You may be surprised to read that if a threat is made – to an individual, for example, or a company – regarding infringement of intellectual property (IP) rights (such as trademarks, design rights or patents) you can, unless there is a statutory exemption or defence, be liable if the threat is considered unjustified. To be clear, a threat means just that, a threat - it could be triggered by a letter or communication containing an allegation of infringement of an IP right and that action would be taken accordingly. As a consequence, the recipient of that threat could bring a claim for an injunction and/or damages as well as seek the costs of doing so.
The Intellectual Property (Unjustified Threats) Act 2017 was passed into law earlier this year and came into force on 1 October 2017. It applies to “threats” made on or after that date. In short, threats can still be made concerning “primary acts of infringement” such as manufacturing or importing of an infringing product. The Act is designed to protect against unjustified threats concerning “secondary acts”, such as a shopkeeper who might inadvertently sell another party’s infringing product.
The test under the Act is whether a “reasonable person” understands that an IP right exists and that someone intends to bring proceedings for an alleged infringement. There are various “permitted communications” and defences available under the Act – the most obvious being that the threat was justified because the act complained of did constitute an infringement.
However, before making any threat, even if you are confident it would be justified, you should seek legal advice. This area of law can be a minefield. What may start out as an intention only to fire a “shot across the bow” of someone who you might suspect of infringing an IP right could end up with the owner of that right on the receiving end of Court proceedings for making an unjustified threat.
Intellectual property can often be a business’s most valuable asset. A business’ identity, product and place in the market can be wrapped up in a single mark or right and owners should take steps to protect them. However the Act does not permit threats to be fired off “left right and centre”. Any threat should be considered and targeted appropriately, weighing up the risks of doing so should it backfire.
For advice in relation to topics in this article contact James Carpenter, Head of Commercial Litigation and Dispute Resolution, on tel. 01582 731161 or by email firstname.lastname@example.org.