Makeality Ltd v City Doggo Ltd & Anor: Allocation to IPEC Small Claims Track and Article 14 Compliance

Introduction

This Court of Appeal decision concerns a trade mark infringement and passing-off dispute between Makeality Ltd (“the Claimant”), proprietor of the United Kingdom trade mark “PIDDLE PATCH”, and City Doggo Ltd & Anor (“the Defendants”), who market a similar product under “Oui Oui Patch” and other Piddle-style signs. The central procedural issue is whether the claim belongs on the multi-track or in the IPEC small claims track. HHJ Hacon transferred it to the small claims track, and the Claimant appealed on the grounds that (1) the case merited the multi-track and (2) the IPEC small claims cost regime breaches Article 14 of the EU Enforcement Directive by preventing recovery of a significant part of legal costs. The Court of Appeal dismissed both grounds.

Summary of the Judgment

The Court of Appeal upheld HHJ Hacon’s case management decision to allocate the dispute to the IPEC small claims track. It found that:

The likely recoverable quantum and profits for both parties were below £10,000.
The case could be heard in one day, even with video-link evidence.
Legal representation does not bar small-claims allocation.
The small claims track’s cost rules do not breach Article 14 of the Enforcement Directive post-Brexit, and Article 14 cannot be invoked against private parties under retained domestic law.

The appeal was therefore dismissed.

Analysis

Precedents Cited

Jalla v Shell International Trading [2021] EWCA Civ 1559 – affirms the limited scope for overturning robust case management decisions.
United Video Properties Inc v Telenet NV (C-57/15, EU:C:2016:611) – CJEU ruling on Article 14 Enforcement Directive: “significant and appropriate part” of reasonable costs must be recoverable.
Tumber v Independent Television News Ltd [2017] EWHC 3093 (IPEC) – HHJ Hacon’s first view that IPEC small claims complies with Article 14 by permitting limited cost awards.
Marleasing SA v La Comercial Internacional de Alimentación SA (C-106/89, ECR I-4135) – principle of interpreting domestic law in conformity with EU directives.
Jackson Review of Civil Litigation Costs – historical background to the creation of IPEC and its procedural tracks.

Legal Reasoning

The Court of Appeal’s reasoning can be divided into two streams:

Track Allocation under CPR rules:
- CPR 63.27(1)–(3) and Part 26 – a claim under £10,000 and of limited complexity is prima facie for the small claims track unless parties agree otherwise.
- Rule 26.13(1) factors (value, complexity, number of parties, legal representation, etc.) supported small-claims allocation on the evidence—or lack of evidence—of quantum and complexity.
Article 14 Enforcement Directive challenge:
- The IPEC small claims cost regime caps recoverable legal fees (e.g. £260 for injunction work) and generally precludes cost-shifting.
- CJEU in United Video allows flat-rates only if they guarantee a “significant and appropriate” part of reasonable costs.
- Post-Brexit retained EU law has been curtailed by the Retained EU Law (Revocation and Reform) Act 2023; Article 14 no longer has horizontal effect or supremacy in domestic law.
- Marleasing cannot override clear domestic CPR provisions disallowing broader cost recovery in small-claims proceedings.

Impact

This decision clarifies that:

IPEC small claims track is available to IP litigants even if they are represented by lawyers.
Absence of direct and horizontal effect of EU directives post-REULA precludes challenges to domestic cost regimes in private IP disputes on Article 14 grounds.
Courts retain broad discretion under CPR Part 26 to allocate IP cases to the track best suited to proportionality and access to justice.
Future appellants cannot rely on pre-2024 EU case law to unsettle domestic cost-shifting rules introduced after Brexit.

Complex Concepts Simplified

IPEC Small Claims Track: A sub-regime within the Intellectual Property Enterprise Court for low-value (≤£10,000) and straightforward disputes, with simplified procedures and minimal cost-shifting.
Multi-Track vs Small Claims Track: Multi-track cases are larger or more complex and attract fuller discovery, longer hearings, and potential for full costs orders. Small claims track is faster, cheaper, and generally prohibits adverse cost awards.
Article 14 Enforcement Directive: An EU law provision obliging Member States to ensure that the losing party pays a reasonable share of the winner’s legal costs, subject to “equity”.
Direct Effect: The principle that EU law can be enforced in domestic courts. Horizontal direct effect means a directive can be enforced between private parties—absent here post-Brexit.
REULA (2023): UK Act revoking EU supremacy and general principles of EU law in domestic law after 31 December 2023.

Conclusion

Makeality Ltd v City Doggo Ltd & Anor establishes that IPEC’s small claims track remains an appropriate and proportionate forum for low-value IP disputes, even when parties are legally represented. The Court of Appeal reaffirmed the wide case management discretion of first-instance judges under the CPR allocation rules and confirmed post-Brexit that challenges premised on Article 14 of the Enforcement Directive cannot unsettle domestic cost regimes in private IP litigation. This decision will guide practitioners on track allocation strategies and reinforce the finality of IP small claims procedures.