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You are here: BAILII >> Databases >> England and Wales Patents County Court >> Wilkinson v London Strategic Health Authority [2012] EWPCC 55 (23 November 2012) URL: http://www.bailii.org/ew/cases/EWPCC/2012/55.html Cite as: [2012] EWPCC 55

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IN THE PATENTS COUNTY COURT

		Rolls Building 7 Rolls Buildings Fetter Lane London EC4A 1NL
		23/11/2012

His Honour Judge Birss QC :

1. This judgment relates to the costs of the action which was the subject of my main judgment at [2012] EWPCC 48. The representation is the same as it was at trial. The parties cannot agree who has won.
2. Ordinarily the answer is obvious. Even if there is a dispute about it, the matter can usually be resolved fairly readily at the hearing when judgment is handed down. In this case that did not prove possible. Much of the argument, and some relevant material, only emerged at the hearing and it would not have been fair to either side to decide the matter without taking time to consider it. Apart from anything else, it became clear at the hearing that the costs dispute is very significant. Indeed since 2^nd May 2012 on one view the only dispute between the parties was about costs. Once I have decided what the overall costs order should be, there will be yet further argument. That will be dealt with on paper.
3. The court's discretion about costs is governed by CPR r44.3. The general rule is that the unsuccessful party will be ordered to pay the costs of the successful party but the court may make a different order (r44.3(2)). In deciding what order (if any) to make about costs the Court must have regard to the conduct of the parties, whether a party has succeeded on part of his case, even if he has not been wholly successful and any payment into court or admissible offer to settle made by a party which is not an offer to which the costs consequences under Part 36 apply (r44.3(4)). Conduct includes conduct before as well as during proceedings and whether it was reasonable to raise, pursue or contest a particular point (s44.3(5) (a) and (b)).
4. A summary of the general approach was approved by Jacob LJ in MMI Research v Cellxion [2012] EWCA Civ 139 at paragraph 4:

"The correct approach is to ask oneself three questions. First of all, who has won; secondly has the party that has won lost on an issue which is suitably circumscribed to deprive that party of the costs of that issue and, thirdly, is the case a suitably exceptional one to justify making a costs order on that issue against the party who has won overall."

5. Each side submitted that they were the winner. Ms Reid referred me to the judgment of Floyd J in Omnipharm v Merial [2012] EWHC 172 (Pat) which itself referred to the words of Lord Bingham, as follows:

6. A significant issue which has divided the parties in relation to the costs of this particular case is, who has won. The approach of the court to determining that question has been set out most authoritatively by Lord Bingham, the Master of the Rolls, in Roache v News Group Newspapers [1998] EMLR 161 at 168 where he said this:

"The judge must look closely at the facts of the particular case before him and ask: who, as a matter of substance and reality, has won? Has the plaintiff won anything of value which he could not have won without fighting the action through to a finish? Has the defendant substantially denied the plaintiff the prize which the plaintiff fought the action to win?"

6. In this case there are three distinct matters to be considered. They are (i) the question of success and failure in terms of the issues decided in the proceedings, (ii) a particular interim costs order, and (iii) the position considering the without prejudice correspondence. No separate question of conduct arises.
7. A further complication is that although in many cases one can safely and fairly make costs orders for percentage shares of a party's costs, offsetting one side's costs against the other's and avoiding an assessment of two sets of costs, in this case that is not possible at least at this stage because the parties' costs positions are different. The claimant's legal team is working, at least in part, on a CFA with ATE insurance. The impact of this on costs cannot yet be decided since it depends at least to some extent on this decision. There was also a point raised in argument about whether the rates on which the defendant's solicitors have been working reflect a special arrangement with the defendant. The point was raised in reply and as a result the defendant did not respond orally. After the hearing the rates were explained to be consistent with what the defendant's solicitors charge their public sector clients.

