UK Law Commission Report on IP Infringement Threats

The Law Commission in the UK has published its final recommendations to the European Parliament on reform relating to groundless threats of infringement of patents, trade marks and rights in designs.

Threats to sue for infringement of IP rights can be misused to damage a trade rival. Under UK law (and Irish law), a statutory remedy exists for groundless threats made in respect of patents, trade marks and registered designs. An exception to this remedy currently exists for threats of patent infringement made to those who have committed primary acts of infringement. The exception covers the primary acts of infringement of making or importing a product for disposal or of using a process. In Ireland, the position is broadly similar, Section 53 of the Patents Act 1992, provides for penalties relating to groundless threats for infringement of a patent, and a similar exception in Section 53(3).

The Commission recommends extending this exception to trade marks and designs and expanding it to relate to those who are shown to have intended to commit such acts. This will allow rights holders to take pre-emptive action to prevent such infringement (which is not currently permitted). Extending the exception to the other rights would align the provisions relating to these three sets of registrable IP rights and would help to smooth out the enforcement process, particularly where actions cover a combination of these rights.

The Commission also recommends further extending the exception of liability for threats of infringement so that there should be no liability for threats made to secondary infringers as long as there is a legitimate commercial incentive to make the threat, and reasonable grounds for believing that the information provided to the alleged infringer is true. Guidance as to what may be said to a suspected infringer should be provided by legislation, according to the Commission’s report.

The Commission recommends that it should no longer be possible to avoid liability for making threats by showing that the person making the threat did not know, or had no reason to suspect, that the patent was invalid.

The Commission recommends that lawyers and patent and trade mark attorneys should have no liability for making threats where they have acted in their professional capacity and on instructions from their clients.

Given the findings of the UK Commission it would be very useful to have the position revised in Ireland. The current liability for both rights holders and legal professionals for groundless threats is quite broad and the recommendations of the Commission, if enforced, could help limit this.