On October 1, The Intellectual Property Unjustified Threats Act 2017 (“The Act”) came into force. According to experts, The Act will reform United Kingdom law on unjustified threats in IP infringement disputes.

Peter Brownlow, Partner in the International IP Group at Bird & Bird LLP, recently sat down with Inside Counsel to discuss the new act in detail.

Currently, U.K. legislation provides that a person (typically the rights holder) must not threaten another person with proceedings in a U.K. court for infringing a patent, registered trademark, registered design or unregistered design. If a threat is made, then anyone whose commercial interests are, or are likely to be, adversely affected by the threat can issue proceedings against the maker of the threat seeking damages, an injunction to prevent the threat being repeated and a declaration that the threat was unjustified.

“IP litigation has the potential to be expensive and commercially disruptive,” explained Brownlow. “The original threats provisions were introduced over one hundred years ago, as some businesses were threatening their competitors' customers with IP infringement actions. The threat to sue for infringement of a patent, trademark or design were taken so seriously and the customers would often stop buying the competitor's products.”

Threats provisions for patents, trademarks and designs were introduced to provide a remedy to a person aggrieved, such as the competitor in the above example, per Brownlow. Over many years, the threats provisions for patents, trademarks and designs developed separately and became inconsistent. They were also seen as more in favor of the aggrieved party than the IP owner. And, they were seen as inhibiting parties from corresponding to resolve IP disputes at the pre-action stage.

The Act sets out several changes to the law of unjustified threats. It aims to make the different provisions for trademarks, patents and designs consistent. The changes seek to strike a balance which allows rights holders to protect IP, but not to misuse threats to stifle competition. The Act also provides a framework within which disputing parties can exchange information to resolve disputes and protects professional advisers from personal liability for making threats on behalf of their clients.

“What amounts to a threat now covers all communications that would be understood by a recipient to mean someone intends to bring infringement proceedings in relation to acts done in the U.K.,” Brownlow explained.

It is not necessary for the recipient to believe the threat to bring U.K. proceedings, just that the acts take place in the U.K. This would cover threats of EU trademark infringement seeking pan-EU relief but where proceedings are brought in the court of an EU member state other than the U.K. It also ensures the provisions can apply to the unitary patent. A threat can also be made in a mass communication such as a press release.

According to Brownlow, the consequences of making a threat that falls within the unjustified threats provisions is that the IP rights holder can be sued by a business damaged by the threat. The remedies available include a declaration that the threat is unjustified, an injunction to prevent future threats as well as an award of damages and legal costs. He said, “While it is now easier to make threats that fall within the exceptions to the unjustified threats provisions, it is still important that cease-and-desist letters and other warnings to infringers or potential infringers are properly drafted.”