Understanding Breach of Contract & Available Options
30th April 2020
A contract is an important requirement of any transaction or business relationship. The contract sets out obligations of all parties…
Litigation
The Intellectual Property Enterprise Court (IPEC) is a specialist court within the Business and Property Courts in London. It was established to make IP litigation more accessible and proportionate for smaller businesses and individuals – with costs and damages caps that the main Chancery Division and Patents Court do not have.
Within IPEC sits the Small Claims Track (SCT): a dedicated procedure for IP disputes with a value of up to £10,000. It is the most accessible IP court in England and Wales, and the right starting point for the majority of copyright, trade mark, and design right disputes involving modest sums.
What Disputes Can Be Brought in the IPEC SCT?
The Small Claims Track covers four types of intellectual property dispute:
1. Copyright infringement This is by far the most common category. Photographers, designers, illustrators, writers, and musicians regularly use the IPEC SCT to pursue businesses that have used their work without permission or without paying the agreed fee. Common examples include:
- A photograph used on a website, social media account, or in advertising without a licence
- Graphic design reproduced in marketing materials without the designer’s consent
- Written content copied from one website and republished on another
- Music played at an event or used in a video without clearing the relevant rights
If you created something, an image, a piece of writing, a design, a piece of music, you own the copyright in it automatically. No registration is required in the UK. If someone has used it without your permission, you have a potential claim.
2. Trade mark infringement Where a business has used a registered trade mark without the owner’s licence, for example, selling goods under a confusingly similar name, or using a mark in advertising, the SCT provides a route to compensation and an order requiring the infringer to stop.
3. Unregistered design rights Unregistered UK design right protects the internal and external shape or configuration of original designs. If someone has copied the design of your product, you may have a claim without needing a registered design.
4. Passing off Where a business has misrepresented its goods or services as those of another, for example, by using a confusingly similar brand name, get-up, or presentation, there may be a claim in passing off even without a registered trade mark.
What the SCT does NOT cover: Patent disputes are not within the Small Claims Track, even for small-value claims. Patent cases must be brought in the main IPEC track (which has its own costs and damages caps) or in the Patents Court. If your dispute involves a patent, see our patent enforcement guidance.
Who Uses the IPEC SCT?
The SCT was designed with smaller claimants in mind, and the majority of users are individuals and small businesses who would not have the resources to pursue or defend IP litigation in a more expensive court. In practice, the most common users are:
Freelance photographers are the single largest category of claimants. The ready availability of images online, and the ease with which they can be downloaded and reused without licence, means that professional photographers regularly find their work reproduced without payment. The SCT provides a proportionate route to recover reasonable compensation – typically a licence fee they should have been paid in the first place, plus additional damages where appropriate.
Designers and illustrators face the same problem as photographers: their work is visual, findable online, and easily reproduced. The SCT is the main forum for pursuing businesses that have used commercial illustration or graphic design without a licence or beyond the scope of one.
Small businesses with brand disputes – particularly those who have found a competitor trading under a similar name, logo, or product presentation can use the SCT to pursue trade mark or passing off claims without the expense of full High Court litigation.
Defendants are typically businesses, often small to medium-sized, that have received a letter of claim alleging infringement and need advice on whether the claim has merit and how to respond.
How Does a Claim Work?
Starting the Claim
Claims in the IPEC SCT are issued at the Business and Property Courts, which are based at the Rolls Building in Fetter Lane, London EC4. Claims can be started online through Money Claim Online for straightforward money claims, or by issuing a claim form (N1) at the counter.
A court filing fee is payable when issuing the claim. The fee depends on the value of the claim and is set by HMCTS.
The Procedure
The SCT uses a simplified procedure designed to keep costs proportionate. Key features are:
- No oral hearings before the final hearing in most cases. Preliminary issues and directions are dealt with on paper.
- Disclosure is limited. Unlike the main IPEC track and the High Court, the SCT does not involve wide-ranging disclosure of documents.
- Expert evidence is restricted. In most cases, expert witnesses are not needed.
- Witness statements are the main form of evidence. Both parties exchange written statements of the evidence they will rely on.
The court will usually send directions setting out what each party needs to file and by when, and listing a date for the final hearing.
The Hearing
IPEC SCT hearings are informal by court standards. They take place before a deputy district judge or district judge, usually in a hearing room rather than a formal courtroom. Hearings are typically listed for between 30 minutes and two hours.
The judge will have read the papers in advance. The parties (or their representatives) present their cases, respond to the other side’s points, and answer the judge’s questions. The judge will usually give a judgment on the day or within a short time of the hearing.
After the Hearing
The winning party is entitled to their court fees and, potentially, a limited amount for legal advice, currently up to £260 for legal advice in connection with obtaining an injunction. Solicitors’ costs are not recoverable in the SCT beyond this.
The losing party will be ordered to pay damages (or other relief awarded) and the court fees of the winning party.
How Much Can You Recover?
The SCT has no formal damages cap – unlike the main IPEC track (where damages are capped at £500,000), the SCT is limited to disputes valued at £10,000 or less, but within that value there is no separate damages cap.
In practice, damages in copyright cases are most commonly calculated as:
- A licence fee — what you should have been paid for the use of your work. Courts apply the “user principle”: even if you have suffered no actual loss, you are entitled to a reasonable licence fee for the unlicensed use.
- Additional damages — under section 97(2) of the Copyright, Designs and Patents Act 1988, the court can award additional damages where the infringement was flagrant or the defendant benefited significantly from it.
In trade mark cases, the claimant may elect between damages (their actual loss) and an account of the defendant’s profits.
Do You Need a Solicitor?
The SCT is designed to be usable without a lawyer. Many claimants represent themselves successfully, particularly in straightforward copyright disputes where the infringement is clear and the amount in dispute is modest.
However, there are situations where representation adds significant value:
When the other side has a solicitor. If the defendant is legally represented, you are at a disadvantage in presenting your case without legal training. The judge will try to ensure fairness, but cannot do your preparation for you.
When the legal question is not straightforward. Copyright infringement is not always as clear-cut as it looks — questions about subsistence of copyright, the scope of an implied licence, or the calculation of damages can require legal knowledge to argue effectively.
When documents need to be organised and argued from. Evidence preparation, gathering the right documents, presenting them in the right order, identifying the key points, benefits significantly from legal experience.
When your case is listed in a blitz sitting. Blitz hearings are concentrated sessions where multiple cases are heard in a single day. The time pressure is intense, and preparation matters even more than usual.
Because solicitors’ costs are not recoverable in the SCT, the calculation is straightforward: the fixed fee for representation is either worth it to you, given the value of the dispute and your assessment of the help it provides — or it isn’t.
Freeman Harris offers fixed-fee small claims representation. If you would like an assessment of your case and a fee quote, contact us.
Key Facts: IPEC SCT at a Glance
Disputes covered: Copyright infringement, trade mark infringement, unregistered design rights, passing off
Value limit: Up to £10,000
Where to issue: Business and Property Courts, Rolls Building, Fetter Lane, London EC4
Hearings: Informal, typically 30 minutes to 2 hours
Costs: Solicitors’ costs are not recoverable (apart from a small fixed sum for injunction advice). Court fees are recoverable by the winner.
Typical timeline: Issue to hearing in 3–6 months
Legal representation: Permitted and often advantageous — not required
Further Reading
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