(i) Success and failure in relation to the issues tried in the proceedings

8. The problem in this case is simply that the claimant had two claims and has won on one of them and lost on the other. Broadly speaking the action is pleaded as a claim for infringement by the defendant of the copyright in Dr Wilkinson's Established Works. The relief claimed in the Particulars of Claim included all the usual relief one would expect in an action for copyright infringement such as an injunction. On the claim for copyright infringement the claimant has failed. The order made today will include a declaration that the defendant does not infringe and will dismiss the claim for infringement. However, the action was not just a claim for copyright infringement. The parties did not agree about who owned the underlying copyright itself. From the outset the relief sought in the Particulars of Claim included claims for a declaration that Dr Wilkinson owned the copyright in the Established Works. The declaration was resisted by the defendant. A key aspect of the defendant's case has always been that Dr Wilkinson's copyright had been assigned to the defendant as a result of the 2007 Agreement and the work done pursuant to it. On this claim Dr Wilkinson has succeeded and an appropriate declaration has been made.
9. Mr Hamer submits that the claim for a declaration of ownership was very important to Dr Wilkinson and was the reason the entire dispute began in the first place. The defendant said that clause 6.6 of the 2007 Agreement had the effect of transferring Dr Wilkinson's existing "background" copyright to the defendant. Mr Hamer referred to an email of 15^th May 2008 from Robert Cockburn of the defendant which makes the defendant's position clear, stating:

"the clause is drafted specifically to draw in relevant background rights (i.e. work created before the agreement was signed) as well as foreground rights (i.e. work created directly pursuant to the agreement). … I do not see how it could be argued that this was not clearly intended to capture background IPR. This clause, I would argue, has the effect of assigning the background IPR to SHA as I understand was the intention of the SHA in entering into this agreement."

