instance costs judgment following the court’s findings in [2022] EWHC 3381 (Pat). No appeal is stated in the judgment.