Friday, 16 July 2010

Groundless threats

Best Buy Co Inc and another v Worldwide Sales Corporation Espana SL [2010] EWHC 1666 (Ch) is a High Court case in which Mr Justice Floyd considers section 21 of the Trade Marks Act 1994. This gives protection from threats of certain types of infringement actions - the IPKat has more detail if you want it - which I explain to delegates on my courses by saying that it is designed to stop big businesses stopping activities they don't like (which may or may not be trade mark infringements) by threatening small people. So, if the rights owner goes to retailers and threatens to sue if they continue stocking goods made by someone else, and the retailers decide they can't afford a fight even if they are not averse to having one, an action might lie. The retailers could sue, but so too can any person aggrieved by the threats - the manufacturer or importer who suddenly finds no-one prepared to stock his goods being the obvious beneficiary of this provision.
This case is interesting in a number of respects. First, it considers what amounts to a threat, and takes a broad view, as previous cases have done. Here, so long as the threat was broad enough to encompass proceedings in teh UK (whether based on a UK or a Community trade mark) that was enough.
Second, though very much on the facts of the case, the recipient would not have understood the threat to be limited to supplying services, one of the types of infringement excluded from section 21.
Third, though, the letter containing the threat was written in the course of negotiations about a co-existance agreement and was expressly without prejudice. It could not be used in evidence for that reason. This seems a little harsh, but only because it appears that it was only the second communication in the negotiations - the claimants wrote floating the possibility of a co-existance agreement, and this was the defendants' reply. However, the letter did also respond to points made by the claimant, and the judge was not prepared to slice it up and consider only the threatening parts. "Viewed as a whole, and in the context of what preceded it, it was a comprehensive negotiating response to [the claimant's] proposal."
Owners of all manner of intellectual property (except copyright) must take not to make threats without good reason. At least it seems they don't need to worry about what they might say in the course of a settlement negotiation.

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