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Be Careful Who You Threaten

» Posted on: 24 October 2006
» Posted by: Tony Catterall
» Service area: Intellectual Property

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You know that your IP rights are valuable business assets, so you’ve registered your trade marks, lodged your community design registrations and filed your patents.

Now you think your rights have been infringed. You immediately fire off an angry letter threatening Court proceedings and that major damages will be payable in your direction for what they have done. Big mistake! - as Tony Catterall, leading IP Specialist and Senior Partner at Taylors explains.

The Patents Act, the Trade Marks Act and the Community Design Regulations all provide that an aggrieved person (not just the recipient of your letter) can bring an action against you for “threats of infringement”. This law is to prevent the use of IP rights as a commercial weapon against your rivals’ customers.

Don’t think either that you can get around this problem by marking your letter “without prejudice”. The Court will only protect such communications if they are made in genuine settlement negotiations – hardly likely in those circumstances.

So, instead of being the aggressor taking the initiative, you’ll find yourself on the receiving end of a damages action and injunction proceedings. If you have sent letters to your rival’s customers and they’ve stopped orders on the strength of your letter, then you could be on the receiving end of a substantial claim.

There are only two defences to what is known as a “threats action”. Either justification (ie. it’s now up to you to prove that the person you have threatened was in fact infringing your rights (not always that easy!); or you threatened someone making the infringing product or importing the product, not one of their customers or suppliers.

So what action should you take when you learn of an infringement of your IP rights (other than calling Taylors IP Team)? If you must rush into print, the only safe course is to send a “mere notification” letter advising of the existence of your IP rights but no more.

Please note that you’re back in trouble if you add anything to the notification such as a statement that “your rights will be enforced”, so be polite and don’t make any threats.

Copyright 2006 - 2010 Taylors Solicitors

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