Patents, Trade Marks and Designs: Unjustified Threats

Current project status

• Initiation: Could include discussing scope and terms of reference with lead Government Department
• Pre-consultation: Could include approaching interest groups and specialists, producing scoping and issues papers, finalising terms of project
• Consultation: Likely to include consultation events and paper, making provisional proposals for comment
• Policy development: Will include analysis of consultation responses. Could include further issues papers and consultation on draft Bill
• Reported: Usually recommendations for law reform but can be advice to government, scoping report or other recommendations

The Intellectual Property (Unjustified Threats) Act 2017 received Royal Assent on 27 April 2017. It came into force on 1 October 2017.

The Act

The Intellectual Property (Unjustified Threats) Act 2017 received Royal Assent on 27 April 2017 and came into force on 1 October 2017.  The Act inserts new threats provisions into the main Acts and Regulations for patents, trade marks and designs. The new Act creates a framework within which parties can negotiate fairly over intellectual property disputes, but will protect those who can be most harmed by unjustified threats to sue for infringement.

The project

Patents, trade marks and design rights are valuable intellectual property (IP) rights and a vital foundation of economic growth. These rights ensure that innovation is rewarded and encouraged. The law provides a means by which they can be effectively enforced against infringement; however, this can be misused to stifle new ideas and competition. The mere threat of infringement proceedings can cause commercial damage to a business by influencing what customers buy. IP litigation, with some justification, is perceived as being expensive and disruptive. This is because it can involve specialist courts, judges, lawyers, attorneys and experts. Many faced with a threat may feel that the safest course is to take their custom elsewhere, perhaps to the very business making the threats. The law provides a remedy in the shape of the threats provisions. If a threat to sue for infringement is made where there has been no infringement, or the right is invalid, it is said to be groundless or unjustified. Any person aggrieved, that is whose commercial interests suffer because of the threat, may apply to court for a remedy. These are an injunction to stop the threats, a declaration that there has been no infringement and/or damages for loss caused by the threats. Although this is not a joint project, the threats provisions apply to Scotland and during the course of this project we have consulted with the Scottish Law Commission and been greatly assisted by our colleagues there.

The 2014 report and recommendations

In our report: Patents, Trade Marks and Design Rights: Groundless Threats, we recommended that:

• The protection against groundless threats of infringement proceedings should be retained but reformed for patents, trade marks and designs.
• A threats action may not be brought for all threats made to a primary actor, that is, someone who has carried out or intends to carry out one or more of the most commercially damaging acts. These are referred to as primary acts and include manufacture or importation of products or applying a sign to goods. This is already part of the current law for patents but should apply to all the rights.
• In certain restricted circumstances it should be possible to communicate with someone who would otherwise be able to bring a threats action. This would allow disputing parties to exchange information and try to settle their differences.
• A professional adviser acting in their professional capacity and on instructions from their client should not face personal liability for making threats.

The Government accepted these recommendations on 26 February 2015.

The 2015 report and recommendations

On 12 October 2015 we published a report in which we made two recommendations and provided a clause-by-clause explanation of the Bill. The recommendations were:

• To extend the protection of the threats provisions to European patents that will come within the jurisdiction of the Unified Patent Court.
• To modify the current test for whether a communication contains a threat.

On 24 November 2015, both recommendations were accepted by Government.