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Groundless threats of IP infringement - a threat to common sense?

Posted on Jul 17, 2012 by Andy Harris  | 0 Comments

I recently had to explain to a client why he needed to be very careful about making a claim of registered trade mark infringement in case it allowed his opponent to sue him for making a  ‘groundless threat’ even though I didn’t think his case was remotely ‘groundless’.   While that sounds a rather logic-free piece of advice it is unfortunately the result of how the application of groundless threat provisions has evolved.  Hopefully a current Law Commission review may lead  to an overhaul of this problematic area.

Groundless threats provisions in the UK apply in relation to patents, designs and trade marks.  However it is in relation to trade marks where the legislation has arguably  become the most detached from its original purpose – which was broadly to protect the middleman from commercial damage arising from casual or dishonest infringement claims.  For example, a sports retailer being told by company A that in selling (rival) company B’s shoes it was infringing company A’s trade mark, would be quite likely to stop selling company B shoes in order to avoid being sued. This might happen even if the allegation of trade mark infringement was in reality weak or even without foundation. The groundless threats provisions of the Trade Marks Act should prevent this scenario – as the retailer would be able to sue company A for making a groundless threat against it.

However the provision has had wider effect, largely due to the the broad wording used, which includes the possibility of solicitors who make trade mark infringement claims on behalf of their clients being liable for making groundless threats.   The result has been a greater reluctance on the part of  trade mark holders (and those advising them) to  come out with a clear allegation of registered  trade mark infringement for fear of unwittingly providing their opponent with ammunition to fight back.   Although the provision was intended to assist the middleman rather than than the primary infringer it has not always had this effect. 

Complicating matters further is the fact that trade mark infringement cases (like most IP infringement disputes) are seldom clear cut.   A claimant will often have to demonstrate a ‘likelihood of confusion’ caused by the alleged infringement - a concept that the courts break down and analyse in quite exhaustive detail, and which as a result does not lend itself to simple application. An infringement claim which at first blush appears quite clear cut can often end up anything but.  As a result it can be extremely difficult to say with any certainty whether a trade mark is being infringed or not. When you add the threat of being sued for making a ‘groundless threat’ into the mix you can see why there is such concern or in some cases paranoia about claiming infringement.

Hopefully the Law Commission will make recommendations on how this important protection can be implemented in a more sensible and commercial fashion. The current situation does not help trade mark owners or those advising them.

Andy Harris

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