Tricky IP threats law reform in the UK (and beyond)

18 minute read
02 November 2015

In the UK, the law restrains the making of unjustified threats of legal proceedings for infringement of intellectual property (IP) rights. However, at present what can and cannot be said without falling foul of the threats provisions, and to whom, depends upon the type of intellectual property right involved. There has long been a case for harmonisation of the law and now a draft Bill has been published with the aim of doing so.

After years of consultation and review, the Law Commission made recommendations for reform of the law in 2014. The Government responded in February 2015, and invited the Law Commission to draft a bill.The Intellectual Property (Unjustified Threats) Bill was published in October 2015. The Bill is accompanied by a lengthy commentary. The UK Intellectual Property Office (UKIPO) invites comments on the draft Bill by 13 November 2015.

The proposals contained in the draft Bill concern threats of infringement proceedings made in respect of the following types of IP right: UK patents, UK designations of European patents, registered UK trade marks and Community trade marks, UK registered designs, Community registered designs, and unregistered UK and Community designs. When Unitary Patents (UPs) and the Unified Patent Court (UPC) enter into force in the UK, UPs and EP(UK)s within the exclusive jurisdiction of the UPC would also be subject to the UK threats regime.

All the types of right referred to in the paragraph above are referred to below as "IP rights". Other types of right, which are not listed above (such as copyright), are not the subject of the UK threats regime and are not referred to when the expression "IP rights" is used below.

The definition of a threat

The proposal is that for each IP right, the structure and wording of the legislative threats provisions be aligned, to provide (in short) that:

A communication contains a "threat of infringement proceedings" if a reasonable person in the position of the recipient would understand from the communication that a right (or published application) exists, and a person intends to bring proceedings (in a court in the UK or elsewhere) against another person for infringement of the right by an act done (or proposed to be done) in the UK.

The proposals therefore change the definition of a 'threat'.

At present, UK threats law addresses a threat to sue in a UK court. By changing the test to require instead that the location of the alleged act or threatened act complained of is the UK, UPs and EP(UK)s within the exclusive jurisdiction of the UPC would fall within the regime. The Law Commission's view is that the new test would still adhere to the most persuasive factors for the Court of Appeal in its Best Buy decision, these being concerned with the location of the acts which were, or would be, infringing.

A threat of infringement proceedings falling within the above definition would be actionable by any person 'aggrieved' by the threat, unless it fell within a "not actionable" exception or was contained in a "permitted communication". Pursuant to Brain v Ingledew [1997] FSR 511, a person is "aggrieved" if they can show that their commercial interests are likely to be affected in a real, as opposed to a fanciful, way. A person aggrieved need not be the recipient of the threat.

Legal advisers across Europe and beyond should note that, provided the alleged act of infringement occurs in the UK, the UK threats regime could apply irrespective of the location of the sender or receiver of the communication. This might happen, for example, where a German trade mark attorney, based in Munich, wrote to the Bulgarian headquarters of an alleged infringer in relation to pan-European acts including the import or sale of a product in the UK.

Exceptions from actionable threats

The Law Commission proposes that the current exception for threats made in respect of 'primary' acts of infringement concerning patents, trade marks and designs should remain. (In the context of trade marks, the existing exception would also be extended to cover 'causing another to apply a sign'). In addition, the Law Commission proposes that the current exception in patent cases for threats made to a primary actor, in respect of 'secondary' acts of infringement (e.g. selling), should be extended to trade marks and designs.

In order to achieve this, the draft Bill proposes "not actionable" threats of infringement be defined (in short) as being:  

where the infringement is alleged to consist (for the relevant IP right) of

  • making or importing a (patented) product
  • using a (patented) process
  • applying/causing another to apply a sign to goods/their packaging or importing such for disposal (trade marks)
  • supplying services under a sign (trade marks)
  • making or importing  a (design protected) product or article for disposal.

(Note that these are the 'primary' acts of infringement for the types of IP right indicated).

The draft Bill proposes that "not actionable" threats of infringement also covers scenarios where, as a matter of fact, the recipient of the threat has committed a primary act of infringement (or intends to do so): then a threat in respect of secondary acts of infringement would not be actionable. This would extend the current exception in patent cases, for threats made to a primary actor in respect of 'secondary' acts of infringement (e.g. selling), to trade marks and designs. 

