Do you often send warning letters to people you believe are potential trade mark infringers? Are you unsure of the validity of some of your trade marks? Did you send it without consulting with a Trade Mark Attorney?
If you’ve answered “Yes” to some of the above, it’s entirely possible you may have engaged in a non-permitted “threat of infringement proceedings” under the Intellectual Property (Unjustified Threats) Act 2017. In short, you could be liable for damages should an aggrieved party choose to bring proceedings against you.
The Intellectual Property (Unjustified Threats) Act 2017 (“the Act”) came into force in October 2017 with the aim of striking a fair balance between the rights of IP owners and those of innocent businesses or competitors, often intimidated into compliance through baseless threats.
What is an unjustified threat?
In essence, a communication is an unjustified threat, and therefore not permitted, if the recipient reasonably believes that:
- An IP right exists and;
- That a person intends to bring infringement proceedings in relation to that IP right for an act done in the UK, or intended to be done in the UK.
This prohibition is not limited to traditional “Cease and Desist” letters, but also applies to forms of mass communication, such as group emails, press releases etc. An individual does not need to be named for the threat to be actionable.
The foregoing being said, there are some exceptions.
Exception 1 – Threatening Primary Infringers
A threat is not actionable, i.e. does not carry liability, if the intended recipient is a primary infringer. That is a person or business which commits acts of primary infringement (an example of primary infringement is the manufacturing of counterfeit goods).
The Act also provides an exception from liability if the threat, intended for a primary infringer, also relates to acts of secondary infringement (such as retailing or stocking infringing goods).
Exception 2 – Permitted Communications with Secondary Infringers
The Act does provide that a communication is permitted with secondary infringers (e.g. Retailers) when:
- The communication is made for a permitted purpose and;
- The information that relates to the threat is information that is strictly necessary for that purpose and the person making the communication reasonably believes that information to be true
A “Permitted Purpose” is:
- Giving notice that an IP right exists
- Discovering whether, or by whom, an IP right is being infringed
- Giving notice that a person has a right in or under an IP right.
Defences – Actual infringement or Unidentified Primary Infringer
Naturally, the Act provides a defence for the person who makes the threat if that person can show that the acts in respect to which the proceedings are being threatened constitute (or if done would constitute) an infringement of the registered mark.
Moreover, if the owner of the registered trade mark cannot identify a primary infringer (and has therefore threatened a secondary infringer), it is a defence for that owner to show that he has taken reasonable steps in attempting to identify him and that the recipient of the threat was notified before or at the time of making the threat.
What this means for trade mark owners
Given the very narrow definition of these exceptions and the very subjective nature of the available defence, it is highly unadvisable for businesses or individuals to engage in such communications without the prior counsel of a Trade Mark or Patent Attorney.
It is important to bear in mind that the provisions of the Act allow an aggrieved party to obtain reparations for “damages in respect of any loss sustained […] by reason of the threat”. These losses could be the voluntary removal of goods from retail, their destruction, the surrender of registered IP rights etc.
Link to the full text: Intellectual Property (Unjustified Threats) Act 2017