Sunday, 7 August 2011

Law Commission to consider "groundless threats" actions

The right to sue if you're damaged by unjustified threats of infringement proceedings is an important safeguard against abuse, when intellectual property rights are not always as solid as they might appear. Originally applicable to patents, similar provisions have been included in trade marks and designs laws too. And a good thing it is: if someone wants to assert their rights against another, they must expose themselves to the possibility of a counterclaim for invalidity. Many trade marks are invalidly registered (and this was the case especially immediately after the 1994 Act came into operation - remember the Treat case?) and probably even more registered designs, because it has always been impossible to gauge whether a design is novel.

When you get to unregistered design rights - whether the domestic or the Community variety - the need for protection becomes even greater, notwithstanding that the important area always seemed to be registered rights. I was incensed on behalf of a client a few years ago: he received a threat of proceedings for infringement of Community unregistered design right, which I am convinced is a form of intellectual property only of interest to those who have no other straws at which to grasp. My client told me the design was a "retro" one that dated back to the seventies - so any protection had long since expired. The lawyer on the other side cannot have offered the least little bit of counsel to their client. To my disappointment my client preferred not to sue for unjustified threats, especially as I thought the lawyers ought to be required to explain themselves - and to pay up.

The law, you see, makes the lawyers liable for groundless threats as well as their clients. It's potentially a powerful weapon. But although it doesn't stop you making threats, period, cautious lawyers tend to avoid making any threats for fear that they might turn out to be groundless.

The Law Commission has just announced its 11th programme, which will run until 2015, and unjustified threats actions in trade marks and designs cases are to be reviewed (starting in April next year). It won't look at the patents provisions, because they were reformed only in 2004 and therefore might provide an indication of the direction reform might take. The nub of the problem is that the possibility that you might become liable for making unjustified threats (or landing your client in court as a defendant when they thought they were going to be the claimant) might encourage you to sue - exactly the opposite of what the Civil Procedure Rules were designed to achieve. How to write a non-threatening protocol letter? This is indeed why there is no protocol for IP litigation.

It seems to me that the right thing to do is consider carefully, and set out in the legislation, when a threat is unjustified. That should give the lawyers enough comfort to be able to write letters before action as they would like to.

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