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Threatening to improve: long awaited changes for groundless threats provisions

Posted on Mar 12, 2015 by Andy Harris  | Tags: IP, groundless threats, trade marks  | 0 Comments

By Andy Harris

I blogged back in 2012 about the launch of a Law Commission review into ‘groundless threats’ provisions in IP legislation: a rather infamous set of provisions which were often criticised for causing unnecessary angst and confusion to a party  wishing to take action to enforce and protect its IP rights.

Intention

The intention behind the provisions was to prevent the threat of an IP infringement action being used as a commercial and economic weapon when the merits of the claim were questionable.  For example a ‘middleman’ retailer would most likely stop the sale of brand X products on receiving a request to do so by brand Y on threat of trade mark infringement proceedings. This would be the case even if there was little merit in the allegation being made.  The retailer would not want to risk being sued, particularly if the company making the threat was a larger entity with deeper pockets.

Issues

However the provisions in the various pieces of IP legislation have proved problematic in practice. A major concern was that they had rather flipped the problem, and instead of parties making infringement claims when they shouldn’t, you now had situations of parties not making infringement claims when they should.  The situation was not helped by the language of the provisions themselves which differed between IP rights and was not in the clearest language, and by the fact that solicitors sending IP infringement claim letters could themselves be subject to accusations of making groundless threats.

This led to a the rather ridiculous situation of solicitors, acting for clients with perfectly arguable cases of trade mark infringement, sending out letters which danced around actually making a direct allegation of trade mark infringement. Instead the focus would be on passing off arguments but include sufficient oblique references to registered trade marks to enable the recipient’s legal advisor to understand what was going on.

New reforms

The Commission supported the view that the protection against groundless threats should remain for the different categories of IP, but made a number of recommendations. The Government last month announced a number of new reforms in response to the Commission’s report which are to be introduced, being:

  • making sure that the threats provisions are much clearer;
  • making it easier for parties to make good faith attempts to settle an IP infringement dispute before litigation; and
  • stopping legal advisers from being subject to groundless threat claims

These reforms are long overdue but welcome nonetheless.  In particular the last reform listed above will be a relief to any solicitor involved in contentious IP work.  If your professional view is that your clients IP rights are being infringed then you should be entitled to make that case fully and freely without fear that you were somehow handing any ammunition or initiative to your opponent.

Andy

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