Proposed reforms to the UK legislation relating to Unjustified Threats actions

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The Intellectual Property (Unjustified Threats) Bill published on 19 May 2016 seeks to reform the current UK law to:

• bring about consistency and harmonise the laws relating to actions against unjustified threats of infringement proceedings across patents, trade marks and designs;
• bring about clarity as to the kind of threats that may be made legitimately;
• generally provide an environment which would encourage parties to enter into a dialogue to resolve their disputes and arrive at a negotiated settlement while avoiding litigation and its attendant costs;
• comply with the requirements of the Civil Procedure Rules.

The law provides a remedy in cases where the threat of infringement proceedings is deemed to be unjustified because there is no infringement or the rights being relied on are invalid. However the threat of proceedings for unjustified threats can deter communication between parties for fear of incurring actions against threats, costs in taking advice related to avoiding threats actions, increased litigation and costs in relation to infringement and threats actions and the attendant disruption in commercial activity.

The Bill seeks to modify the relevant clauses under each of the patents, trade marks and designs laws applicable to the UK to address the problems experienced by clients and professional advisors under the existing laws.

Some of the main features of the Bill are:

1. A communication contains a threat of infringement proceedings if a reasonable person in the position of a recipient would understand from the communication that:

• A patent, registered trade mark, registered or unregistered design exists (in relation to the UK); and
• that the person who has sent the communication intend to bring proceedings in a UK court or any other court against another person for infringement of one or more of those rights by an act done or intended to be done in the UK.

2. Threats could relate to the above rights where the registration is pending, and would be taken to be threats to sue for infringement once the rights are registered.
3. Make it easier to communicate with secondary infringers in certain circumstances without liability to a threats action

Under the Bill, the following threats would not be actionable:

• Threats made to a person in relation to the acts set out below:

For patents: The making or importing of a product for disposal, the use of a process, even where the threat refers to any other act in relation to that product or process.

For registered designs and unregistered design rights: The making or importing of an article or product for disposal, even where the threat refers to any other act in relation to that article or product.

For trade marks: The applying of a mark, or causing/commissioning a mark to be applied, to goods or their packaging; the importing for disposal of goods to which, or to the packaging of which, the mark has been applied, even where the threat refers to any other act in relation to those goods; the supply of services under the mark, even where the threat refers to any other act in relation to the supply of those services.

• Implied threats

A threat of infringement proceedings which is not an express threat is not actionable if it is contained in a permitted communication. For example, where no primary actor has been found despite the party making the threat having taken all reasonable steps to locate a primary actor, and where the party making the threat notifies the person of those steps; and the steps include the use of permitted communication.

• Threats for a permitted purpose

There are certain types of communication which are permitted even though they contain a threat of infringement proceedings. They include:

1. Giving notice that a right exists;
2. For discovery purposes, discovering whether, or by whom, a right has been infringed
3. To give 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.

The reforms set out what does not come under permitted purposes, for example a  permitted purpose would not include a request to  cease doing anything, deliver up or destroy goods, or provide an undertaking in relation to the goods/product or services or process.

• Threats made by professional advisors when acting under instructions from their client provided the communication clearly identifies the client on whose behalf the communication has been issued. The liability of the client, if any, remains unaffected.

The full text of the Bill can be found here.

Comments

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The law in this area was inconsistent and in need of reform, so these are welcome changes.  The Bill still leaves some scope for uncertainty in its current form as to the extent of rights and location of threats, and the extent to which these issues are addressed in the legislation will be seen once the Bill is enacted. The draft Bill is likely to be enacted this year. The Bill does not extend to copyright or trade secrets, so does not go as far as it could have gone. There has been talk of a more radical approach with the introduction of a tort of making false allegations and this has not been ruled out for the future.

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Category: Latest Insights | Published: June 2016 | Read more