10. Mr Hamer informed me that it was this assertion by the defendant which prompted Dr Wilkinson to instruct counsel to prepare draft Particulars of Claim, although by the time the draft particulars had been sent in September 2008, the claimant had notice that the defendant intended to license the SHA works to third parties outside England and so a claim for infringement was included as well. In support of his argument that the ownership issue was very important to Dr Wilkinson, Mr Hamer submitted that it meant the claimant would not have been able to mark her own works with her copyright notice. While that may not seem much to some, for Dr Wilkinson, the whole of her working life had been devoted to developing the Wilkinson Variant and the copyright notice was a clear sign it was all her work.
11. Ms Reid challenged this version of events, pointing out that it was clear Dr Wilkinson had taken legal advice at an earlier stage, before the email from Rob Cockburn. Ms Reid is correct, but it does not undermine the point Mr Hamer is making, which is simply to emphasise the importance of the ownership issue itself to Dr Wilkinson. From the point of view of her work as a trainer offering the Wilkinson Variant, it is important to Dr Wilkinson that she has and can state that she has the copyright in her materials.
12. However, what is also clear is that this case is not and never has been just about ownership of the copyright in the Established Works. The allegation of infringement was critical. Dr Wilkinson has always claimed that any use of the SHA works beyond the Connected programme within NCAT itself would infringe her copyright because the SHA works reproduced substantial parts of the Established Works and, although use for Connected was licensed, any other use was not. In her letter to Teresa Moss on 16^th April 2008 Dr Wilkinson raised three concerns. One is irrelevant, one is the ownership issue and the third is that "I receive appropriate reward and recognition for the substantial contribution that I have made (not least, through IPR) to the Unified Model". In that respect she sought an annual royalty or one off licence fee. A fee of £500,000 was mentioned. Dr Wilkinson is clearly and properly embarrassed about that sum now and, in fairness to her, significantly lower sums were discussed at a meeting a few days later (£20,000). However, it is abundantly clear that from the SHA's point of view they were facing a significant potential infringement claim by Dr Wilkinson.
13. I should mention that the 16^th April letter also suggests that that the ownership issue has been resolved but that came before the email from Rob Cockburn (above).
14. Between 2008 and 2011, the parties attempted to settle and conducted a mediation, to no avail. The proceedings were issued in March 2011 in the High Court. In July 2011 a case management conference (cmc) took place before Master Moncaster. The defendant sought transfer to the Patents County Court. The claimant resisted transfer on the ground that it was worried that its costs incurred in the High Court would be covered by the PCC cap. The claim was transferred to the PCC and the order recites the parties' agreement that the pre-transfer costs would be not be capped. Master Moncaster ordered one third of the costs of that hearing to be paid by the claimant and reserved the balance to be decided in the PCC. The parties did not agree what was to be done about those costs and that is the second matter I need to consider (below). It is a free standing point.
15. In September 2011 there was some correspondence about what had taken place before the Master. In it the claimant's solicitors reiterated that the very reason the proceedings were brought was because the defendant asserted that the copyrights in the Established Works vested in the defendant.
16. Once the case had been transferred, a case management conference took place in the PCC in January 2012 and directions given for trial. The trial was held in October 2012.
17. Mr Hamer submitted the case at trial could be seen as being comprised of the following issues (he counted five but I make it six): (1) whether Dr Wilkinson had assigned her copyright in the Established Works, (2) subsistence of copyright in the Established Works and whether parts of them had been reproduced in the SHA works, (3) whether copyright in the Established Works vested in the claimant at all prior to the 2007 Agreement as a result of her employment status, (4) whether the copyright was in part owned by Anita Roberts, (5) whether the defendant had a licence under the copyright in the Established Works and (6) was that licence wide enough to cover what the defendant wished to do? I agree with Mr Hamer that the issues can be broken down this way. There were other points (e.g. estoppel) but they do not need to be considered separately.
18. Mr Hamer submitted that Dr Wilkinson won on the first five issues.
19. Clearly Dr Wilkinson won issue 1. This was a significant issue at trial. Mr Hamer submitted that issue 2 was an unnecessary complication and a waste of costs which the defendant should have conceded. In any case Dr Wilkinson won that point. Although issues 3 and 4 did not take up much time at trial they were issues which were live and had to be dealt with in the preparation up to trial and did occupy some time at trial. On issue 5, Mr Hamer submitted that the defendant had never accepted that it had a licence, which is true but it is really not a free standing point. In my judgment issues 1 and 5 go together in that if Dr Wilkinson lost issue 1 there would be no licence whereas if she won issue 1 then there was plainly a licence; the only question was about its terms (issue 6). Clearly Dr Wilkinson lost on issue 6. On this basis Mr Hamer submitted the defendant should pay 70% of Dr Wilkinson's costs, reflecting his argument that the defendant had won only on a single issue, which was an issue involving modest additional time and cost.
20. Ms Reid's submissions were diametrically opposed to Mr Hamer's. She contended that the correct costs order was an order for the claimant to pay the defendant's costs or at least a substantial part of them.
