The Intellectual Property (Unjustified Threats) Bill (the Bill) sets out reforms to the law of unjustified, or groundless, threats as it applies to patents, trade marks and designs. The law in this area provides a remedy for those who are affected by unjustified threats. Threats to sue for infringement are unjustified where they are made in respect of an invalid right or where there has been no infringement. These Explanatory Notes explain what each part of the Bill will mean in practice.
New section 70 sets out the test for whether a communication contains a threat to sue for infringement of a patent. There are equivalent sections for the other rights. The new test has two parts. The first part, taken from the common law, is whether the communication would be understood by a reasonable person in the position of a recipient to mean that a right exists. The second part is whether the communication would be understood by such a person to mean that someone intends to bring infringement proceedings in respect of that right for an act done in the UK. This is also based on the current common law but has been modified so that the test can apply to European patents with unitary effect.
Threats may take many forms; they may be written or oral, implied or express. As is currently the case, the intention of the threatener when making the threat does not matter. Whether a communication contains a threat is decided from the point of view of a reasonable person in the position of a recipient.
Threats need not be made directly to an identified individual; a threat can be made more generally. However, it must be more than a general warning. Section 70(2) applies where a threat is made in a mass communication. It provides that, in such cases, the understanding of the reasonable person will be that of a recipient who is a member of the public, or a member of the section of the public to which the communication was directed.
A communication that satisfies the test at section 70, and equivalents, will be a threat and the threats provisions will be engaged in respect of it. However, not all threats to sue for infringement will give rise to a right to sue under these provisions. The next stage is to determine whether the threat is an actionable one. Section 70A, and equivalents, provide that any person aggrieved by a threat may sue under these provisions unless one or more of the exceptions contained in section 70A applies.
It is important to note that a person aggrieved need not be the recipient of the threat. Anyone whose commercial interests have, or might be, affected by the threat in a real rather than fanciful way may sue. It is also immaterial whether the person who made the threat is the owner, or has an interest in the right which is the subject of the threat.
Section 70B, and equivalents, provide the framework for a “safe harbour” to allow a rights holder (or someone acting on its behalf) to communicate with someone who might otherwise be entitled to sue because a threat has been made. What the threatener intended by the communication is not relevant, what matters is how it would be understood by a reasonable person in the position of a recipient. For that reason, communication with a third party can be fraught with difficulty. The opportunity to communicate safely with those who would otherwise be protected must not be used to make express threats to sue.
An injunction to stop the threats may be obtained as an interim remedy (before the court makes a final decision in the case) or final remedy (when the proceedings are concluded). Damages are awarded for the damage caused by the threat and which are the natural and reasonable consequences of the defendant’s acts. The successful claimant may also apply for a declaration that the threats were unjustified.
A threat is justified, and the threatener therefore has a defence, where it can be shown that the acts in respect of which the threat was made were, or would be, infringing. However, in its current form, the defence provides that the person aggrieved may still obtain a remedy if it is shown that the right in question is invalid in a relevant respect. An invalid right cannot be infringed; therefore a threat made in respect of it cannot be justified.
An established principle behind the threats provisions is that where threats to sue become necessary they should be directed to the primary actor. In certain circumstances, someone who threatens a secondary actor may have a defence where no primary actor can be identified in respect of the right in question. Provided that either before or at the time the threat is made the recipient has been informed of the steps taken to find the primary actor, the threatener may rely on the defence. Where appropriate, one such step is the use of the permitted communications exception to discover whether a primary act has been committed and by whom. For example, a supplier may be asked for information about the importer of the products it supplies.