New Law Provides Clarity On Groundless Threats

On 17 April 2017, the Intellectual Property (Unjustified Threats) Bill received Royal Assent, just being passed before Parliament was dissolved, in a move welcomed by practitioners. The Bill aims to make Intellectual Property disputes easier to resolve by harmonising what can and what can't be said in pre-action correspondence. Critics have argued that a major disadvantage of the previous regime was the lack of certainty as to what constitutes a threat as well as the inconsistency across different intellectual property rights. The Bill is expected to come into effect in October 2017 and bring with it a number of changes to the current system. These are discussed below:

Firstly, the test for whether a communication contains a threat will effectively become "would a reasonable person, in the positon of a recipient of the communication understand it to mean that:

A right exists;
Someone intends to bring infringement proceedings against someone else;
For an act done in the UK, or if done, would be done in the UK"

The new test includes the final point which was included as a way of ensuring the Bill can apply to patents that come within the unified patent court

Secondly, there has been an update to the list of situations whereby a person aggrieved is able to bring a threats action. This list has been widened to include "implied threats contained in a permitted communication".

The Bill goes on to elaborate further on the new concept of "permitted communication". The section is effectively a safety net for communications which otherwise would have amounted to an actionable threat. The guidance helps us to establish what communications amount to a "permitted purpose" and what communications do not. For example, for trade marks, the guidance tells us that a "permitted purpose" can be 'giving notice that a registered trade mark exists' and "discovering whether or by whom a registered trade mark has been infringed". The guidance provides clarity on what types of communication can be made without incurring any liability.

In addition to the above, the defences to a groundless threats action have been updated to include "the justification defence" in that the threat was justified and the "reasonable steps" defence in that the threat was made after the necessary steps to identify the source of infringement were taken.

Lastly, the Bill brings with it a provision that threat actions cannot be brought against professional advisors if they can show that they were clearly acting on the instructions of another person when communicating the threat.

On the whole the changes appear to be fair and a welcome addition to this area.