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Tuesday, 10 October 2017

The new unjustified threats bill – do's and dont’s

Threatening
Unjustified threats? Things have just changed in the UK, as former IPKat contributor Ellie Wilson explains. Ellie Wilson is a former InternKat, currently a research assistant at the Law Commission and visiting tutor of intellectual property law at King’s College London.

This post is some basic dos and don’ts for users of the new Act. It does not constitute legal advice, nor is it representative of the official view of the Law Commission – all views are Ellie’s own.

Here’s what Ellie writes:

“October 1st – in 1935 Dame Julie Andrews was born, in 1969 Concorde broke the sound barrier, and in 1971 Walt Disney World opened its doors for the first time. On October 1st 2017, the Intellectual Property (Unjustified Threats) Act 2017 came into force.  

The new law applies to communications sent after that date. For threats made before 1st October, the old law relating to groundless threats still applies.

The new threats provisions are designed to create a clearer framework for threats and to make the law consistent across rights. Reforms that were made for patents in 2004 have been adapted and introduced for trade marks and designs

Copyright is not within the scope of the new law. There are various reasons for this. First, there are no existing threats provisions for copyright. Also, the current provisions for registered rights allow the recipient of a communication to check a register for the right claimed to have been infringed; unregistered design rights are included to prevent the abuse of allowing threats to be made in respect of unregistered designs, when the true issue is registered designs. This was decided on the basis of consultation with those dealing with IP rights in practice.

Here are some basic dos and don’ts for users of the new Act.

If you want to communicate an express or implied threat of IP litigation…
  • DO: Feel free to talk to a lawyer, or trade mark or patent attorney
The new exemption prevents a personal action from being brought against a professional adviser.  Previously they could be sued by anyone affected by the threat, which could easily drive a wedge between the client and advisor.
  • DO: Seek out a primary actor
Is the person you want to write to an importer or a manufacturer of alleged infringing products?

If so, the threat would not be actionable – but threats to retailers, stockists are generally not allowed. These actors in the supply chain are likely to be the most harmed and the least harmful in terms of IP infringement.

If the trade source really can’t be found after taking reasonable steps to identify them, but (for example) a retailer can be, only then may the retailer be threatened with litigation for infringement.
  • DO: Send communications which give notice of an IP right’s existence. Or a person’s interest under the right. Or for the purpose of finding out whether (and by whom) a right has been infringed.

Threat
     These are examples of “permitted purposes”, a new concept in the Act which builds on the previous ‘exempted communication’.  It introduces some clarity into what can be safely sent without triggering a threats action.

As long as there is no express threat, and all of the information relating to any implied threat is necessary for the permitted purpose and reasonably believed to be true, the communication will not be actionable.

Historically it has been the risk of inadvertently making an implied threat that has either discouraged IP rights owners from enforcing their rights, or led to a “sue first, talk later” scenario.
  • DON’T: Issue threats in respect of an invalid patent, or where no infringement is taking place. 
This is an example of an unjustified threat (as well as being an “unconventional” litigation tactic).
  • DON’T: Threaten your competitors’ customers or retailers with litigation
First, look for the manufacturers and importers of infringing products, that is, for the sources of the infringement in the UK. It would also be sensible to keep a record of the reasonable steps taken to trace primary actors, as this provides a defence to an action for unjustified threats.
  • DON’T: Be afraid to assert your rights!
It is a defence to an action for unjustified threats that a right has been infringed, or that it would be infringed by intended acts.

And if you receive a threat…
  • DO: Read carefully.
 Letterheads can make any letter seem intimidating, but is there actually an express or implied threat? To be actionable under the new Act, a threat is defined as a communication from which a reasonable person would understand that :

o   (1) a patent, trade mark or design right exists and
o   (2) a person intends to bring proceedings against another person for infringement of that right, by acts done in the UK (or which, if done, would be done in the UK).

The threat no longer needs to refer to proceedings in the UK only, but to where the (alleged) infringements take place.

This is a departure from the previous law which applied to threats to sue in a UK court and hampered the Best Buy and NVIDIA threats actions. It also will allow of the threats regime to apply properly to unitary patents (if necessary) in the UK, without encroaching on the Unified Patent Court’s jurisdiction.
  • DO: Think - are you a manufacturer or importer (or intending to be one)?
If so, you will not be able to sue for a threats action, but this does not remove any methods of dispute resolution from the options available.

On the other hand, if you are a retailer, stockist or customer, or other person aggrieved by threats of infringement proceedings, you –or in all likelihood, whoever suffers loss should you stop taking their product – may be able to bring an action for unjustified threats.
  • DON’T Panic!
 The unjustified threats provisions have been clarified and made more consistent between rights.  The new legislation sets out in which circumstances a threat of litigation is unjustified.
  •  DON’T: Sue a professional adviser (such as a patent or trade mark attorney) in a personal capacity if they sent the threat on behalf of another.
Provided that they are acting on instructions in a professional capacity, and identify the person instructing them, then the advisor is not personally liable for the threat.” 

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