21. Ms Reid contended that infringement was the main issue and on that the defendant had prevailed. Dr Wilkinson had claimed the right to restrict the defendant's exploitation of the Connected programme and her claim had been dismissed. She pointed out that in the Defence the defendant had stated that it was willing to assign back to Dr Wilkinson the copyright in the Established Works in return for a royalty free licence essentially the same as the implied licence I have found to exist. As Mr Hamer points out, that willingness is predicated on the defendant's position that the contract had indeed led to the assignment of the copyright to the defendant in the first place. Nevertheless it is a matter to be taken into account.
22. In terms of the issues at trial, Ms Reid accepted that Dr Wilkinson had won on some of the issues but submitted that they had been reasonable matters for the defendant to contest. On issue 2, Ms Reid pointed out that Dr Wilkinson had conceded that three documents from the Established Works were not reproduced. Moreover it was part of the issue of infringement and the defendant had won on that point. On issues 3 and 4, given the state of disclosure and Dr Wilkinson's evidence, the defendant's position was reasonable. Issue 5 was negligible and went with issue 1 (I agree, see above). As regards issue 6, Ms Reid submitted that a large amount of disclosure went to the question of the extent of the licence, dealing with matters such as whether the licence would be limited to certain institutions (HEIs) and limited to cancer care. On that Dr Wilkinson lost.
23. Ms Reid also submitted that some of the trial bundles had been unnecessarily produced by the claimant, in particular the three "H" bundles. These bundles consisted of copies of various papers by Dr Wilkinson but I do not accept that a significant criticism arises here. Ms Reid submitted that there had been no reliance by Dr Wilkinson on the earlier work and to illustrate the point she submitted that there had been no reliance on the PhD until the middle of trial when Dr Wilkinson was cross-examined. That submission is not right. A running point in this case, which the defendant did not face up to, has been that Dr Wilkinson always contended that although she relied on the latest versions of her Established Works, they were in fact derived from her earlier materials such as her PhD. Bundle H2 was a copy of the PhD thesis. The claimant's case on this did not emerge in cross-examination, it was set out earlier in the Part 18 Further Information. That document made a clear reference to the PhD thesis as a source. In my judgment the need for the H bundles was due to the defendant's insistence on contesting issues of subsistence, original title (prior to the 2007 Agreement) and reproduction in this case.
24. Before considering the without prejudice correspondence, I will state my views thus far. Based on a consideration of the open conduct of these proceedings and the trial, it would be unreal simply to pick a winner in this case and try to declare one party the winner and the other the loser. That is not a fair reflection of what happened. Both sides achieved a measure of success and the relief granted includes orders each side wanted against resistance from the other. I recognise that as far as the defendant is concerned, as long as it was free to exploit the Connected programme as it saw fit, it did not care who owned the copyright in the Wilkinson Variant. It has won the important prize of freedom in relation to the Connected programme. The defendant was prepared to give the Established Works' copyright to Dr Wilkinson, but it was never prepared to accept that the contract had not captured Dr Wilkinson's IPR in the first place. The distinction between capturing the IPR and offering to give it back to Dr Wilkinson as opposed to never having acquired it in the first place may not seem much to the defendant but it was significant to Dr Wilkinson and the claimant has herself achieved a measure of success in these proceedings. Offering to return an item of property is not the same as acknowledging you have not acquired it in the first place.
25. Simply considering the relative importance of the successes achieved by each side, I am sure the defendant's success is of much more weight than the claimant's but when I then consider the issues dealt with during the proceedings and argued out at trial, on which the costs have actually been incurred, the balance shifts the other way. A significant cause of the costs in this case is because the defendant fought more or less every point and lost on many of them. Issues 2, 3 and 4 accounted for a significant part of the cost of this case. Issue 2 (reproduction) in particular is best seen as part of the infringement case but it would not be fair to allow the winner of the infringement case (defendant) to recover those costs. Indeed I think this is a suitably exceptional situation for the winner on infringement (the defendant) to be ordered to pay the costs of the loser (the claimant) on issue 2. It was plain from the outset that copyright subsisted and that the SHA works contained substantial parts of at least some of the Established Works and it is fair that the defendant pays Dr Wilkinson's costs on that issue. If I regard issues 3 and 4 as costs in the infringement case, it would also be unfair to have the loser (the claimant) pay the winner's costs albeit that I do not think those issues are suitably exceptional to justify ordering the winner (the defendant) to pay the loser's costs.
26. As to the other issues, the claimant won issue 1 and the defendant won issue 6. I do not accept that it is meaningful to regard issue 5 as a suitably distinct point.
27. So, absent other factors, the costs order I would make is that the defendant should pay the claimant's costs of issues 1 and 2 while the claimant should pay the defendant's costs of issue 6. Rather than assess the costs by reference to issues directly, I am in a position to reflect these costs in terms of a percentage share of the costs. In my judgment issue 2 accounted for about 20% and issues 3 and 4 together accounted for 10%. That leaves 70% of the costs of the action. In terms of costs, issues 1 and 6 are difficult to separate since they both involved considering the background and context of the agreement including much of the disclosure and evidence as well as the main argument about the terms and effect of the contract. I think a fair share of that cost as between issues 1 and 6 is half each (35%). Thus, absent other considerations I would order the claimant to pay 35% of the defendant's costs and the defendant to pay 55% of the claimant's costs (35% plus 20%).

