Patents, trade marks and registered designs: can you make a threat to sue?13 Nov 2017
It has long been the law in England and Wales that any threat to sue on a patent, trade mark or registered design could be the subject itself of an action by a person in receipt of the threat that the threat was unjustified. This has caused a number of practical problems, in particular, in being able to notify or find out who was conducting infringing activity. Here, IP partner for Kuits, Bruce Jones, explains how the Intellectual Property (Unjustified Threats) Act 2017 has sought to remedy this position.
One of the quirks of the law was that the lawyers acting for a claimant could also be sued for the unjustified threat. It has acted as a deterrent to pre-action correspondence and encouraged early litigation simply to avoid the threats provisions. Although they varied from Act to Act, and there was some minor reform in the case of patents in 2004, the problem remained that the mere mention of the selling activities of the infringer could lead to the claimant becoming a defendant.
The Intellectual Property (Unjustified Threats) Act 2017 has sought to remedy this position by making a number of changes to the law, most of which will be beneficial:
1. The regime for patents, trade marks and designs is now the same;
2. In relation to a manufacturer or importer of goods, it is possible now to mention their sales without the threats provisions being activated;
3. It is no longer possible to sue the lawyers acting on behalf of the client for unjustified threats, thus avoiding a layer of expense and conflict;
4. It is now possible to write to what was known as a secondary infringer, for example, a store selling product asking for details of its suppliers when it has not been possible to locate initially the manufacturer or importer. This is a valuable provision.
However, it is not possible to write a letter avoiding threats, even under the new regime, if it is not directly in relation to the acts complained of, i.e. a fishing expedition in relation to an unrelated product. This is the way the law seeks to maintain fair competition and avoid intellectual property rights being used in an oppressive sense.
This does not cure all the defects, however, with the regime. The solicitor’s letter can still constitute a threat, thus making the client liable for proceedings and the lawyer potentially negligent in not advising how to avoid that. Secondly, unless one goes through the precise regime of the Act, an unjustified threats action can still be brought. It has now been confined, though, to acts which take place in the UK and it is not possible to make a threat in the UK of activity abroad.
Defences are largely unchanged, save to take account of the changes set out above.
So what do I think? The Act implements long overdue reforms which brings the law regarding threats in relation to trade marks and designs in line with that relating to patents and is intended to provide parties with a clear framework within which to resolve the issues between them without the need for litigation. That said, the tort remains one of strict liability with no requirement of intention, only what is reasonably understood about the intention.
Even when the changes in the Act come into force, certain key concepts will require interpretation. For example, to what extent will the courts exercise their discretion to extend the scope of a permitted purpose in relation to permitted communications beyond those specified. Also, it is unclear what amounts to reasonable steps that need to be taken before a person making a threat can rely on the defence of last resort where no primary infringer can be found.
Having received Royal Assent on 27 April 2017, the Act is expected to come into force on 1 October 2017. As one would expect, the new provisions will apply in relation to events that have occurred after the commencement date. Therefore, any threats made prior to the commencement of the Act will be dealt with under the law as it stood prior to the changes introduced by the Act.
The principle underlying the transitional measure is that an alleged threat should be determined under the law in force at the time that the threat was made, not received.
For advice on this complex area of law, do not hesitate to contact Bruce Jones on 0161 838 7816, or email firstname.lastname@example.org