The UK has “groundless threats” legislation in place which aims to prevent misuse of threats to sue for infringement of IP rights. However, the current law is a potential minefield for IP rights holders. For example, threats to bring infringement proceedings for registered design infringement can be made against a “primary infringer” (a manufacturer or importer), even if the allegation turns out to be unjustified, if the act complained of is the manufacture or importation of an article, but not if the infringement allegation concerns the subsequent sale of the same article by the same person.
The Law Commission has issued a report in which it recommends reform of the law. The Law Commission’s main conclusions are that:
- The threats legislation should be maintained but reformed;
- The current distinction between primary (e.g. manufacture and importation) and secondary (e.g. subsequent sale) infringers should be maintained. However, trade mark and design legislation should be amended along similar lines to the current threats legislation for patents, so that where an alleged infringer has carried out a primary act in respect of a particular product or article, a threat to bring infringement proceedings against that person can also refer to secondary acts by that person.
- Communications with secondary infringers should be permitted for all IP rights where the communications are made for a legitimate commercial purpose and the information given is necessary for that purpose. For example a holder of an IP right may need to inform a potential infringer of the existence of a right where infringement requires such knowledge, or the communication may be necessary to identify whether an infringement has taken place.
- The current defence to groundless threats proceedings in s70(2A)(b) of the Patents Act 1977 of a belief in the validity of the patent should be abolished as it unfairly places the risk of invalidity on the claimant in the threats action, whereas it is the patentee who is better placed to assess validity.
- Personal liability for professional advisors should be removed where they are acting in their professional capacity and on instructions from their client.
These reforms, if made, will be welcomed by owners of IP rights and their advisors. However, it is far from certain whether or when parliamentary time will be made available in order for the legislation to be amended. In the meantime, groundless threats remains a minefield and owners of IP rights should tread very carefully when making infringement allegations.