(ii) Order on the High Court costs reserved

28. On the costs reserved by Master Moncaster in the High Court, Mr Hamer submitted that the two thirds costs reserved by the Master should be paid by the defendant and so overall, setting that off against the order already made, one third of the costs of that hearing should be paid by the defendant to the claimant. Ms Reid submitted the two issues reserved to the PCC were a preliminary issue sought by the defendant and the defendant's request for further information. No preliminary issue was ordered but significant further information was ordered. So she submitted that of the costs reserved a further one third should be paid by the claimant. Her position on the balance was, I think, costs in the case.
29. In relation to the reserved High Court cmc costs, I think it is fair to regard one third as relating to the preliminary issue application and one third for the further information. The application for a preliminary issue did not succeed and the defendant should bear those costs whereas the request for further information did succeed to a significant extent and the claimant should bear those costs. So the order for those costs will be each side pays one third of the other's costs.

(iii) The without prejudice correspondence

30. I now turn to consider the without prejudice correspondence.
31. On 8^th May 2009 the defendant's solicitors wrote to the claimant's solicitors on a without prejudice save as to costs basis. The letter was not an offer as such but was seeking to clarify the issues between the parties. It does not help either side. Although it states that the defendant had never said they would restrict Dr Wilkinson's use of the Wilkinson Variant, it did not state that the defendant accepted that Dr Wilkinson owned the copyright in the Established Works.
32. A mediation took place on 30^th July 2009 but did not succeed in reaching agreement. On 2^nd September 2009 the defendant's solicitors made a without prejudice save as to costs offer to the claimant to settle the case. The offer was to assign to Dr Wilkinson any copyright in the Established Works transferred under the 2007 Agreement in return for a licence. The terms of the licence in the letter are the same as the implied licence I found to exist in the main judgment. The letter offered that each side be responsible for their costs. The offer was not accepted. Mr Hamer informs me that at least one reason it was not accepted was costs. By then Dr Wilkinson had incurred legal costs in the dispute and the offer did not offer to pay them. He submitted Dr Wilkinson was entitled to insist on at least some contribution towards her costs at that stage.
33. Ms Reid contended that the judgment of Tugendhat J in Citation Plc v Ellis Whittam Ltd [2012] EWHC 764 (QB) showed that Mr Hamer was wrong. In Citation Plc the claimant's case was struck out as an abuse of process and the defendant sought its costs, including the costs incurred pre-action under the Defamation Pre-action protocol. The claimant submitted the defendant should pay the costs up to the claim form and there should be no order for costs after that. The judge decided to award the costs incurred after the claim form was served to the defendant but to make no order on the pre-action costs. Once the action began costs should follow the event. As for the costs incurred before the proceedings, the claimant should not have commenced proceedings and if it had not done so then the defendant could not have sought an order for costs. The fact the claimant did start proceedings ought not to lead to the result that the claimant becomes liable to pay costs which it would not have been liable to pay if it had not started the proceedings.
34. Tugendhat J considered a submission by counsel for the unsuccessful claimant that if the parties did not reach a pre-action agreement:

"it would not be an abuse of the process of the court for a claimant to decline to settle the dispute in question, notwithstanding that he had been offered all that he was entitled to by way of substantive relief, unless the offer included an acceptable offer in relation to costs. In such a situation, it would be perfectly proper for the claimant to decline the offer, commence proceedings and leave the defendant to decide whether to concede the claim for substantive relief in the context of the litigation. As has frequently been observed judicially, costs are, regrettably but in current conditions inevitably, often the most significant elements of a party's claim." [judgment paragraph 9]

35. The learned judge summarised the law in paragraph 16:

"In summary I take the law to be: (1) if no claim form is issued, then there is no litigation and so there are no costs of litigation, whatever costs may have been incurred in complying with a Pre-Action Protocol; but (2) if a claim form is issued, the costs incurred in complying with a Pre-Action Protocol may be recoverable as costs 'incidental to' any subsequent proceedings."

