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IP disputes

Published: 12 July 2017
Area of Law: Intellectual Property

Unjustified threats – New Act endeavours to provide greater clarity

The Intellectual Property (Unjustified Threats) Act 2017 was amongst the various Acts of Parliament which have received Royal Assent during the “wash up” period  prior to Parliament’s dissolution. 
The Act received Royal Assent on 27 April 2017 following an expedited passage through parliament.

The Intellectual Property (Unjustified Threats) Act 2017

Whilst it remains the case that a party threatening to bring a claim for infringement of intellectual property rights (IPR) must do so carefully if they want to avoid a claim for unjustified threats, the Act represents the latest attempt to strike a balance between holders of IPRs and those affected by unjustified threats of infringement. 
The Act also seeks to iron out inconsistencies in the way unjustified threats had previously been dealt with so that there is uniformity in the way certain IPRs are treated.

As before, where unjustified threats are made, a recipient or someone affected by the threat can bring proceedings to prevent the continuance of the threat and to recover damages for any losses caused by the unjustified threat.
What is an unjustified threat?
The Act applies to threats involving patents, registered and unregistered designs and registered trade marks.  It provides that a communication contains an unjustified threat if a reasonable person in the position of the recipient would understand from the communication that (i) the specific IPR exists and (ii) a person intends to bring proceedings (whether in court in the UK or elsewhere) for infringement of that IPR, for an act done in the UK. 

Exceptions

As before, the Act provides exceptions which will prevent a claim for unjustified threats being actionable in respect of specified acts. 
The Act also introduces additional exceptions where the communication amounts to a “permitted communication”.  The Act provides that a communication will be permitted if it is (i) made for a “permitted purpose”, (examples of which are set out in the Act), (ii) necessary for that purpose and (iii) the person making the communication reasonably believes it to be true.  To help provide further clarity, the Act identifies a number of purposes which are not permitted.

Defence

As before, there is a defence to a claim for unjustified threats although it has been widened.  It is still a defence to show that the act complained of would amount to an infringement.  Additionally, it is a defence to show that the threat was made to a secondary infringer (for example a supplier or retailer), if having taken reasonable steps, a primary infringer (for example a manufacturer or importer), could not be found and the recipient has been informed of the steps which have been taken.   

 
Professional advisers

The Act closes a loop hole which had previously existed in the context of unjustified threats.  Once the Act comes in to force, professional advisers who act on instructions to make threats on a client’s behalf will no longer be liable for unjustified threats provided they identify who has instructed them, when making the communication.

Commencement

Although no date has been set, the Act is expected to come in to force later this year.

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