The Law Commission's final report on its proposals for reform in the area of groundless threats concludes that protection against groundless threats in relation to patents, trade marks and design rights should be retained, but reformed.
A groundless threat is made where (i) there is no actual infringement; (ii) there is no real intention to follow up with enforcement proceedings, or (iii) the threat is made in respect of a right which is invalid and therefore unenforceable. A party subject to a groundless threat may apply to court for an injunction to stop the threat being made, damages, and a declaration that the threat is unjustified.
The provisions were originally enacted to prevent rights holders misusing their right to enforce (eg to remove competitors from the market) and to ensure development of new ideas and inventions was not stifled. However a balance needs to be struck. Concerns in relation to the current law are that it is not clear or easy to apply, it prevents a rights holder from setting out its complaint in full and results in increased costs and an extra layer of complexity.
In addition to making the law clearer to understand, there is a particular desire to make the threats provisions more consistent between patents, trade marks and designs (which is not currently the case).
The Law Commission's report includes the following recommendations:
- Bring the provisions in relation to design rights and trade marks in line with patents so that a threats action may not be brought for threats made to those who carry out 'primary acts' of infringement (eg making, importing, supply services under a mark).
- Communications with 'secondary actors' (eg retailers/suppliers of infringing goods) should be permitted where there is a legitimate commercial purpose behind it (eg to track down a primary actor).
- A legal or professional adviser should no longer be jointly liable for making threats where they are simply acting in their professional capacity on their client’s instructions.
The proposed reforms are a step in the right direction, but the report does not include a draft Bill and therefore it remains to be seen how quickly new legislation to put the reforms into effect will be enacted. In the long term, it is possible that the provisions will be abolished altogether and replaced with a new cause of action based on unfair competition law, which would bring English law in line with European law (where this cause of action already exists). For now though, the law remains unchanged.
The author Georgina Shaw is a member of our Intellectual Property team led by Jeremy Dickerson.