UK government to boost protection against groundless IP threats

The British government has pledged to better protect businesses against groundless threats of intellectual property infringement, paving the way for new legislation.

In an official response yesterday (February 26) to a Law Commission report, the government said it will retain the current protection surrounding patents, trademarks, and registered and unregistered designs, but will introduce several new reforms.

These include making it easier for parties to make good faith attempts to settle IP infringement disputes before litigation and stopping legal advisers from facing threats when the dispute is between their clients.

IP minister Baroness Neville-Rolfe said: “Our reforms will make sure the law properly protects businesses from being threatened unfairly, but also allows innovative businesses to resolve disputes legitimately and enforce their rights.”

The government response was compiled by the Department for Business, Innovation and Skills (BIS) and the UK Intellectual Property Office (IPO), which in 2012 asked the commission to review the law in this area because of concerns that it is too complex and does not work as intended.

In April 2014, the commission published its report before the government provided an interim response in October. BIS and the IPO have now submitted their full response.

Current legislation dictates that a threat is groundless when there has been no infringement or where the asserted right is invalid. Remedies available to affected parties include an injunction and damages.

The commission had said that the party making the threat should inform the threatened party either before or at the time of making the threat of the “reasonable endeavours used” to find the alleged infringer.

In its response, the government agreed but said it has some reservations about whether “reasonable endeavours” is a test that is objectively clearer, fairer and better understood than the existing “best endeavours” requirement in patent law.

The commission’s report had also recommended that a lawyer or a patent or trademark attorney should not be liable for making threats when they have acted on instructions from a client.

Although the government agreed, it said the burden of proof should fall on the legal representative to show that “they were acting on instructions and so [are] exempt from the threats provisions”.

Alastair Shaw, of counsel at law firm Hogan Lovells, said that currently in trademark and design cases there is often a certain amount of “shadow boxing” before the full extent of the alleged wrongdoing becomes clear to the likely defendant, by which time positions on both sides can become entrenched.

“There may be some doubts about whether the position will be improved in practice for legal representatives if the government follows through on its proposal that they must show that they were acting on instructions to exempt them from liability for threats.

“But, overall, the government's responses should be seen as a very positive move. Of course, the devil will be in the detail of the language used when the draft legislation published,” he said.