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Groundless threats for infringement of intellectual property rights

View profile for Christopher Buck
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Groundless threats for infringement of IP rights
To sue or not to sue? What does or doesn’t amount to a threat is judged and decided objectively. It is reviewed on the basis of whether an ordinary person – in the position of the claimant – would interpret the words to amount to a threat to sue.

A threat can be expressed or implied, and made in writing or orally. In some instances, a letter which alone is not threatening may be deemed to amount to a threat when reviewed with the entirety of other correspondence.

Actioning a threat

An action for a threat can be brought by a person other than the person being threatened – it can be anyone who is aggrieved by the threat. As such, this is any party who is commercially interested and whose interests have been effected as a result of the threat – they have suffered a loss, for example. This could be the manufacturer, the importer, the distributer, the buyer or the end user, to name a few.

An action for a threat may be brought against anyone who is liable for making a threat. This liability is not necessarily solely that of the owner of the Intellectual Property (“IP”) right. It may be that a solicitor, in-house legal advisor and/or employer (of the employee who owns the IP right) is also liable. With this in mind, any action can also be brought against them. Liability is not limited to individuals either, a company may be liable in some cases.

Groundless threats

A groundless threat is where a threat is made on an unjustified basis, and often to damage the reputation and/or position of a competitor.

It is a threat which is made on unjustifiable grounds. Such a threat is made where the owner of a registered IP right makes claims of their IP right being infringed by a third party, where there is no actual infringement and/or the registered IP right is invalid or liable to revocation.

An infringement of an IP right may be primary or secondary. A primary act of infringement would be an act such as importing or manufacturing the goods. The secondary act of infringement would be when such goods are provided by a supplier. Particular care should be taken in relation to secondary acts of infringement, as this is where a groundless threat is most likely to be made.

The worry of making an unjustified threat is concerning for many IP right owners. Great care and consideration is required in order to make sure any letter suggesting there has been an infringement – which will potentially result in legal proceedings – is sent in a well-worded manner and on a justified basis.

Reform

A balance is required to be found between legitimate threats being made where an IP right has wrongfully been infringed, and groundless threats where people and businesses require the adequate protection. This balance is required so parties can attempt to resolve matters without going to court where there is a dispute regarding infringement, but also to protect parties from threats that are made somewhat tactically, rather than genuinely.

The Intellectual Property (Unjustified Threats) Bill (“the 2015 Bill”) was published in October 2015. This was with the intent of addressing the problems regarding IP rights and infringement, so all IP rights are subject to the same protection and regime. Further to the 2015 Bill, there is a clear intention to ensure all IP rights are adequately protected and there is clarity regarding what threats can and cannot be justifiably made.

The outcome of the reforms is intended to allow for more consistency regarding different IP rights, and a more balanced approach regarding IP rights owners and competitors.

Previously, there were two key problems hindering a reform. These were:

  • The uncertainty surrounding what a threat is
  • The inconsistency between different IP rights

The 2015 Bill has gone some way to resolving these problems. It has allowed for a clearer understanding of communications, which will not be deemed to amount to a threat. It also strives to ensure parallel provisions are applied regarding the differing IP rights, which will greatly improve upon the previous inconsistency.

Remedies

Where a groundless threat has been made, the following remedies are available to the party who brought the action:

  • A declaration that the threats are unjustifiable
  • An injunction against further threats
  • Damages in relation to any loss caused as a result of the threats

Advice

Before sending cease and desist communications, it is advisable to seek advice in relation to whether such a letter is justified in the circumstances. The wording of any such letter also needs to be very carefully considered and reviewed, so as not to be deemed a groundless threat.

At Franklins, our experienced solicitors can assist you in reviewing both circumstances and documentation in relation to the infringement of an IP right, and advise you on the options available. Any documentation required for the client’s progressing or finalising of a matter can be both drafted and reviewed by the team to make sure it is compliant.

Whether you are contemplating sending a letter regarding potential action due to infringement, or you are the recipient of such a letter, seeking legal advice is highly recommended. Our team can help you in understand your position and produce or review any necessary documentation. Please feel free to contact me by email or call me or my team on 01908 660966.

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