In what has been a politically and legislatively busy period, IPcopy notes that the new Intellectual Property (Unjustified Threats) Act 2017 was granted Royal Assent on 27 April 2017. The purpose of this act is, in essence, to prevent groundless threats being issued against a party relating to purported IP rights while harmonising the position across patent, trade mark and design rights. Currently available provisions can expose an IP rights holder with a potentially genuine claim to the risk of becoming a defendant themselves, resulting in the rights holder bearing the burden of proof of infringement. For a claimant who may be financially unable to expose themselves to such a risk, this potentially provided a steep barrier to entry and could lead to genuine grievances being abandoned. It is also acknowledged that, whilst it is necessary to offer a defendant a method of defence against a baseless and aggressive threat, it has the potential to create an overly litigious atmosphere, and disputes which could be solved with discussion are instead hauled in front of the courts.
The reforms presented in the Act aim to remove such deficiencies by more clearly defining what does and does not constitute a ‘threat.’ In addition, provisions are now included which bring trade mark and design legislation into accordance with the position for patents. A summary of the key changes brought into effect with this Act are outlined below.
Definition of a threat
The Act introduces a two-part test of what criteria a communication must meet in order to be considered to constitute a threat. The first element of this test is unchanged from existing law and relates to whether a reasonable person would understand that a communication contains a declaration that a right exists, and that infringement proceedings are intended to be undertaken by a party in respect of this right.
The second element that the communication must contain is whether a reasonable person would understand that the threat relates to an act done (or an act which would be done) in the UK. This is a deviation from the present provisions, which state that the threat of proceedings would be brought before UK courts in respect of an act which has been done. This provision has largely been included in order to suitably prepare for the introduction of the Unitary Patent (although the timeline for such an introduction is currently in a state of flux, as discussed in this previous IPcopy post).
Extension of existing patent legislature to trademarks and design rights
Patent legislature has, since 2004, included the provision that any threat relating to patent infringement which has been issued against a primary infringer cannot be considered to be actionable, even if such a threat relates to acts of secondary infringement. This has now been extended to cover trademarks and design rights. This allows rights holders of trade mark and design IP more reassurance that their assertion of rights will not constitute an unjustified threat.
Additionally, the ‘reasonable steps’ defence is now available to communications made in respect of trademarks and design rights, when issued against secondary infringers. Previously available when discussing patent rights, this allows a right holder to communicate with a secondary infringer where they can show they have taken ‘reasonable steps’ to discover the identity of a primary infringer, with no success. Such steps must be communicated to the secondary infringer when communicating with them. The test of reasonability will vary from case to case.
Whilst these extensions act to bring more harmony between the various facets of Intellectual Property, it is worth noting that other areas of IP (such as copyright) are not covered, and so particular care must still be exercised when dealing with these areas.
Communications with secondary infringers
Communicating (and potentially threatening) a secondary infringer of an IP right is reasonably understood to be needed only in exceptional circumstances. The Act now offers guidance for a rights holder to communicate with a secondary infringer without accidentally triggering an unjustified threat, by setting out a list of ‘permitted communications.’ This will enable a rights holder to more safely navigate the potential minefield of communicating with a secondary infringer, and may allow more disputes to be settled out of court. This new guidance applies equally to patents, trademarks and design rights.
Broadly speaking, a permitted communication is one which is made for a permitted purpose (see below) relating to the threat, information relating to the threat must be necessary for that purpose, and the information must be reasonably believed to be true by the person making the communication.
Identified permitted purposes include (but may be extended by the Courts where applicable):
- Providing notice that an IP right exists;
- Ascertaining if a right has been infringed by means of a primary act of infringement, and/or the perpetrator(s) of such an infringement; and
- Giving notice that a person has a right in or under an IP right, where another person’s awareness of the right is relevant to any proceedings brought in respect of that right.
The Act also details types of communication which do not fall under the above provisions, such as requesting a person to deliver up or destroy goods.
Professional advisors’ liability
In an attempt to dissuade arguments between a rights holder and their advisors, the Act now allows for professional advisors to have an indemnity from having unjustified threats claims brought against them, so long as they have identified in their communication that they are acting on instructions from their client.
As of writing, the introduction of this Act into law does not yet have a firm date, and the occurrence of the snap General Election serves to make predicting a date difficult. It is reasonable to assume however that these provisions will be passed by the end of the year, possibly as early as October. Please stay tuned to IPcopy for more updates.
Mark Levy 27 June 2017