The Intellectual Property (Unjustified Threats) Bill receives Royal Assent

This blog post has originally appeared on The IPKat blog and is used here with their kind permission.

At present, the law provides that where a person threatens another with legal action for alleged intellectual property infringement but the threats are groundless, an aggrieved person (usually, but not limited to, the person who received the threat) can apply to the court for relief, including an injunction and damages and costs. The law varies slightly between the different intellectual property rights, and has long been considered unsatisfactory.

According to the House of Commons, the aims of the Intellectual Property (Unjustified Threats) Bill are:

• to distinguish clearly between threats made legitimately and threats used to damage a commercial rival
• to support disputing parties in reaching a negotiated settlement, thereby avoiding litigation
• introduce consistency between the threats provisions for patents, trade marks and designs.

What will change?

In summary:

The test for whether a communication contains a threat will effectively become as follows: would a reasonable person, in the position of a recipient of the communication understand it to mean that:

• a right exists (no change)
• someone intends to bring infringement proceedings against someone else (no change)
• for an act done in the UK, or if done, would be done in the UK (new requirement,  added to ensure that the provisions can apply to European patents that come within the jurisdiction of the Unified Patent Court.)

The circumstances in which someone (i.e. the person aggrieved) can bring a threats action have been updated to exclude:

• threats that refer only to specified acts, such as manufacture or importation that have been done (no change) or if done, would be one of these acts (new)
• any threats made to those who have done one of those acts (no change for patents, but new for the other rights), or who intend to (new)
• implied threats contained in a permitted communication (new).

The concept of a "permitted communication" between parties is introduced. This covers a situation where information in a communication amounts to an implied threat, a threats action cannot be brought where the information was given for a "permitted purpose", was necessary for that purpose, and the person making the communication reasonably believed what is said is true. There is guidance on what is, or is not, a permitted purpose and on what types of information might be necessary. By way of example, for trade marks each of the following is a "permitted purpose":

1. giving notice that a registered trade mark exists
2. discovering whether, or by whom, a registered trade mark has been infringed by an act mentioned in section 21A(2)(a), (b) or (c)
3. giving notice that a person has a right in or under a registered trade mark, where another person’s awareness of the right is relevant to any proceedings that may be brought in respect of the registered trade mark.

Note at the court may, having regard to the nature of the purposes listed in point  1-3 above, treat any other purpose as a “permitted purpose” if it considers that it is in the interests of justice to do so.

The following, however, may not be treated as a "permitted purpose":

1. requesting a person to cease using, in the course of trade, a sign in relation to goods or services
2. requesting a person to deliver up or destroy goods, or
3. requesting a person to give an undertaking relating to the use of a sign in relation to goods or services.

The available remedies are unchanged. The available defences are updated to:

• allow the justification defence (i.e. the defence that the threat was justified) to be available where the right is shown to be invalid.
• It is a defence to show that the threat was only made after having taken “reasonable steps” to identify the source of the infringement (e.g. manufacturer) without success (currently only available for patents). The recipient of the threat must be told what those steps were before or at the time the threat is made.

Professional advisers can no longer be sued for unjustified threats. In other words, no threats action can be brought against a professional adviser acting for a client in a professional capacity providing legal or attorney services for which they are regulated. In order to qualify for this defence, the communication containing the threat must make clear that the professional adviser is acting on the instructions of another person and identify that person. If the rights holder remains anonymous the professional adviser will be liable for any groundless threat, under the usual principles of undisclosed agency.