The Intellectual Property (Unjustified Threats) Bill finally received Royal Assent on 27 April 2017 during the “wash-up” period prior to dissolution of government ahead of the General Election in June. It is expected to come into force in October 2017. The bill implements the recommendations made by the Law Commission in their report of 2014 (discussed here in our previous blog) which followed a detailed review of the existing legislation for unjustified threats.
The Intellectual Property (Unjustified Threats) Act 2017 will replace the current unjustified threats provisions in the UK. The existing framework of legislation covering unjustified threats has been criticised for being complex, uncertain and inconsistent across IP rights. The new Act introduces several changes that are intended to make it easier for IP owners to enforce their rights and for parties to resolve IP disputes out of court without fear of an unjustified threats action. It also introduces a harmonised threats regime across patents, trade marks and registered and unregistered design rights. While some uncertainties may remain in the interpretation of the new provisions, the Act has generally been welcomed.
The key provisions of the new Act and the implications for IP owners are discussed below.
What constitutes a “threat”?
A new two-part test has been introduced which applies for each type of IP right and which is intended to provide clarity as to what constitutes an unjustified threat in a communication. The test is whether a reasonable person in the position of the recipient would understand from the communication that:
- An IP right exists; and
- A person intends to bring infringement proceedings in respect of that right by an act done or intended to be done in the UK.
The test is similar to that currently applied in relation to patents, but the wording of the test has been amended to require the threat to relate to acts done (or intended to be done) in the UK rather than requiring the threat to relate to bringing a claim in the UK. This is to enable the new threats provisions to extend to threats of proceedings under the UPC.
Exceptions #1 – primary infringers
A threat will not be actionable where it is directed at a primary infringer who carries out or intends to carry out an act of primary infringement, where the acts of “primary” infringement are set out in the relevant statues for each IP right. For example, the acts of primary infringement in relation to a patent are specified as: making or importing a product for disposal, or using a process.
The exclusion applies not only where the threat specifically refers to an act of primary infringement but to any threats made to primary infringers, e.g. in relation to acts of secondary infringement.
This provision provides a welcome extension of the approach currently applied for patents to trade marks and designs.
Exceptions #2 – permitted communications
The Act introduces the new concept of “permitted communications” with secondary infringers, which is intended to provide what has been described as a “safe harbour” to give IP owners more scope to communicate with potentially infringing parties in order to resolve disputes. Where a communication contains information that amounts to an implied threat, a threats action cannot be brought if the following conditions are met:
- The communication is made for a “permitted purpose”;
- All information relating to the threat is necessary for that purpose; and
- The person making the communication reasonably believes that information to be true.
The following are specified as being for a “permitted purpose”:
- Giving notice that an IP right exists;
- Discovering whether, or by whom, an IP right has been infringed;
- Giving notice that a person has a right in or under an IP right, where another person’s awareness of that right is relevant to any proceedings that may be brought in respect of that right.
On the other hand, the following are not deemed to be for a “permitted purpose”:
- Requesting a person to cease an activity in relation to an IP right;
- Requesting a person to deliver up or destroy a product;
- Requesting a person to give an undertaking relating to a product or process (for patents and designs), or use of a sign in relation to goods or services (for trade marks)
Exceptions #3 – professional advisers
The Act provides a new provision to give protection to professional advisers, such as patent and trade mark attorneys, against unjustified threats claims. While under existing law, any person making a threat can be sued, under the new regime, professional advisers can no longer be sued provided the adviser is:
- Regulated by a regulatory body; and
- Acting on the instructions of their client, who must be clearly identified in the communication.
The new provision has of course been welcomed by the professional advisers to whom it applies but is also hoped to make it easier for parties to communicate with each other in order to resolve IP disputes.
Remedies and defences
The available remedies in respect of an actionable threat are unchanged:
- A declaration that the threat is unjustified;
- An injunction against continuance of the threat;
- Damages in respect of any loss sustained by the person aggrieved by the threat.
The Act provides a defence for a person who has made a threat to a secondary infringer where that person can show that, despite “reasonable steps”, they have not identified anyone who has carried out (or intends to carry out) an act of primary infringement. The recipient of the threat must be notified of the steps taken, before at the time of making the threat.
While this provision has been criticised for using the potentially unclear term “reasonable steps”, it does provide a welcome extension of the approach currently applied for patents to trade marks and designs.
It is also a defence for the person who made the threat to show that the act to which the threat related constitutes (or if done would constitute) an infringement of the IP right.
For more guidance on what the new unjustified threats provisions could mean for you, please contact one of our attorneys.
This article is for general information only. Its content is not a statement of the law on any subject and does not constitute advice. Please contact Reddie & Grose LLP for advice before taking any action in reliance on it.