A step in the right direction
The recent reform of the UK Unjustified Threats Regime brings clarity to the law but is it enough, ask Peter Damerell and Rajvinder Jagdev of Powell Gilbert.
The law in the UK in relation to unjustified threats has always been complex, with inconsistent provisions for patents, trade marks and design rights. However, the Intellectual Property (Unjustified Threats) Act 2017, which came into force recently, has unified and simplified the law. It also attempted to strike a better balance to ensure that rights holders can protect their rights but are not able to misuse threats of infringement to distort competition or stifle innovation. These changes aim to reduce legal costs and complexity, and encourage parties to engage in legitimate pre-action communications.
First, confusing differences between the threats provisions for patents, trade marks and design rights have been removed. The threats provisions remain within the Acts to which they relate (for example, the patent provisions are in the Patents Act 1977 and the UK trade mark provisions are in the Trade Marks Act 1994), but the amended threats provisions for each of the rights follow the same structure and are the same in almost all material respects. These changes should make the provisions easier and less costly to apply. Of particular importance, the “primary actor” exemption for patents has been extended to trade marks and designs, which means that a threat that is made to a person engaging in a primary act can include reference to a secondary act of infringement without becoming actionable (previously, any mention of a secondary act in a threat would make it actionable).
Secondly, a new “safe harbour” has been introduced to clarify what communications with secondary actors can take place without constituting actionable threats, although this exclusion does not apply to express threats to sue for infringement. A communication to a secondary actor that may constitute an implied threat is now not actionable if it is contained in a “permitted communication”. The definition of a “permitted communication” is detailed and should be reviewed, but can be summarised as a communication made solely for a “permitted purpose”, only containing information necessary for that purpose and which the person making the communication reasonably believes to be true. The main “permitted purposes” are to give notice that a right exists and to discover if primary acts of infringement are being carried out and by whom. It will continue to be necessary to draft any communications with secondary actors carefully to ensure that no liability arises.
Thirdly, there is a welcome change for practitioners. A new statutory defence has been implemented whereby professional advisers are no longer personally liable for a threat where they are acting in a professional capacity and on instructions, provided the person on whose instructions the threat is being made is identified in the threatening communication. This defence does not neutralise the underlying liability for threats, which remains with the client. It is available where the professional adviser is overseen by a regulatory body, which therefore includes UK solicitors and patent and trade mark attorneys, but the definition of “professional adviser” is also broad enough to include foreign advisers, provided they are regulated in their jurisdictions. The rationale behind this is that any misconduct by professional advisers would be dealt with by their regulators.
Finally, although the test for whether a communication contains a threat remains largely the same as before, the required link between the threat and the UK has changed. Previously, the threat would have had to have been to bring infringement proceedings in a UK court. Now, however, the threat must be understood to relate to an act done (or one which would be done) in the UK, but the threatened infringement proceedings could be brought in a UK court or elsewhere. This change was necessary to allow threats in respect of a Unitary Patent to be actionable in UK courts, as actions for infringement of Unitary Patents will fall under the exclusive jurisdiction of the Unified Patent Court (UPC), which, whilst partly located in the UK, will not legally be a “UK court”. In practice, given that issues of infringement and validity are raised in most threats actions, for which the UPC will have exclusive jurisdiction, it is likely that such threats actions will need to be stayed whilst these issues are determined by the UPC.
These reforms bring much needed clarity to what was a perplexing regime. It remains to be seen, however, whether these evolutionary changes to the threats provisions are sufficient to resolve the challenges in this area, or whether more fundamental changes are required in due course, such as the introduction of a new tort based on unfair competition or abusive communication.
Peter Damerell is a partner and Rajvinder Jagdev is a senior associate at leading IP law firm Powell Gilbert LLP.