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Threats: a move towards clarity at last?

In what is often a complex area, the recent Intellectual Property (Unjustified Threats) Bill aims to provide clearer and more consistent rules for intellectual property users relating to threats and when they are justified and unjustified. A good example of the difficulties is the recent case of T&A Textiles and Hosiery Ltd v Hala Textile UK Limited and others.

Threat provisions in intellectual property legislation apply to:

  • patents;
  • registered trademarks;
  • registered designs; and
  • unregistered designs.

It seeks to deter owners of intellectual property rights from making unjustified threats to retailers. Especially where such commercial pressure is unwarranted and causes a retailer to stop its activities, out of fear of being sued. There is currently a lack of coherence in the application of the rules on threats across each intellectual property right, hence the desire for legislative reform.

Case developments 

In T&A v Hala the claimant brought an action for infringement of its bed linen products. In this case, the defendant made a counterclaim for unjustified threats by the Claimant, both to its customers and in correspondence with eBay. 

Interestingly, the Court considered whether a notification sent via eBay's Verified Rights Owner system (essentially, eBay's complaints system) constituted a threat or whether it was merely a notice that the rights in question were registered or owned by the claimant. The provisional view of the deputy judge found that the initial notice of infringement could have constituted a threat and certainly a follow up communication by the claimant to eBay did constitute an unjustified threat. This case is a useful reminder of the complex rules of making threats and how it is important to be sure of your rights before making contact with any potential infringer.

Legislative reform

The new Bill seeks to provide a consistent set of rules across each intellectual property right and to reconcile the inherent tension with the Civil Procedure Rules. The Civil Procedure Rules encourage parties to set out their case at an early stage, with the aim of avoiding litigation. But the current threat provisions discourage parties from setting out allegations in detail at an early stage. This is in case it could be considered a threat and therefore actionable in its own right. This tension does make it difficult to judge what can and cannot be said in pre-action correspondence. 

Most importantly, the Bill aims to facilitate communication between the parties. It introduces a concept of "permitted communications", where if certain conditions are met, IPR owners communicating with secondary infringers (ie customers or retailers) will not be actionable. This is restricted to certain circumstances. For example, it will permit an IPR owner seeking to identify an infringer, but will not permit an IPR owner asking an infringer to cease committing an act. 

Conclusion 

The case and upcoming reform indicates that threats are a challenging and live issue for IPR owners. The Bill is currently at the start of its legislative process, with the Intellectual Property Office having recently concluded a short consultation. However, despite the clarity in some areas, ambiguity remains and IPR owners will need to exercise great care in applying the new provisions. In particular, this applies in relation to the restricted scope on permitted communications.

This publication is intended for general guidance and represents our understanding of the relevant law and practice as at December 2015. Specific advice should be sought for specific cases. For more information see our terms & conditions on www.TLTsolicitors.com

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