Knowledge & News

Unjustified threats in the UK – New uniform regime receives royal assent

3 May 2017

In the UK, a person threatened by proceedings relating to infringement of patent, trade mark or design rights can sue the person making the threats in certain circumstances. However, the substantive law and practice relating to unjustified threats differs considerably across these rights. The Intellectual Property (Unjustified Threats) Act, 2017, which received royal assent on 27 April 2017, is aimed at reforming this area of law by providing a clearer, uniform regime applicable across all of the above rights as set out below:

  • The Act provides a new test for determining whether a communication constitutes a threat. If a reasonable person in the position of a recipient understands from the communication that the right exists and that the person notifying the existence of the right intends to commence infringement proceedings against him or any other person in respect of an act done or to be done in the United Kingdom, then, a threat has been made. If that threat is unjustified, subject to the provisions discussed below, an action may lie against the person making the threat.
  •  If the threat relates to certain acts known as acts of “primary infringement”, it is not actionable. For example, in patent cases, threats relating to acts of making or importing a product for disposal, or using a process will not be actionable. The acts differ based on the right in question. 
  •  Similarly, if a primary infringer (i.e. someone who has done or intends to do any of the acts of primary infringement) is threatened with infringement proceedings, the person making the threats cannot be sued for unjustified threats.
  • The Act provides a framework for right holders to make genuine enquiries of third parties without fear of being sued. It states that implied threats of infringement proceedings made to third parties are not actionable if they are contained in a “permitted communication”. A “permitted communication” must be made for “permitted purposes”. For example, to provide notice of existence of a right or to ascertain the identity of a primary infringer.
  •  Any person aggrieved by unjustified threats can obtain a declaration, damages and/or an injunction against the person making the threats. It need not necessarily be the recipient of the threat.
  • A person who made the threat has two statutory defences available to him when sued for making threats. First, they can show that the threat is justified, i.e. that the acts in respect of which a threat was made were, or would be, infringing (“justification defence”). Secondly, they can show that they had taken “reasonable steps” to identify a primary infringer prior to making the threats and had notified the person aggrieved by the threats of those steps. What constitutes “reasonable steps” will depend on the circumstances of each case.
  • The Act protects professional advisers from an unjustified threats action provided they fulfil certain conditions. Although not expressly stated in the Act, it would appear that in-house advisers can also benefit from the protection.

Some of the provisions regarding commencement and the territory of the Act are now in force; whilst the remaining substantive provisions are likely to be brought into force by a statutory instrument later this year.  The Act is a positive step in providing greater clarity and certainty in the complex area of unjustified threats, but pitfalls still remain, and IP right holders must exercise caution and obtain professional advice, where possible, before communicating with alleged infringers.

Authors

Rajesh Sagar

Rajesh Sagar Managing Associate London (UK) Solicitor (UK)

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