The Intellectual Property (Unjustified Threats) Act 2017

May 2017

The Intellectual Property (Unjustified Threats) Bill received Royal Assent on 27 April 2017.  This creates the Intellectual Property (Unjustified Threats) Act 2017 which is expected to come in to force in October 2017.  

The new laws reflect a review of the law of unjustified threats requested by the Department for Business, Innovation and Skills and the Intellectual Property Office in 2012.  The Law Commission consulted in 2013 and made recommendations for reform in 2014 and 2015. The current law will continue to apply until the new law comes into force, and legal advice should always be taken before any communication is sent that could be construed as a threat of infringement proceedings in relation to an intellectual property right.

The Act will amend the law relating to unjustified threats to bring proceedings for infringement of patents, registered trade marks, rights in registered designs, design right or Community designs.  There is provision to cover (at a later date) proposed European patents with unitary effect.  The goal of the new Act has been to create a framework within which parties can negotiate fairly over intellectual property disputes, whilst protecting those who can be most harmed by unjustified threats to sue for infringement.  Patents, trade marks and designs will all have essentially the same rules.

What constitutes a threat?

New provisions set out a test for whether a communication contains a threat.  In essence it asks whether a reasonable person would understand that an IP right exists, and whether someone is intending to bring proceedings for infringing that IP right, for an act done in the UK:

“A communication contains a “threat of infringement proceedings” if a reasonable person in the position of a recipient would understand from the communication that—

(a) a [IP right] exists, and

(b) a person intends to bring proceedings (whether in a court in the United Kingdom or elsewhere) against another person for infringement of the [IP right] by—

(i) an act done in the United Kingdom, or

(ii) an act which, if done, would be done in the United Kingdom.”

A threat can also be made in a mass communication, but it must be more than a general warning.

Is the threat actionable?

A communication that satisfies the new test, will be a threat and the threats provisions will apply.  Anyone whose commercial interests have, or might be, affected by the threat in a real way may sue; they need not necessarily be the recipient of the threat. 

However, not all threats to sue for infringement will give rise to a right to sue, so the next stage will be to determine whether the threat is an actionable one.  Notably, there are specific exceptions which, if applicable, prevent a person aggrieved from suing the person threatening, and these are set out specifically depending on the IP right in question and are detailed in each provision.  Explicitly setting out what constitutes “permitted communications” and “permitted purposes” aims to provide a means by which information can be exchanged to resolve disputes and to comply with the requirements of the Civil Procedure Rules.

The details on “permitted communications” and “permitted purposes” differ slightly according to the right in question as different information may be necessary for different rights.  However, it is explicit that any information that is given in a communication must be accurate and not mislead, for example, by the omission of details causing the IP right to appear to be of wider scope than it actually is.

Defences

In 2004, reforms to patent threats established a principle behind the threats provisions that where threats to sue become necessary, they should be directed to the primary infringer, but that in certain circumstances, someone who threatens a secondary infringer may have a defence where no primary infringer can be identified in respect of the right in question.  Equivalent sections now extend the defence to trade marks and designs.  For example, a supplier may be asked for information about the importer of the products it supplies.

Commencement

It is expected that the Act will come into force later this year, after required statutory instruments are passed.  The Law Commission estimates that ongoing benefits will result in total savings to businesses of around £1.66 million per annum.  It is claimed this is due to a reduction in the number of cases in which this area of the law will be engaged, as well as a reduction in the level of advice required even in cases in which it is engaged.

This update was prepared by HGF Partner Martyn Fish and IP Solicitor Liz Cooper. If you would like further advice on this or any other matter please contact Martyn or your usual HGF representative or visit our Contact page to get in touch with your nearest HGF office.

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