36. He went on to consider and reject the claimant's submission (judgment paragraphs 20 - 26). In doing so Tugendhat J noted that if it was correct then he could see little advantage in the requirement to engage in pre-action correspondence during a period each side was not incurring a liability to pay the others costs.
37. In my judgment this case does not support Ms Reid's submission to the extent necessary to advance her argument. The case shows that in September 2009, if no claim form had been issued in this case, then Dr Wilkinson could not have recovered the costs she had incurred up to that point. In that sense Dr Wilkinson had no right to costs. But once a claim form was issued then costs incurred pre-action may (or may not) be recovered. If, when Dr Wilkinson issued the claim form, her claim had been struck out as an abuse of process like the one in Citation Plc, then it might very well have been fair to make the same costs order in this case as was made by Tugendhat J, but that is not what happened. Dr Wilkinson's claim was not an abuse of process. She sought and obtained declaratory relief which the defendant resisted to the last. Once the proceedings were in being and were fought to trial, the pre-action costs were costs which may be recovered by either side.
38. I am sure this offer is a matter I should take into account once I have reviewed the without prejudice material as a whole. However, although the offer in September 2009 puts the parties in substance in much the same position as I have found them to be, I cannot ignore the fact that the offer was not an offer to accept that Dr Wilkinson was, and always had been, the owner of the copyright in the Established Works. It is a narrow distinction from the defendant's point of view but it is not a narrow distinction from the claimant's point of view.
39. On 16^th October 2009 the claimant's solicitors replied with a counter offer expressed to be pursuant to CPR Part 36 and made without prejudice save as to costs. The terms offered on the claimant's behalf were absurd. A licence to allow the Connected programme to be used would be granted although there were certain named organisations which were to be exclusive to the claimant. Huge fees were demanded comprising a one off licence fee of £500,000 and a ten year consultancy agreement for an annual sum of £250,000, making a total cost to the defendant of £3 million over ten years. There were absurd termination terms which could have led to the £3 million being due very early. The offer was not accepted. At this stage the parties were clearly very far apart and the defendants were clearly entitled to take the view that any action had to be fought.
40. I gather that there was no substantive contact between the parties from this point in 2009 until the proceedings were issued in 2011. In January 2012 the CMC in the PCC had fixed the trial for later in the year.
41. In April 2012 the defendant's solicitors made a further offer on a without prejudice save as to costs basis. This offer was that the defendant was prepared to acknowledge Dr Wilkinson's ownership of copyright in the Established Works including the elements incorporated in the Connected programme in return for an acknowledgement that the defendant had a royalty free licence. The licence is the same as the one I held existed. The defendant would pay Dr Wilkinson £5,000 to compensate her for any damage, but each party would bear their own costs.
42. In response on 2^nd May 2012 Dr Wilkinson's solicitors made a counter offer expressed to be pursuant to CPR Part 36 and without prejudice save as to costs. This counter offer included the acknowledgement and licence as proposed by the defendant and sought no damages. However it did require the defendant to pay the claimant's costs on the standard basis. The 2^nd May letter reiterated that "the very reason why these proceedings were brought was because [the defendant] asserted and continues to assert that the copyrights in [Dr Wilkinson's] Established Works vest in [the defendant]".
43. I note that the 2^nd May 2012 offer was expressed to be made under CPR Part 36 and thus on one view r 36.14(1)(b) applies (judgment against the defendant is at least as advantageous to the claimant as the proposals contained in a claimant's part 36 offer). Mr Hamer did not submit that the consequences set out in r36.14(3) (indemnity costs etc.) apply here and in my judgment he was right not to do so. It would be unjust (see r36.14(3)) to consider the May offer made under Part 36 without considering the April offer, which necessarily could not be made under Part 36. All the circumstances fall to be considered (r36.14(4)) and r44.3 always requires the court to consider an offer to settle, even if it does not have the costs consequences in Part 36.
44. Apart from the now crucial issue of costs, the claimant has done no better than she would have done had she accepted the defendant's offer on 10^th April 2012. Indeed marginally worse given the lack of £5,000 damages. On the other hand, apart from the crucial issue of costs, the defendant has done no better than it would have done if it had accepted the 2^nd May 2012 offer.
45. One thing is clear. From April/May 2012 both sides had correctly analysed the likely outcome of these proceedings on the merits and had made clear it was an outcome they were prepared to accept. From that point on the continued existence of the dispute was and was only about costs. In my judgment it would be unjust to give any more significance to the claimant's offer as being made in Part 36 form (because it required a payment of costs) than the defendant's offer, which could not be made in Part 36 form because of the costs dispute. I need to consider all the circumstances and look at things overall.
46. If the outcome had been far from the terms of the April/May letters then no problem would arise. If I had found for the claimant on the infringement claim or for the defendant that Dr Wilkinson retained no right to the copyright in the Established Works reproduced in the SHA works, then costs could have followed the event. However, but for the costs issue (and the minor damages point in one letter), the outcome in terms of relief is the same as that proposed by both sides in April/May.
47. I am quite satisfied that the defendant was justified in not accepting the claimant's Part 36 offer. In terms of relief, the defendant had already offered the same thing (indeed with the damages, a little more). It would not have been right for the defendant to pay the whole of the claimant's costs as at May 2012. Acceptance of the terms on offer necessarily involved defeat in the infringement claim for the claimant. Moreover in terms of the costs order I would make but for the without prejudice material, I have not required the defendant to pay all of the claimant's costs or anything like it.
48. Should the claimant have accepted the defendant's April offer? Each side bearing its own costs was a more realistic suggestion than one side paying all the costs. However, as the point made in the defendant's solicitors letter of May 2012 recognises, until that point the defendant had never stated it was prepared to accept that the contract did not capture Dr Wilkinson's copyright. So on that basis the claimant was entitled to recover some costs from the defendant. On the other hand, the terms on offer amounted to a dismissal of the infringement case and the defendant too was entitled to recover some costs of the infringement case. It is tempting to equate a situation in which each side had a right to some costs from the other with "no order" as to costs but that assumes each side's costs are comparable to the other's and, for the reasons I have already given, that is not a safe assumption in this case.

