The Law Commission has recently published its long awaited final report on its review of the groundless threats provisions for IP rights. The report makes a number of interesting proposals for the
The Law Commission has recently published its long awaited final report on its review of the groundless threats provisions for IP rights. The report makes a number of interesting proposals for the retention, but reformation, of the law relating to groundless threats.
The current law on threats
Under the current provisions, allowing rights holders to enforce their patent, trade mark or design rights must be balanced with the need to prevent the misuse of threats. Currently, to establish a case, a party bringing a claim for groundless threats must show that:
1) there has been a threat;
2) the claimant is 'aggrieved'; and
3) the threat is unjustified.
Certain exceptions apply and no right of action exists for the recipient of a groundless threat where the alleged infringement concerned is a primary act of infringement, such as a threat made towards the trade source for manufacturing or importing a product. However, there are concerns that the current framework does not distinguish clearly enough between primary infringers and secondary infringers who are one step removed from the trade source, such as retailers or customers. What is more, the present provisions are seen as being excessively broad and structured in a way which encourages litigation rather than negotiation.
What has been proposed?
The consultation focused on two models for reform, the first of which is aimed at extending the majority of the reforms made to patent law in 2004 to trade mark and design rights. The second model proposed the introduction of a new cause of action for making false allegations in the course of business, loosely based on the Paris Convention. On balance, the consultees favoured the first, less radical approach. As a result, 18 recommendations have been made by the Law Commission, including:
1) A groundless threats action should not be brought by a party which has committed (or intends to commit) a primary act, regardless of whether it has also committed a secondary act of infringement. This is designed to combat the problem raised in Cavity Trays v RMC Panel Products, in which a groundless threat claim for a primary act became actionable if the threat also mentioned a secondary act. This recommendation already applies under patent law, so the extension to trade marks and design rights will be welcomed by rights holders.
2) Rights holders should have a 'safe harbour' of pre-proceedings communication with secondary infringers that will not amount to threats where there are legitimate commercial reasons for the communication.
3) A party making a groundless threat of alleged patent infringement should not avoid liability simply because it was not aware, or had no reason to suspect, that its patent was invalid.
4) Advisors acting in their professional capacity on client instructions should no longer be jointly liable for threats.
Comment
The Commission's recommendations re-balance the trade-off between IP owners and traders, making it easier for IP owners to effectively protect their rights without fear of falling foul of the provisions, whilst also safeguarding genuine competitors from unjustified threats. The recommendations aim to make the UK a more attractive jurisdiction in which to resolve IP disputes, by making the law clearer, easier to apply, and more consistent across different IP rights. Whether wider reforms will be considered necessary in the future remains to be seen but in the short term, the recommendations will no doubt be welcomed by both practitioners and IP owners alike.
The current law on threats
Under the current provisions, allowing rights holders to enforce their patent, trade mark or design rights must be balanced with the need to prevent the misuse of threats. Currently, to establish a case, a party bringing a claim for groundless threats must show that:
1) there has been a threat;
2) the claimant is 'aggrieved'; and
3) the threat is unjustified.
Certain exceptions apply and no right of action exists for the recipient of a groundless threat where the alleged infringement concerned is a primary act of infringement, such as a threat made towards the trade source for manufacturing or importing a product. However, there are concerns that the current framework does not distinguish clearly enough between primary infringers and secondary infringers who are one step removed from the trade source, such as retailers or customers. What is more, the present provisions are seen as being excessively broad and structured in a way which encourages litigation rather than negotiation.
What has been proposed?
The consultation focused on two models for reform, the first of which is aimed at extending the majority of the reforms made to patent law in 2004 to trade mark and design rights. The second model proposed the introduction of a new cause of action for making false allegations in the course of business, loosely based on the Paris Convention. On balance, the consultees favoured the first, less radical approach. As a result, 18 recommendations have been made by the Law Commission, including:
1) A groundless threats action should not be brought by a party which has committed (or intends to commit) a primary act, regardless of whether it has also committed a secondary act of infringement. This is designed to combat the problem raised in Cavity Trays v RMC Panel Products, in which a groundless threat claim for a primary act became actionable if the threat also mentioned a secondary act. This recommendation already applies under patent law, so the extension to trade marks and design rights will be welcomed by rights holders.
2) Rights holders should have a 'safe harbour' of pre-proceedings communication with secondary infringers that will not amount to threats where there are legitimate commercial reasons for the communication.
3) A party making a groundless threat of alleged patent infringement should not avoid liability simply because it was not aware, or had no reason to suspect, that its patent was invalid.
4) Advisors acting in their professional capacity on client instructions should no longer be jointly liable for threats.
Comment
The Commission's recommendations re-balance the trade-off between IP owners and traders, making it easier for IP owners to effectively protect their rights without fear of falling foul of the provisions, whilst also safeguarding genuine competitors from unjustified threats. The recommendations aim to make the UK a more attractive jurisdiction in which to resolve IP disputes, by making the law clearer, easier to apply, and more consistent across different IP rights. Whether wider reforms will be considered necessary in the future remains to be seen but in the short term, the recommendations will no doubt be welcomed by both practitioners and IP owners alike.