Intellectual Property (Unjustified Threats) Act 2017

The Intellectual Property (Unjustified Threats) Act 2017 (the Act) will come into force on 1 October 2017. The Act streamlines and harmonises provisions relating to unjustified threats to bring infringement proceedings for patents, registered trade marks, rights in registered designs, design right or Community designs.

History and objectives of the Act

Previously, the law relating to unjustified threats in respect of certain IP rights was considered by many to be unclear and inconsistent, particularly in relation to trade marks. Right holders were uncertain as to what, if anything, they could say to resolve infringement disputes with third parties and effectively enforce rights without facing an action for unjustified threats. The Act looks to redress this whilst still protecting and providing remedies to those who may be affected by an unjustified threat.

What constitutes a threat of infringement proceedings under the Act?

A threat is where a ‘reasonable person’ in the position of the recipient (the public, a section of the public or referenced individual) would understand from the communication that:

  • A right exists.
  • Someone intends to bring infringement proceedings against someone else for an act done, or intended to be done, in the United Kingdom. (Previously, an actionable threat was one made to bring proceedings in the UK; now an actionable threat is one made in respect of an allegedly infringing act, or potential act, in the UK, even where the threat was to bring proceedings elsewhere in Europe.)

Is the threat actionable?

Simply because a communication contains a threat, does not mean that it is actionable – there are various exclusions and defences set out in the Act.

Exceptions

Primary or intended primary acts of infringement (which differ depending on the IP right concerned) are excluded from unjustified threats proceedings. So too are secondary acts of infringement that are specifically linked to the primary act concerned.

By way of example, the making of a patented product is a primary act of infringement whereas the selling of the patented product is a secondary act of infringement. It is now permissible, in respect of all IP rights, to write to the primary infringer alleging primary and related secondary infringement – this communication will be exempt from a threats action.

‘Permitted communication’ and ‘permitted purpose’

Similarly, threat actions are not possible where the threat is considered a ‘permitted communication’. A permitted communication is one made for a ‘permitted purpose’, is necessary for that purpose and the person making the communication reasonably believes is true.

The Act sets out examples of what a ‘permitted purpose’ is, namely

  • Giving notice that a right exists
  • Discovering who is behind a primary act of infringement
  • Giving notice that a person has a right where another person’s awareness of the rights is relevant to any proceedings that may be brought in respect of that right.

The court has discretion to treat any other purpose as a ‘permitted purpose’ in the interests of justice. However, the Act explicitly states that certain requests may not be treated as a ‘permitted purpose’. For example, a request to stop using a mark, to destroy or deliver up goods or to provide undertakings.

Remedies

The remedies available for unjustified threats are essentially the same as before i.e. (1) an injunction to stop the continuation of threats, (2) damages for loss caused by the threat and (3) declaration that the threat is unjustified.

Defences
There are two main defences to unjustified threats proceedings. One is to show that the acts complained of constitute, or if done, would constitute an infringement. The other defence relates to threats made to secondary infringers. It applies where the right holder, despite taking ‘reasonable steps’, has not been able to identify the primary infringer and the person making the threat notified the recipient of the threat, of the steps it had taken to identify the primary infringer, before, or at the same time, as making the threat.

Professional advisors
Professional advisors can no longer be sued for unjustified threats, provided two conditions are met. , First, that it is made clear in the communication that the professional advisor is acting on the instruction of another person and, secondly, that when the communication is sent, the professional advisor identifies the person instructing them.

Final comments

The Act brings welcome change in that it offers greater clarity and certainty as to which communications are likely to constitute an unjustified threat. As a result, right holders can more effectively enforce their rights and try to resolve disputes without fear of litigation for unjustified threats. Equally, the Act continues to protect those on the receiving end of unjustified threats. Secondary infringers will now be under greater pressure to provide any information they have in respect of primary infringers or risk losing the right to bring unjustified threats proceedings. Finally, it will be interesting to see how case law evolves under the Act, including as to what might constitute other ‘permitted purposes’ and what ’reasonable steps’ are in relation to identifying primary infringers.

Authored by Rebecca Silva.