The "permitted communications" exception is intended to provide a limited further 'safe harbour' to right holders who communicate solely for a "permitted purpose" with someone who might otherwise be entitled to bring a threats action.

In the UK, IP threats law generally discourages IP right holders from communicating with an actual or potential secondary infringer. However, recognising that there are occasions when such communication is necessary or could even resolve a dispute, the proposed "permitted communications" exception offers some protection to right holders who choose to communicate with persons (for example retailers and customers) who are not themselves 'primary' infringers. It is also intended to permit disputing parties to comply more easily with the obligations placed upon them by the Civil Procedure Rules (CPR) to exchange information in order to avoid litigation, without right holders becoming liable for threats.

With this aim, a communication containing a threat of infringement proceedings is a "permitted communication" if (in short):

  1. the communication  is made solely for a permitted purpose; and
  2. all of the information that relates to the threat is information (i) that is necessary for that purpose and (ii) which the person making the communication reasonably believes to be true.

So what is a "permitted purpose"? The definition provided is expressed as not being exclusive. The Law Commission explains that the court's power to add to the list of permitted purposes is to ensure that the law is not overly prescriptive and inflexible and that it can develop over time to better reflect surrounding circumstances as they change. So here lies an area ripe for future dispute if the draft Bill is enacted in its present form. Some guidance is provided in the draft Bill.

In short, each of the following is proposed to be a "permitted purpose":

  1. giving notice that an IP right exists;
  2. discovering whether, or by whom, an IP right has been infringed by a 'primary' act;
  3. giving notice that a person has a right in or under an IP right, where another person's awareness of the right is relevant to any proceedings which may be brought in respect of the IP right.

Unusually, the draft bill lists 'examples' of information that 'may' be regarded as necessary for a permitted purpose. The examples given are:

  1. a statement that an IP right exists and is in force or that an application for an IP right has been made;
  2. details of the IP right which are accurate in all material respects and not misleading in any material respect;
  3. a statement/notice that a person has a right under that right, where another person's awareness of that is relevant to any proceedings which may be brought in respect of the (IP) right;
  4. information enabling the identification of the products, processes, packaging or services which are alleged to infringe.

The draft Bill also provides that the following requests may not be treated as a "permitted purpose":

  1. requesting a person to cease -
    • doing, for commercial purposes, anything in relation to a product or process
    • using, in the course of trade, a sign in relation to goods or services
    • doing, for commercial purposes, anything in relation to a product in which a design is incorporated or to which it is applied, or anything in relation to an article made to a design
  2. requesting a person to deliver up or destroy such product/goods/product or article;
  3. requesting a person to give an undertaking relating to a product or process/goods or services/product or article.

Despite an expressed aim of the proposals being to permit disputing parties to comply more easily with the CPR, there is still a clear strain between the provisions of the CPR which encourage the settlement of disputes before proceedings are issued, and the UK law prohibiting threats. For example, at what point would a request that, as a part of a compromise, a potential secondary infringer refrain from sale of an allegedly infringing or counterfeit product not fall foul of the threats regime?

IP right holders might yet consider it necessary to issue proceedings (and to pay value-based court fees) in order to act first in the event that negotiations do not result in settlement and a threats claim appears likely.

Remedies for breach of the threats provisions

The proposals would entail no change to the remedies available for breach of the threats provisions, i.e. (a) a declaration that the threat is unjustified; (b) an injunction against continuance of the threat; (c) damages in respect of loss sustained by the aggrieved person by reason of the threat.


For all the IP rights concerned, the current defence of justification would continue. In other words, it would be a defence for the person who made the threat to show that the act in respect of which proceedings were threatened constitutes (or if done would constitute) infringement of the (valid) IP right.

