The Intellectual Property (Unjustified Threats) Act 2017 came into force this week. This Act provides remedies for unjustified threats to sue for infringement of a patent, trademark or design.
The Act also clarifies what right holders can say without the danger of retaliatory threat claims.
The test for a threat
The Act introduces into statute the test for determining whether a communication contains a threat. The test, which is the same for each type of Intellectual Property (IP) right, is whether a reasonable person in receipt of the communication, would understand that (i) an IP right exists; and (ii) a person intends to bring proceedings for infringement of the right by an act done in the UK.
The threats need not be made directly to an identified individual to satisfy the test. It can also be made by mass communication but must be more than just a general warning.
Who can bring an action?
If a communication contains a threat, it must then be determined whether someone is entitled to bring an action in respect of that threat.
Any person aggrieved by a threat may bring an action unless one of the exceptions apply. A person aggrieved is any person whose commercial interests have been or might be affected by the threat in a real rather than a fanciful way.
Exceptions – primary act and primary actor
Firstly, an aggrieved party cannot bring an action for unjustified threats where the threat concerns a primary act. A primary act is one of the principal infringing acts found within IP law. For example, applying a registered trade mark to goods or packaging.
Secondly, the primary actor exception means that a person who has carried out, or intends to carry out, a primary act cannot bring an action for threats made against them which refer to related secondary acts. For example, where a threat is made by a patent holder in relation to both the manufacture and sale of their patented product. The threat in relation to the sale, whilst not a primary act, will not be actionable as it is a related secondary act carried out by a primary actor.
Exceptions – permitted communications
The Act also provides that permitted communications will not be actionable. This exception allows rights holders to communicate and take some steps towards resolving disputes without running the risk of triggering litigation. It allows them to engage with those further down the supply chain in an attempt to identify the source of infringement.
A communication containing a threat is a permitted communication if: (i) it does not contain an express threat; (ii) the part of the communication which contains information that relates to the threat was made for a permitted purpose; and (iii) all of the information that relates to the threat is information that is necessary and the person making the threat believes them to be true.
Whilst the Act does not contain an exhaustive list of permitted purposes, it provides some examples such as giving notice that a patent exists or making a person aware of an IP right.
Following the introduction of the Act, the remedies available remain the same, namely, a declarator that the threats were unjustified, an interdict or injunction and damages.
The right holder can argue that the threat was justified as the act underlying the threat did constitute infringement.
The Act also introduces across all IP rights the defence, which was previously only available in relation to patents, that no primary actor can be found. The person who has made a threat to a person who is not a primary actor can make us of this defence where they can show that: (i) they have taken reasonable steps to identify a primary actor but have been unable to identify anyone; (ii) they have notified the person to whom they made the threat of the steps taken to find a primary actor; and (iii) the notification was given either before or at the time of making the threat.
This extension of this exception to all IP rights allowed right holders to prevent further commercial damage where they believe that infringement is occurring, or would occur.
The Act also makes the following further changes:
- An exemption for professional advisors
Under the previous law, professional advisors could be held personally liable for the making of threats. However, this is no longer possible provided that they are (i) acting on the instructions of a client; and (ii) they have identified that client to the person with whom they are communicating.
The Act now covers threats:
- issued on the basis of a pending right;
- to bring proceedings asking for delivery up and disposal of infringing goods, products or articles which a person has in their possession; and
- made in respect of the European patents with unitary effect.
The Act should be welcomed for the steps it takes to harmonise and clarify the law in respect of unjustified threats. It is helpful that there will now be a level of consistency across all IP rights. However, certain provisions still require a level of judicial interpretation and we will have to wait to see how the courts interpret them.