The UK government has outlined measures to reform the groundless threats regime, responding to proposals published by the Law Commission last year.
While the intention behind the groundless threats provisions was to prevent commercial damage resulting from threats to a competitor’s customers, it has long been felt that the provisions have become unwieldy, too broad in scope and obstruct pre-litigation attempts to settle disputes.
Responding to these concerns, the UK government approved the changes which will significantly reduce the scope of the groundless threats provisions:
- Threats actions may no longer be brought for threats made to a “primary” actor (those who carry out or intend to carry out primary acts, such as manufacture or importing). This distinction appeared in the Patents Act 1977, but not in other IP statutes.
- Communications with infringers will be excluded from the groundless threats provisions if they are made a “legitimate commercial purpose”, and where the information is necessary for that purpose. Examples of legitimate commercial purposes will be provided in the statute.
- It will be a defence to threaten a “secondary” infringer (i.e customers, retailers etc) where reasonable endeavours have been made, without success, to locate the primary infringer.
In Australia, reform of the law on threats is long overdue. The Australian provisions, unlike the UK provisions, do not distinguish primary and secondary infringers. They sit uncomfortably with requirements that potential litigants take “genuine steps” to resolve disputes before commencing legal proceedings. Faced with the prospect that seemingly innocuous statements will amount to a threat potentially sounding in damages, Australian rights holders are better advised to sue first and threaten later.