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19th February 2016

New Intellectual Property (Unjustified Threats) Bill


19th February 2016

New Intellectual Property (Unjustified Threats) Bill

Whenever we act for a client who wishes to assert their intellectual property rights against an alleged infringer, we must be very wary of the unjustified threats provisions contained within the Copyright Designs and Patents Act 1988, the Patents Act 1977 and the Trade Marks Act 1994. Clients are always surprised that we can’t simply write a ‘threatening letter’.

In the UK, if someone threatens to sue you for infringing their registered patent, trade mark or design right ‘without cause’, there is a statutory right of redress against the person making the threat or indeed the professional advisor who sent the threatening letter. This could be in the form of seeking a declaration from the court that the threat lacked justification, a claim for damages or an injunction preventing future threats.

So what exactly is an unjustified threat? The Law Commission uses the following example:

  •  A, through its solicitor, sends a letter to a retailer, B, alleging that B is infringing its patent by retailing an automatic can opener that uses a process protected by the patent.
  • The letter threatens infringement proceedings, but A knows the patent is probably invalid and would never risk exposing this by bringing infringement proceedings.
  • Despite being a best seller, B stops stocking the can opener and returns all unsold can openers to its supplier.

The law on unjustified threats stems from the late 1800’s when a steam engine manufacturer “threatened” to sue the customers of his main competitor for patent infringement. The threats were enough to prevent these customers from buying the competitors product and so the competitor lost custom and sales. However, the law at the time was such that the competitor had no recourse against the threats made to his customers and so a change in the law was needed in order to prevent this anti-competitive behaviour.

Despite the good intentions behind the “unjustified threats” provisions, it remains a tricky and complicated area of law. Moreover, it has been criticised for being inconsistent and for failing to strike the correct balance between protecting IPR rights and threats which affect healthy competition, as the threats provisions differ from one set of intellectual property right (IPR) to the next.

Thank goodness for the Intellectual Property (Unjustified Threats) Bill published recently by the Law Commission. The Bill aims to clarify the law, in turn preventing the misuse of threats to intimidate or gain unfair advantage where there has been no infringement.

The Commission proposes:

  • to uniform the law on unjustified threats so that the provisions which currently apply to patents, will also apply to trade marks and design rights;
  • to facilitate communication between the parties so that they can more easily comply with their obligations under the Civil Procedure Rules which govern the litigation process;
  • to introduce the so-called safe harbour of “permitted communications” so that where certain conditions are met, communicating with someone committing certain acts is permissible;
  • to exclude professional advisors such as solicitors, trade mark and patent attorneys from liability.

Whilst the proposed reforms are welcome to redress the complexity of the current threats provisions, it still remains unclear whether the proposals will apply to other forms of IPR such as copyright, trade secrets and passing off which were not detailed in the Bill and which do not currently fall within the ambit of the legislation cited above.

For more information please contact me.

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