The UK has for a long time had laws in place that make it illegal for IP owners to make “unjustified threats” to bring proceedings for infringement of registered IP rights. In recent years, this prohibition has been narrowed to exclude threats made in respect of primary infringement (i.e. manufacturing, importing or supplying services), but it still applies to threats made against those alleged to be committing secondary infringement, especially retailers.
The aim of the legislation is to prevent IP owners making bogus threats against competitors or their customers which might have the effect of disrupting entirely lawful trade, without the matter ever going to court: the so-called “chilling effect”. For retailers who received a threat of an IP claim it made sense to simply de-list the product, rather than take any risk. The unjustified threats provisions reduced this problem.
However, the law has been made overly complex over the years, with different registered IP rights having different tests for when a threat is actionable. In particular, for all rights excluding patents, making a threat against an alleged primary infringer was actionable if the threat also referred to the infringer’s secondary activities. In addition, an infringer could not only take action against the IP owner, but also against the lawyer or attorney who made the threat on their client’s behalf.
Of course, an IP owner would only ever be liable for threats which were “unjustified”, in the sense that there was no IP infringement or the IP on which the threat was made turned out to be invalid. But the complexity and potential risks of being on the receiving end of an unjustified threats action had its own chilling effect, and put IP lawyers (such as me), who were instructed to write a cease and desist letter where the merits of the claim were uncertain, in an awkward position with their clients.
Changes to the rules have now been proposed. These will make the rules identical across patents, registered trade marks and registered designs. However, there are no plans to apply the unjustified threats prohibition to other rights, such as copyright, confidential information and passing-off (unregistered trade marks).
The new rules are likely to come into force in 2016 or 2017 and will:
- prevent an unjustified threats action where the threat is made against a primary infringer, even if the threat also relates to secondary infringement activities by the same person;
- clarify that a secondary infringer, such as a retailer, can be contacted to notify them of the existence of the IP right concerned, discovering whether there has been an infringement and by whom, notifying the recipient of the IP owner’s rights, and for other purposes as the court decides;
- allow a threat to be made against a secondary infringer when the IP owner has used all reasonable steps to find the primary infringer but cannot do so;
- cover a threat made under a Community Patent or Community Trade Mark where the alleged acts are committed within the UK; and
- prevent a claim being brought against a professional adviser, who is acting on instructions of their client, and where the identity of the client making the threat is made clear in the communication.
In my view, it is a shame that the opportunity has not been taken to extend the provisions to other, unregistered, rights such as copyright and passing-off, which are just as open to abuse as registered rights. In this regard the law in the UK remains inconsistent for no discernible reason.
The commission which proposed the new legislation admits that it has only really applied a temporary patch to the issue. There is a real need for this to be addressed by the European Commission as part of the harmonisation of IP laws across the EU, to ensure IP owners have a consistent message about what they can and cannot do in all EU Member States.
 Law Commission for England and Wales Report no 360 (October 2015): “Patents, Trade Marks and Design Rights: Unjustified Threats” and accompanying Intellectual Property (Unjustified Threats) Bill 2015.