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Threatening Behaviour

» Posted on: 2 Jun 2016

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One of the more controversial aspects of intellectual property legislation is the availability of an action for “unjustified threats”, ie a claim that can be brought against the person alleging infringement of patent, trade mark or design rights.

This area has been in need of reform for many years and has at last been addressed in the recent Queen’s Speech, in the form of the Intellectual Property (Unjustified Threats) Bill. The main proposals in the Bill are to iron out the differences between the threats position applicable to patents and other forms of intellectual property right but also to clarify the definition of a “threat” and to remove the sanction against professional advisors. 

Normal practice when an intellectual property right is infringed is for the claimant’s solicitor to write to the infringer pointing out the existence of the claimant’s rights and demanding undertakings, against the threat of commencing Court proceedings. The object of the “threats” provisions is to permit a person who receives unjustified threats of proceedings to bring an action against the person making those threats. No protection is afforded to an infringing manufacturer or importer but the provisions apply to others in the supply chain, eg distributors and retailers. 

Historically, two major problems have arisen from these provisions. First, the definition of a “threat” – in order to avoid a threats action, a practice has grown up of “notifying” the claimant’s rights but attempting to express the notification letter such that it does not come across as a threat. This has led to uncertainty and rich pickings for the Courts in the interpretation of such letters: the Bill seeks to resolve this by setting out a definition of “permitted communication” which will not be an actionable threat. 

The second and more pernicious consequence of the existence of the threats provisions was the availability of a remedy against professional advisors. It can often be the case that major distributors or retailers are the driving force behind an infringement but are not the manufacturer or importer. The availability of a threats action against advisors has had the unintended consequence of permitting those with deep pockets to intimidate claimants by threatening to sue their solicitors. In all other spheres of legal activity a threat of proceedings made by a solicitor on behalf of his client, when made in good faith and on instructions, is not actionable against the solicitor. The Bill extends that position to threats of infringement of intellectual property rights, thereby levelling the playing field. Hitherto it has often been necessary for solicitors (when accused of threats) to cease acting for their clients because of the conflict of interest that arises. The Bill rectifies that position and is a very welcome development for design-led businesses in making it clear that where a professional advisor is acting in a professional capacity, is regulated in the provision of legal services or as a trade mark or patent attorney and makes the threat on behalf of a client who is identified in writing, he cannot be sued by the recipient of the threat. 

This is a welcome development and long overdue, properly depriving deep pockets defendants of the opportunity to drive a wedge between designers and their representatives.

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