Provisions exist in the United Kingdom to prevent unjustified threats of legal action relating to infringement of patents, designs and trademarks. The provisions were originally conceived with the intention of stopping the holder of an IP right from damaging a person’s business by threatening their customers or distributors with an infringement action of the IP right. The current provisions, however, are inconsistent across different forms of intellectual property and are worded such that an innocuous communication from an IP rights holder may be interpreted as an actionable threat. This results in an increased risk of litigation proceedings between the parties. This is contrary to the overriding principle enshrined in the UK’s Civil Procedure Rules, which encourage pre-action correspondence and negotiation in order to ensure that disputes are dealt with at proportionate cost.
The UK’s government issued a draft Bill setting out proposals to address some of these issues. The Intellectual Property (Unjustified Threats) Bill 2016 would update legislation relating to unjustified threats to provide greater consistency and clarity.
For example, the Bill proposes positive definitions for “permitted communications” to provide a safe harbor to allow rights holders to communicate with potential infringers, without running the risk of a threats action. In this way, parties should find it easier to comply with the Civil Procedure Rules by exchanging information prior to the start of any litigation.
The Bill also aims to homogenize the threats provisions for patents, designs and trademarks, which have evolved differently over time. For all rights, the unjustified threats provisions do not apply to threats made in view of primary acts of infringement (e.g., manufacture of a patented product). For threats relating to patent infringement, the current law extends this exclusion to cover further secondary acts performed by those primary infringers. This stems from Cavity Trays Ltd v RMC Panel Products Ltd [1996] RPC 361, where it was considered that, in practice; a primary infringer would often pass a product down the supply chain and so perform further acts other than merely making or importing the product. The new Bill applies the same approach to the UK designs and trademarks provisions. The focus shifts from an analysis of individual acts of infringement to a consideration of the overall position of the party against whom the threat is made. A primary infringer will have no defense of unjustified threats relating to any acts that it performs.
Several other changes are intended to be brought into effect by the Bill, for instance, extending protection to professional advisers when issuing threats on instruction from a client. The report by the Law Commission is available for further detail and insightful commentary on this subject.
The Bill is now considered by the UK House of Lords as it passes through the legislative process.
