08 May 2017

The Intellectual Property (Unjustified Threats) Bill

The Intellectual Property (Unjustified Threats) Bill has just received royal assent and is expected to commence in October 2017.

UK law currently provides a statutory right of redress against unjustified (or groundless) threats to sue for infringement of a patent, trade mark or design right.

The existing law needs reform because different rules relate to different IP rights and so are confusing for those wishing to assert their rights; it is too easy to fall within the groundless threats provisions with the result that small businesses often feel disinclined to assert their IP rights, and parties are less inclined to try and settle disputes at the outset for fear of leaving themselves open to a threats action.

The Threats Bill will enact the recommendations the Law Commission made in its 2014 and 2015 reports and will replace the existing provisions which apply to patents, European patents, trade marks, EU trade marks, registered designs, design rights and Community designs.

Essentially, the protection against groundless threats of infringement proceedings is being retained but reformed as follows:

o A threats action may not be brought for threats made to a primary actor, that is, someone who is usually the source of the infringement and is responsible for carrying out one or more of the most commercially damaging acts such as importation or manufacture.

o Implied threats made to a secondary actor will not give rise to a claim for unjustified threats if they are contained in a “permitted communication”. These permitted communications provide the framework for a safe harbour to allow a rights holder to communicate with someone who might otherwise be entitled to sue for threats, by providing a means of exchanging information in order to resolve disputes. The communication must be made solely for a “permitted purpose”, all of the information that relates to the threat must be necessary for that purpose, and the person making the communication must reasonably believe that the information is true.

o A permitted purpose includes: giving notice that the rights exists; discovering if the right is being infringed and by whom; and giving notice that a person has an interest in the right in circumstances where some other cause of action is dependent on another person's awareness of that fact. There is also guidance on what is not a permitted purpose, for example, requesting an undertaking relating to a product or process.

o The justification defence remains (that is that if an infringement action succeeds it is a defence to a groundless threats action because the threat would not be groundless) but without the reference to the defence not being available where the right is shown to be invalid in a relevant respect.

o A defence currently only available to patents is extended to all the IP rights - it is a defence to show that all reasonable steps have been taken to find someone who has carried out, or intends to carry out, a primary act, for example the manufacturer that is the source of the infringement. If there are several possible lines of enquiry, all must be pursued.

o A professional adviser acting in their professional capacity and on instructions from their client will not face personal liability for making threats.

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