On 19 May 2016, the Intellectual Property (Unjustified Threats) Bills was introduced in the House of Lords as a Law Commission special procedure Bill. In essence, the Bill adopts 18 recommendations made by a 2014 Law Commission report to reform the current UK law relating to unjustified threats of IP infringement. 

Unjustified threats provisions were put in place in the UK to ensure that correspondence sent to potential infringers may be actionable if the threat was “groundless”. Under the current provisions, the recipient of the threat may make a claim against the rights holder or their IP advisor, seeking an injunction to stop the rights holder/IP advisor from making such threats and/or an award of damages and/or a declaration that the threats are unjustified. The unjustified threats provisions apply to three types of registered rights in the UK (patents, designs and trade marks), although the law is subtly different for each registered right. 

Commentators saw the current law as being confusing and fraught with risk so that correspondence to potential infringers had to be carefully written to avoid incurring liability for groundless threats. However, practitioners were perhaps overly cautious with respect to these provisions. It is to be borne in mind that an aggrieved person would have had to bring court proceedings in order to obtain relief. In trade marks in particular, it was sometimes a standard response to a cease and desist letter and often betrayed a misunderstanding of the provision.  

In any event, the Bill will provide greater clarity concerning to whom in the supply chain such correspondence should be addressed.  There is no doubt that misdirected threats made against non-primary infringers, such as retailers, suppliers and customers, can cause great damage to a business.  Under the new Bill, there will be no liability for threats aimed at parties responsible for ‘primary acts’ of infringement, such as manufacture and importation, applying an infringing sign to goods or their packaging, or supplying services under a sign. Whilst this was always the case, the wording of the current provisions was not always straight forward. For example, s 21 of the Trade Marks Act reads “where a person threatens another with proceedings for infringement of a registered trade mark other than…”.and then goes on to list activities associated with primary infringement. 

In addition, and most notably for IP practitioners, the Bill introduces a provision which means that proceedings in relation to actionable threats can no longer be personally brought against a legal representative where they have made threats to sue on behalf of a client.  As mentioned, under the current law, a statutory right of redress (for an injunction and damages) against unjustified threats applies to professional advisors too, meaning that representatives have often been wary of entering into such correspondence on behalf of their clients.  The unintended effect of this position was that parties were less inclined to communicate with an alleged infringer to try to explore settlement before launching legal proceedings for fear of counter-allegations regarding ‘unjustified threats’.

In our view, the overriding objective of the Bill, namely to make it easier for businesses to enter into negotiations in order to settle IP disputes and to avoid litigation, can only be a positive development for all parties concerned.  Whilst it is difficult to balance the needs of rights’ holders to protect their assets on one hand, and the needs of others not to receive abusive threats for infringement on the other, we believe that these reforms go some way in achieving this. These reforms also serve to harmonise the threats provisions across different IP rights, ready for the future introduction of the Unified Patent Court.