New Laws on Unjustified Threats of IP Infringement Enacted in UK

The Intellectual Property (Unjustified Threats) Act 2017 received Royal Assent on 27 April, although most of the provisions will not take effect until further regulations are introduced by the UK government.

As well as clarifying the rights of businesses to go about their operations without being pressured into paying to settle unjustified claims of IP infringement by 'patent trolls' and other unscrupulous rights holders, the new Act can also help rights holders to legitimately enforce their IP rights where infringement is suspected, said IP disputes expert David Woods of Pinsent Masons, the law firm behind Out-Law.com.

"The new Act is an important piece of legislation that seeks to balance the right of IP owners to put companies on notice that they are suspected of infringing their IP rights with the right of businesses to be able to operate without being the subject of unjustified threats of court action if demands for payment in relation to spurious claims of infringement go unmet," Woods said.

"The Act provides welcome statutory guidance by defining what communications constitute 'threats of infringement proceedings', as well as where those threats will be considered to qualify as threats that recipients can raise legal action against for each of patents, trade marks and designs," he said.

"In addition, the Act sets out the characteristics of ‘permitted communications’, and offers rights holders a route to defend claims of unjustified threats in certain circumstances, including where infringement can be demonstrated. Where unjustified threats of infringement are found, available remedies include injunctions barring continued threats and potentially an award of damages for loss suffered as a result of such threats being made," Woods said.

"This is a complicated area of law that is easy to fall foul of so rights holders should take advice when seeking to communicate with businesses they suspect of infringing their IP rights," he said.

Until new regulations are passed to bring the majority of the provisions in the new Act into force, existing laws on 'groundless threats' will continue to apply.

Woods said that the current laws on groundless threats were developed over a period of time and apply slightly differently depending on whether the IP right in question is a patent, trade mark or design right. The new Act, when it takes full effect, will help to standardise these rules and simplify further complications that apply at the moment which relate to whether threats of legal action are made to suspected primary or secondary infringers, he said.