On 19 May 2016, the Intellectual Property (Unjustified Threats) Bill was introduced in the House of Lords and will follow the special procedure for Law Commission bills. This marks the end stages of a project that began in 2012 when the Department for Business, Innovation and Skills and the Intellectual Property Office asked the Law Commission to review the current threats provisions. The Bill is the result of consultation and discussion with stakeholders, and we would like to thank all who have engaged with us throughout the ups and downs of the project. We have also worked closely with our colleagues at the Scottish Law Commission and the Intellectual Property Office and thank them for their unstinting support and assistance.
Early on in the project, it became clear that there was overwhelming support for retaining the protection against unjustified threats. However, this came with the caveat that it would need reform. We consulted on two models for reform. The first would build on the current law in particular the reforms made for patents in 2004. The second was more ambitious; we suggested that the current law should be replaced with a new tort based on unfair competition. Although there was some support for the new tort, the first model was preferred by consultees as it would retain many familiar features. It was also felt that a new tort would be too big and disruptive a change for now, however it should not be ruled out for the future. The tort could, for example, cover other IP rights such as copyright and it would offer protection against a wider range of commercially damaging acts. The Government, when accepting our recommendations for reform last year, noted that a new tort deserves more consideration in the longer term.
The Bill will change threats law for patents, trade marks, European Union trade marks, registered designs, design right and Community designs by substituting new sections for old within the current main Acts for those rights. The new provisions for each right follow the same structure and are identical in almost all material respects. Therefore, we only describe here those for patents; note, however, there are some tweaks made for trade marks and design right not discussed.
The first section is the gateway into the provisions and sets out the test for whether a communication contains a threat to sue for infringement. The test is mainly based on current case law. A communication contains a threat if a reasonable person in the position of a recipient would understand from it that a patent exists and that a person intends to bring infringement proceedings for an act done in the UK or, an act which if done, would be done in the UK. The reference to an act in the UK is new and is necessary in order that the provisions can extend to European patents that come within the jurisdiction of the Unified Patent Court (once the court is established).
The second section comes into play if the test is satisfied and determines whether a person aggrieved by the threat can bring a threats action. As is currently the case some threats are excluded. A threats action cannot be brought for threats that only refer to specified acts (manufacture, importation or use of a process). This has been extended to threats for intended acts. Threats made to those who have done, or intend to do, the specified acts are excluded no matter what else is referred to. Finally, threats that fall within the category of permitted communication are excluded, which leads us neatly to the next section.
The third section introduces the concept of a permitted communication which is made for a specified purpose where one of the parties involved would ordinarily be entitled to bring a threats action. This allows the parties to exchange information in order to settle any dispute without litigation. It also addresses the uneasy relationship between the obligations put on parties by the Civil Procedure Rules and the risk of being sued for making threats. The provisions provide guidance on what purposes are permitted and examples of the types of information that might be necessary for that purpose. Some things are excluded such as express threats or requests for delivery up for example. The requirements that must be satisfied before the permitted communication exception applies are directed only to that part of the communication which might amount to an implied threat. It is only where any extra information not given for a permitted purpose satisfies the test for a threat that the exception falls away.
The fourth section deals with remedies, which remain the same: declarations, damages and injunctions. It also deals with defences. The justification defence, that the acts referred to are or would be infringing, is retained. The defence is available where the trade source of the infringement cannot be found so someone further along the supply chain is threatened instead. The defence is extended, with tweaks, to the other rights. There is one change; use of “best endeavours” to find the trade source is changed to taking “all reasonable steps”.
The fifth section is probably of greatest interest to readers. This provides that a threats action cannot be brought against a professional adviser, who acts for a client in a professional capacity, providing legal or attorney services and who is regulated in doing so by a professional body. The adviser has to identify the client to whoever is being communicated with. This does not create a new loophole; the fact that the adviser is shielded from liability does not affect any underlying liability of the client they represent.