In respect of most types of IP (but notably not copyright or passing off) the law contains what are known as “unjustified threats” provisions. Where one party threatens to take action against another for infringement of the first party’s IP rights, “any person aggrieved” by that threat can bring an action against the first party for unjustified threats.
The aggrieved party can seek damages, a declaration that the threats lacked justification, or an interdict/injunction preventing further threats. The key – often only – defence for a party faced with a threats action is to prove in court that the acts complained of did in fact infringe their IP.
The provisions are designed to protect businesses from commercial harm when faced with threats of court action if they continue with their allegedly infringing activities.
Imagine this scenario: Company A writes to company B’s customers, alleging that the products which they bought from company B infringe Company A’s IP. This can obviously have a detrimental effect on the customers’ businesses: they may have to pull the products from sale and their relationship with company B might be damaged. Company B (or the customers for that matter) can then bring an action against company A for threats.
The current threats provisions are unique to the UK and the Republic of Ireland. They are complex and unwieldy. Elsewhere in Europe, unfair competition laws address the problem. The Law Commission of England and Wales has consulted and – to the disappointment of some IP lawyers – opted not to repeal the provisions, but only to clarify them. An Intellectual Property (Unjustified Threats) Bill is currently being drafted. The key changes are aimed at providing consistency across all types of IP and protecting professional advisers who make threats on the instruction of clients and who, under the current law, are jointly liable for such threats.
From a lawyer’s perspective, the reforms may be useful but the benefits for IP owners are at best modest. UK based IP owners and those trying to enforce IP rights in the UK remain at a disadvantage in comparison to the rest of Europe. IP rights are designed to incentivise scientific and technological advancement, development and creativity. The threats provisions are surely a disincentive to do this. Why invest in a new idea if you have to sue every infringer as opposed to using your rights to persuade them to stop? Unfortunately, it seems that unjustified threats actions are here to stay.
If you think your IP rights are being infringed and are worried about unjustified threats then contact a member of our IP team:
Gill Grassie, Partner
Robert Buchan, Partner
On August 28, 2015