Overall conclusion

49. But for the without prejudice correspondence, I would have made an order that the defendant pays 55% of the claimant's costs and the claimant pays 35% of the defendant's costs. In deciding how to take the without prejudice correspondence into account I have reached the following conclusions:

i) The action was taken all the way to a full trial and is not a case in which a separate order in relation to costs incurred pre-action would be justified.

ii) It would be wrong to adjust the order in a manner more favourable to the claimant as a result of the correspondence. The claimant's offer made in May 2012, which does reflect what she achieved at trial, did not justify a demand for payment of all her costs. The only other offer made by the claimant, in October 2009, was absurd.

iii) It would be wrong to make no adjustment in favour of the defendant as a result of the correspondence. In April 2012 the defendant offered the claimant all she in fact achieved at trial (save for costs). Moreover the terms proposed in the Defence itself and in the defendant's offer in September 2009, have the same practical effect going forward as the outcome achieved at trial albeit not by the same mechanism and not as regards the past. Some adjustment in the defendant's favour should be made.

iv) On the other hand, one of the factors I have taken into account in considering a fair costs order are issues which the defendant fought and lost (particularly issue 2, but also issues 3 and 4). Making a sensible offer to settle does not mean a party to litigation can thereafter litigate unreasonably (e.g. issue 2) and does not automatically absolve a party from the costs consequences of fighting and losing certain issues.

50. I think a fair reflection of the impact of the without prejudice correspondence in this case is to adjust the overall costs order by depriving the claimant of half of her costs but not increasing the sum to be paid to the defendant in relation to its costs. Accordingly the order I will make is that the defendant must pay 27.5% of the claimant's costs of these proceedings and the claimant must pay 35% of the defendant's costs. The costs of the High Court cmc will remain as they are.
51. The next stage will be to summarily assess the costs in the light of these orders. I have heard the party's submissions on the reasonableness (etc.) of the various sums incurred but I have not yet had to consider the impact of the claimant's CFA and ATE insurance. This judgment will be formally handed down on Friday 23^rd November 2012. There will be no need for attendance and it will not be listed for any argument to be heard. The parties should make their further submissions in writing within 14 days and I will decide on the final orders to be made on paper.