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The Intellectual Property (Unjustified Threats) Bill is set to change the somewhat unique situation whereby a professional adviser can be personally sued for sending threats of intellectual property (IP) litigation to perceived infringers on behalf of their clients.

Under the current law for what are termed ‘unjustified threats’, if someone threatens to sue for IP infringement where there has not been any infringement or where the threatening party does not have the necessary IP rights to bring proceedings, the threat can be declared groundless by the court. The threatened party can apply for damages and/or injunctive relief on the basis that frivolous or unfounded threats of litigation can have severe financial and reputational implications for the wrongly accused. The twist, however, is that the lawyer who sent out the unjustified threat can also be sued by the threatened party. It is irrelevant that the lawyer acted in their professional capacity and on their client’s instruction.

The Intellectual Property (Unjustified Threats) Bill, which also aims to harmonise the unjustified threat regime across all types of IP, is set to repeal this quirk. Professional advisors acting in their professional capacity and on their client’s instructions will no longer be personally liable under the groundless threat provisions.

The change is seen as a boost to IP owners who under the current regime may find it difficult to convince a lawyer to threaten litigation in marginal or evidence-sparse instances of infringement. Given that the litigation-threatening client will still be liable for groundless threats, however, there is unlikely to be a sharp increase in unwarranted threats of litigation once the new law comes into effect.