A person who makes a groundless threat to bring patent infringement proceedings in respect of certain acts may be sued in the UK by any person "aggrieved" by the threat. A threat will be considered to be groundless if it is shown that there is in fact no infringement or the patent is invalid. In such cases the court may grant an injunction to prevent the person from making further threats, a declaration that the threats are unjustified, or damages to compensate the aggrieved person for any losses he has suffered as a result of the threats. This rule is intended to prevent aggressive patent holders from making unjustified threats to retailers and purchasers.
What is a "threat" in this context?
In determining whether a communication amounts to a threat of patent infringement proceedings, the court will consider how the communication would be understood by an ordinary recipient. For this reason a threat to bring proceedings does not need to be explicit and may be implied. For example, a series of letters might amount to a threat when read together even if each individual communication was not on its own a threat.
A company may be liable for threats made by its employees and external advisors so it is important that your staff are aware of the consequences of making threats. Solicitors and patent attorneys can also be themselves held liable for threats made on behalf of their clients.
Who can bring an action for groundless threats?
Any person aggrieved by a groundless threat may take action against the person who made the threat. This could be the person who was threatened or a third party who was affected by the threat. For example, if a patent holder threatens infringement proceedings against pharmacists for selling a drug, the manufacturer of that drug could bring an action against the patent holder even though the manufacturer was not threatened itself.
What can I say if I think somebody is infringing my patent?
This depends on what infringing acts the person is doing.
Threats of infringement proceedings against a person for the acts of making or importing a patented product for disposal orusing a patented process will not give rise to an action for groundless threats. In addition, if a person has made or imported a product for disposal or used a process, you may threaten them with proceedings for the other statutory infringing acts (e.g. selling, offering for sale and using a product) without incurring liability for an action for groundless threats. The reasoning behind this exclusion is that a patent holder should be free to put possible "primary" infringers on notice of proceedings but those further down the supply chain should be protected from groundless threats.
If you suspect a person is carrying out one of the other acts of infringement alone, without making or importing for disposal, or using a patented process (e.g. a retailer selling a product), you may still only provide them with factual information about the patent and make enquiries about who made or imported the product in question.
Are there any defences for a patent holder?
If a patent is found to be invalid, a patent holder's threat to bring infringement proceedings could be held to be unjustified. However, a patent holder will not be liable if he can show that his patent was infringed and, at the time he made his threat, he had no reason to suspect that his patent was invalid. It is also a defence if the patent holder can demonstrate that he used his best endeavours to identify the maker or importer of a product or user of process before he made his threats.
Review of the IP threats provisions
The Law Commission in the UK has reviewed the IP threats provisions and in April 2014 published a report recommending amendments to the law. As regards patent matters, the Government accepts the following recommendations of the Law Commission:
- groundless threats actions should not be brought for threats to bring proceedings for infringement made to a "primary actor", that is a person who has carried out, or intends to carry out the following:
- the making or importing of a product for disposal, even where the threat refers to any other act in relation to that product; or
- the use of a process, even where the threat refers to any other act in relation to that process;
- communications should be excluded from the groundless threats provisions if they are made for a legitimate commercial purpose, and if the information given is necessary for that purpose. However, the government wants to reflect further on the meaning of "legitimate commercial purpose" so that these cannot be interpreted too widely. However, it does consider that these should include enquiries for the sole purpose of discovering whether, and by whom, a patent has been infringed; and, where a rights holder has a remedy which depends on the infringer being aware of the right, the rights holder may alert a potential infringer of the right;
- information which it should be permissible to communicate includes: that the right exists; that the right is in force; details of the right including, where appropriate, copies of any registration, specifications or drawings; where details are given, they must include any limitations or other restrictions on the right; and, information to identify the goods and to make appropriate enquiries;
- the exclusion should apply only where the person seeking to rely on it has reasonable grounds for believing that the information communicated is true. The burden of showing there are reasonable grounds is on the person seeking to rely on the exclusion;
- the current defence for making threats to secondary actors should be retained but reformed to the extent that the threatener must use reasonable endeavours to discover the primary actor and the person making the threat shall inform the person threatened either before or at the time of making the threat of the reasonable endeavours used;
- lawyers and registered patent attorneys should not be liable for making threats where they have acted in their professional capacity and on instructions from their client;
- the defence that at the time of making the threats the person making the threat did not know, and had no reason to suspect, that the patent was invalid in respect of the matter threatened, should be revoked.
Other amendments will be made in respect of trade marks and designs in order to bring these into greater harmony with patent law. The timetable for enacting the amendments in the Patents Act 1977 is currently unknown.
Take away points
- Take care when approaching other parties about the infringement of your patents
- Do your research before accusing a person of infringement
- Make sure your employees are aware of the risks associated with making unjustified threats
- If in doubt, seek professional advice before making the communication