By Marcus Leach

Small and medium sized businesses (SMEs) are set to benefit from a new law that comes into force on Tuesday which will give them easier access to justice to protect their patent and design rights.

A damages cap of £500,000 for claims made in the Patents County Court (PCC) means small companies claiming damages up to that amount are less likely to face a potentially more expensive trip to the High Court.

The Patents County Court (Financial Limit) Order 2011 creates a clearer definition of what disputes can be heard in the PCC and which ones should go to the High Court. Previously, a business with a legal case worth less than £500,000 could face litigation in either court with unknown levels of financial risk.

The change in law will ensure that lower value, less complex cases, which would typically involve small businesses, will automatically fall within the jurisdiction of the lower, cheaper PCC. Therefore the risk of having costly disputes over where the case should be heard will be reduced. In the past some companies were put off protecting their rights due to the uncertainty of how much it would cost.

Minister for Intellectual Property, Baroness Wilcox said:

“Maintaining an effective and efficient intellectual property framework for businesses is not enough to drive innovation. We must offer businesses a more accessible justice system for them to enforce their rights. By making it easier for small firms and entrepreneurs to use the legal processes it will give them more time to concentrate on business activities.

“These changes will help small businesses and encourage them to innovate. It will also provide clarity over the legal processes, certainty over the risks and give small enterprises the confidence to stand on an equal footing with financially stronger companies.”

Support for the limit was expressed by small and medium sized businesses during a full public consultation on the reform of the PCC. The effectiveness of the damages cap will be monitored with a formal review in 2014.

Work is now underway to expand the law further so the damages cap will cover cases of copyright and trade marks in the PCC.

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