Another defence currently available for patents is that the person who made the threat used their best endeavours, without success, to discover the identity of the person who has done a 'primary' act, and that they notified the recipient, before or at the time of making the threat, of the endeavours used. It is proposed that the defence be extended to cover the other IP rights, and also that the test be softened from the current requirement for "best endeavours" to "all reasonable steps". The Law Commission explains that, in cases where the primary infringer cannot be found, in order to prevent or limit commercial damage caused by the infringement, the only course of action left open to the right holder might be to threaten a secondary actor. 

Protection for professional advisers

Under the current law, anyone can make a 'threat', not just the holder of an IP right. A legal adviser may therefore be sued in their own right for making threats, even when acting on their client's instructions.

The Law Commission considers that actions against professional advisers represent a "significant and potentially damaging misuse of the current threats provisions". It therefore proposes the introduction of protection against liability for professional advisers, where they are acting in a professional capacity and on a client's instructions. The proposed wording is as follows:

"1. Proceedings in respect of an actionable threat also may not be brought against a professional adviser (or any person vicariously liable for the actions of that professional adviser) if the conditions in subsection (3) are met.

2. In this section "professional adviser" means a person who, in relation to the making of the communication containing the threat -

  1. is acting in a professional capacity in providing legal services or the services of a trade mark attorney or a patent attorney; and
  2. is regulated in the provision of legal services, or the services of a trade mark attorney or a patent attorney, by one or more regulatory bodies (whether through membership of a regulatory body, the issue of a licence to practice or any other means).

The conditions are that -

  1. in making the communication the professional adviser is acting on the instructions of another person; and
  2. when the communication is made the professional adviser identifies the person on whose instructions the adviser is acting."

On the burden of proof, the Law Commission notes that all the adviser would need to show is that they were instructed to make the communication i.e. to send it. They would not need to show that they were instructed to make a threat.

The Law Commission's rationale for limiting the exception to regulated advisers is that any misconduct by a regulated adviser, when acting for a client, can be dealt with by their professional body. Advisers who chose not to join a regulatory body would not be able to benefit from the protection afforded to regulated advisers.

The proposed protection for legal advisers would not, however, be limited to UK or EU advisers. On this, the Law Commission's view is that " an increasingly global market the definition must capture the many varieties of foreign and domestic IP practitioner who may risk liability for threats in relation to acts done in the UK".


Reach of UK threats law beyond UK shores

International and UK-based IP right holders should take note of the proposed shape of the Law Commission's October 2015 draft Intellectual Property (Unjustified Threats) Bill. If enacted in its current form, a cause of action may be founded in the UK by the communication of a threat to bring infringement proceedings concerning an act of infringement in the UK, irrespective of the country in which the communication was made or received, or in which proceedings are proposed to be commenced.

Procedural questions in relation to the UPC

The Law Commission's proposal also raises questions about the inter-relationship between the UK threats provisions and the operation of the UPC system. Could a national court in the UK hear an action for threats founded upon a UP, or an EP(UK) that was within the exclusive jurisdiction of the UPC, when the IP right holder relied upon a defence of justification? The justification defence would entail consideration of whether the right was infringed, and possibly also of whether it was valid, but these matters would be within the exclusive competence of the UPC.

The Law Commission anticipates that in such circumstances the English threats proceedings would need to be stayed pending the resolution of questions of infringement and validity by the UPC.

The English courts have tended to be reluctant to stay proceedings pending the resolution of lengthy procedures in European institutions - would this have to change for the UPC? This would appear to be yet another open question that would be introduced by the coming into force of the UP and UPC in 2017 or later.

The legislative process and your chance to comment

In accordance with the proposals, key legislation (such as the Patents Act 1977) would be amended. In order to effect such amendments the draft Bill is repetitive and awkward to peruse.

The reader of the draft Bill is also assumed, in places, to have background understanding of existing case law which the Law Commission considers will impact the interpretation of the legislation. Subtleties in the provisions mean that particular care will still be needed when drafting and making any communication regarding the existence and possible infringement of an IP right.

The UK Intellectual Property Office has published a Discussion paper on proposed reform to the law relating to unjustified threats on intellectual property rights. It notes that the government is considering whether the special procedure for uncontroversial Law Commission bills should be used for the passage of the Intellectual Property (Unjustified Threats) Bill and invites stakeholder views on this and broader questions regarding the proposals, by 13 November 2015.

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