In the UK, a person threatened by proceedings relating to infringement of patent, trade mark or design rights can sue the person making the threats in certain circumstances if the threats are unjustified, i.e. where they have been made in respect of an invalid right or where there has been no infringement. However, the substantive law and practice relating to unjustified threats differs considerably depending on which right (patent, trade mark or design right) is alleged to be infringed. The Intellectual Property (Unjustified Threats) Bill is aimed at reforming this area of law by providing a clearer, uniform regime. The Bill cleared its final stage in the House of Commons recently without any amendments and is now awaiting royal assent before becoming law.
The general approach on unjustified threats as set out in the Bill and applicable across all of the above rights is as follows:
- The Bill provides a new test to determine whether a communication constitutes a threat of infringement proceedings. The test requires that the communication be assessed through the eyes of a reasonable person in the position of a recipient. If that notional reasonable recipient would understand from the communication that the right exists and that the person notifying the existence of the right intends to commence infringement proceedings against him or any other person in respect of an act done or to be done in the United Kingdom, then, a threat has been made. If that threat is unjustified, subject to the provisions discussed below, an action may lie against the person making the threat.
- An action based on unjustified threats cannot be brought if the threat relates to certain acts known as acts of "primary infringement". In patent cases, acts of making or importing a product for disposal, or using a process constitute acts of primary infringement. For the purposes of registered and unregistered design rights, the relevant acts are making or importing a product for disposal For trade marks, the acts are supplying services under a sign; applying, or causing another person to apply, a sign to goods or their packaging and importing goods to which, or the packaging of which, a sign has been applied to.
- If a threat of infringement proceedings is made to someone who is a primary infringer (i.e. someone who has done or intends to do any of the acts of primary infringement as set out above) then no action for unjustified threats can be brought against the person making the threats. Where an act of primary infringement has occurred, it is permissible to threaten proceedings in respect of related (secondary) infringing acts relating to the product, process or services, such as selling or offering for sale..
- The Bill includes a "safe harbour" provision that is aimed at providing a framework to right holders to make genuine enquiries of third parties without fear of being sued. The Bill provides that implied threats of infringement proceedings made to third parties are not actionable if they are contained in a "permitted communication". A "permitted communication" is one made for "permitted purposes" such as for the purposes of providing notice of existence of a right or to ascertain the identity of a primary infringer. The "permitted purposes" set out in the Bill are not exhaustive, and the courts can consider any other purpose to be a "permitted purpose".
- Any person aggrieved by unjustified threats can obtain a declaration, damages and/or an injunction against the person making the threats. It need not necessarily be the recipient of the threat.
- A person who made the threat can rely on two statutory defences when faced with an unjustified threats action. First, they can show that the threat is justified, i.e. that the acts in respect of which a threat was made were, or would be, infringing. This is called the "justification defence". Secondly, they can show that they had taken "reasonable steps" to identify a primary infringer prior to making the threats and had notified the person aggrieved by the threats of those steps. The Bill does not specify what constitutes "reasonable steps": this will depend upon the particular circumstances of each case.
- Unlike in certain circumstances under the pre-existing law, professional advisers are now protected from an unjustified threats action provided they fulfil certain conditions. The adviser must be acting on the instructions of another person and must have identified that person in the communication. This protection was added so as to curb the practice of using threats actions to disrupt the relationship between professional advisers and their clients. Although not expressly stated in the Bill, it would appear that in-house advisers can benefit from the protection provided they fulfil the conditions set out.
The Bill is a positive step in providing greater clarity and certainty in the complex area of unjustified threats for patent, trade mark and registered and unregistered design rights infringement. Nevertheless, pitfalls still remain and IP right holders must exercise caution in threatening infringement proceedings. Where possible, professional advice should always be sought prior to communicating with alleged infringers, whether orally or in writing.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.