Reforms to the UK legislation relating to Unjustified Threats actions

The Intellectual Property (Unjustified Threats) Bill received Royal assent on 27 April 2017 and the Intellectual Property (Unjustified Threats) Act 2017 will come into force in October 2017.

A discussion of the Bill was reported here. The Bill has been accepted without amendment.

This new law harmonises the UK law relating to unjustified threats relating to patents, trade marks and registered and unregistered designs. The new provisions seek to provide a better balance between the interests of rights holders for an effective and robust system to enforce their rights and the interests of genuine traders to be able to continue with their lawful activities and not to have these disrupted by groundless threats of infringement proceedings. Many of the inconsistencies of the current law have been addressed and it is hoped the reform will encourage parties to engage in settlement discussions by eliciting information and discussing potentially infringing activities.

In the past, the fear of a threats action discouraged parties from engaging in discussions before initiating litigation, so the new law should result in savings to businesses by reducing litigation and the need for pre-action advice.

Under the new law, threats of infringement proceedings may not be actionable if these are made to a primary infringer even in relation to secondary acts of infringement, or if made to a secondary infringer but provided these are made in permitted communication. Further, legal advisors and practitioners acting under instructions from their client will no longer be made liable in a threats action, provided they have identified the client on whose instructions they are acting.

While the new legislation is a welcome improvement over the existing law, how effective it will be will depend on future interpretation, in particular, as to the scope of permitted communications and actionable and non-actionable threats of infringement proceedings.

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