IPEC reduces cost award by 50% following settlement offer

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The costs decision in Bocacina Ltd v Boca Cafes Ltd [1] followed the trial judgment, delivered last October, in which the claimant succeeded in a passing off action against a cafe business that had set up in close proximity to the claimant’s restaurant. The Intellectual Property Enterprise Court (the IPEC) found that a significant number of members of the public would be likely to be confused into thinking the two businesses were connected given their geographic proximity and that both words started with “Boca”. The defendant’s registered trade mark BOCA BISTRO CAFÉ was declared invalid.

In the costs judgment, Daniel Alexander QC, sitting as a judge of the IPEC, awarded the claimant 90 per cent of its costs up until the date of the defendant’s settlement offer and awarded a reduced recovery of 50 per cent from that date. The settlement proposal had contained an offer to change the name of the defendant business and to surrender the trade mark. In the judge’s view, this effectively amounted to giving in and leaving the claimant with no cause for complaint nor grounds for continuing the litigation. The judge considered that after the date of the settlement the dispute became one about costs.

The claimant’s position in rejecting the offer was not completely unreasonable – in particular, the proposed settlement made no mention of a contribution towards the claimant’s costs – but the judge reminded himself that the objective of the IPEC is not simply “to decide cases more efficiently and cheaply but also to help SMEs resolve disputes without the need for trial”. Costs were invariably an obstacle to early dispute resolution and, in the judge’s words, “one of the ways in which this court can achieve this aim is to take account of reasonable admissible offers made to settle a case at an early stage of proceedings in determining what costs should be paid, if an action is pressed to trial in the face of such offers”.

The judge was as good as his word, reducing the costs awarded to just 50 per cent.

The case is further proof, if it were needed, of the tough approach the IPEC is taking on costs and the imperative of making and responding sensibly and promptly to settlement offers made in IPEC proceedings, particularly in IP disputes where the infringing act has already ceased.


[1] [2014] EWHC 26 (IPEC)