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Intellectual property infringement - proceedings threats

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Under UK patent, design and trade mark law...

... if an IP right owner when dealing with an intellectual property infringement communicates with a third party about his rights in such a way that what he says may be taken as a threat to bring proceedings in the UK, any person aggrieved has a possible right to sue for damages and for an injunction to prevent further threats being made. 

One reason for the law providing for this remedy in the situation of intellectual property infringement threats is to try to prevent abuses by IP rights owners, which have a chilling effect on the commercial activities of others, and which can effectively stifle competition.  However, on the flip side many rights owners feel that the risk of being sued by a third party with deeper pockets, for notifying it that a product it sells may infringe some IP rights, prevents rights owners from being able to enjoy the benefit of the very rights that they have paid for in the IP they have invested in.  This, in turn, can inhibit the willingness of smaller businesses in particular from investing in registered IP, which can then prevent the publication and sharing of many new innovations, to the detriment of society as a whole.

As a result of these conflicting interests a fair balance obviously needs to be struck, and clarity is needed in the law so that everyone knows where he stands.  At the moment the law is a bit of a mess in this area, but yesterday the Law Commission published a report on the topic, and has also published a draft Bill intended to bring reform - the Intellectual Property (Unjustified Threats) Bill: see Appendix C to the full report here for those interested in a good read.

The proposals have been criticised for not also introducing threats provisions in relation to other IP rights such as copyright, passing-off and database rights, but the proposals are still a (small) step in the right direction.  Most notably the proposals make life a little easier for IP rights owners in that they set out a structured regime which allows IP rights owners to communicate with third parties in order to gather information about possible infringements without the worry of being sued.  They also help in making it clear that solicitors writing letters on behalf of clients cannot be sued for doing so – this problem has often created concerns of conflicts between solicitors and clients if solicitors might be sued for acting on instructions, and it has often been used by infringers to threaten solicitors in order to try to intimidate them and their clients.  These proposed changes are therefore welcome ones. 

One area of new concern for intellectual property rights holders though is that the proposed new law now states clearly that the threat needn’t be a threat of proceedings in the UK, but of proceedings anywhere, in relation to acts in the UK.  This is a particular problem in the EU free trade area where it is equally likely that someone infringing in the UK may be infringing in other EU countries as well, and the proposed change only adds to difficulties which already exist.  The real problem stems though from the lack of any harmonisation across the EU in this area of law.  We currently have a situation where some countries (including the UK, Ireland and Germany) have threats type provisions in their laws, but others don’t.  As a result, it is possible that a company in one country, which send a letter to a company in a another country about an alleged infringement, could find itself being sued for making unjustified threats in a country where it has no presence or representation, and in a language it does not understand.  Quite a risk just from sending a single email or letter.

EU-wide reform rather than UK reform is certainly needed, but in the meantime, and in any event, it is crucial that businesses take expert advice before sending any communications and before making any statements which could be considered to contain (whether expressly stated or not) a threat of infringement proceedings.  

Should you wish to discuss this issue of intellectual property infringement or any other area of IP law, please contact Sue Streatfield on 0113 227 3601 or via email sue.streatfield@clarionsolicitors.com

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