Ticketogo is a patent licensing company and the proprietor of a UK patent disclosing a method of issuing a ticket, containing a barcode in an image file format, over the Internet. Ticketogo provides licences under this patent to a number of other companies. The Big Bus Company is an operator of open-top buses and provides sightseeing tours.
In late 2012, Ticketogo alerted Big Bus to the existence of its patent, alleged that Big Bus was infringing it, and offered to provide a licence to operate under it. Big Bus’ response was that it did not require such a licence, as its system did not fall within the scope of Ticketogo’s patent.
During the back-and-forth correspondence, Ticketogo referred to numerous licences it had negotiated with similar companies, including National Express and a “major coach travel operator”, but refused to offer copies of these licences to Big Bus’ representatives. Consequently, being aware of the possibility of considerable and irrecoverable costs, Big Bus applied to the Court for pre-action disclosure of the licences to determine the value of Ticketogo’s claims and help decide its next move.
Infringement cases are normally split into two trials, the first determining liability and the second damages. In both principle and practice, this makes a lot of sense: a crude comparison with criminal cases would be to point out that guilt is determined before punishment. However, in the case of pre-action disclosure, an account of damages is sought first, seeing as damages might well turn out to be less than the cost of litigation — particularly if there is a large question mark hanging over the original claims.
Ticketogo argued that, since Big Bus had not admitted liability, a pre-action disclosure would not ensure a settlement. Mr Judge Arnold asserted that litigation costs were often disproportionate to the damages recovered. Therefore, it followed that where key information concerning the value of the claim was held by one party, that party should disclose that information to allow a realistic assessment of that value to be made.
Ticketogo’s confidentiality concerns were addressed with the formation of a ‘confidentiality club’ of legal representatives and Mr Judge Arnold, stating: “Why should Big Bus have to fight and lose on infringement and validity in order to find out what it would have to pay by way of damages?” It was concluded that Ticketogo’s licences be disclosed, along with an account of Big Bus’ online ticket sales and profits.
In the interests of improving transparency in the market and avoiding the costs of litigation, this decision should be broadly welcomed.