December 9, 2015

A Blog – “You Threatening Me?”

The Current Law

The provisions are complex. They set out a number of activities that do not constitute an actionable threat, such as making or importing infringing goods but, in practice, these are narrowly construed and the excluded activities vary between the Intellectual Property Rights. There are no threat provisions for copyright for example.

Given the difficulties in judging what can and cannot be said in pre-action correspondence, the current provisions discourage parties from setting out allegations in detail, particularly in relation to patents. This sits uncomfortably with the Civil Procedure Rules which encourage parties to set out their case at an early stage with the aim of avoiding litigation. These difficulties lead to uncertainty, added expense and risk for businesses.

Proposed Changes

The Bill is intended to make the law clear. Currently, a threats action cannot be brought in respect of a patent where the threat was made to a person that carried out a primary act, such as making or importing, even if the threat also refers to other secondary acts, such as selling or supplying. So a patent owner can assert its right against those committing the most commercially damaging acts without incurring the risk of liability for making an actionable threat. The Bill proposes that the law on threats for Registered Trade Marks and Designs is brought into line with patents. In addition, in respect of all rights, a threat will not be actionable if it is made to a person that intends to carry out a primary act. The Bill aims to make it easier for parties to comply with their obligations under the Civil Procedure Rules. Currently communicating with secondary infringers, such as customers or retailers, has been fraught with difficulty, as they were particularly protected from threats on the basis that they were less likely to have been involved in the creation of the infringing product.

The Bill introduces “permitted communications” so that where certain conditions are met, communicating with someone committing a secondary act will not be actionable. This does not apply to express threats to sue for infringement, but allows communications for permitted purposes. For example, it is possible to provide factual evidence about a patent or seek information to identify an infringer, but it is expressly not permitted to ask someone to cease doing an act.

The other principle reforms are: the removal of the liability that professional advisers, such as lawyers, currently face for making threats; and changes to the law so that the threats provisions can apply to the unitary patent, which is expected to be introduced in 2017.

Next Steps

While the Bill provides greater certainty for those seeking to enforce their rights, there remain areas of ambiguity and IPR owners will need to exercise care when applying the new provisions, including the proposed permitted communications. Before issuing any threats, or making demands to cease and desist, it would be wise to seek expert advice even after the Bill becomes law.

Stephen Welfare is an expert in Intellectual Property Rights Disputes and for more information about the Intellectual Property (Unjustified) Threats Bill and Intellectual Property Rights generally, please contact Stephen Welfare

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