Threats Of IP Infringement And The Amendments To S70 Patents Act

Introduction & Statutory Framework

Lord Justice Bowen observed in Skinner v Shew [1893] that the result of a threat of a patent infringement action was:-

"to paralyse a man in his trade by having an action on a patent suspended before his eyes, without the opportunity of determining the suspense at once and bringing the question raised by his antagonist to a speedy and immediate issue."

Such sentiments had led to the first statutory provision making unjustifiable threats of infringement actionable being incorporated in the Patents, Designs and Trade Marks Act of 1883. The statutory threats regime now covers:-

patents - s70 Patents Act 1977 (as amended by s12 Patents Act 2004)

trade marks - s21 Trade Marks Act 1994

UK unregistered design right - s253 Copyright, Designs and Patents Act 1988

UK registered designs - s26 Registered Designs Act 1949

Community designs (registered and unregistered) - regulation 2 of the Community Design Regulations (SI 2005/2339).

These provisions have a number of common features, discussed in more detail below, but essentially allow a person aggrieved by an unjustified threat of an infringement action to bring an action for an injunction against further threats, for damages caused by the threat and for a declaration that the threat was unjustified. As this suggests, the principle defence available to the threatener is to show that its IP right was in fact infringed so that the threat was justified.

There is no limitation on the form threats can take but they are usually made in letters and particularly in letters before action.

Non-Statutory Causes of Action

There is no apparent reason for the lack of statutory provisions covering copyright, database rights and passing off. However their absence does not mean that these rights can be asserted with impunity. Several common law torts can be, and have been, used to achieve much the same result as the statutory provisions. The main two are:-

malicious falsehood - e.g. Olin v Biorex [1969] FSR 361

economic torts - e.g. Jaybeam v Abru [1975] FSR 334

In this context, malicious falsehood can be equated with slander of title and so the tort be committed by "asserting a claim of right in the knowledge that it was without foundation and thereby causing actual damage"1. In Olin, as well as considering a likelihood of damage sufficient, Mr Justice Graham found that "malice" meant an improper motive - and, as there was no good faith defence, the motive would be improper unless the asserted IP right was valid and infringed.

More difficult in terms of the likely evidential burden involved, but nonetheless available, are the economic torts of interference with another's business or contractual relations with the intention to cause damage thereby. These torts were successfully pleaded (alongside malicious falsehood) in Jaybeam to prevent threats of copyright infringement but failed in Granby2 where the copyright was asserted in good faith with no malice.

Common Elements

Returning to the statutory provisions, including section 70 Patents Act 1977 as amended, they have several common elements. These are:-

"threatens" is an objective test of whether the reasonable reader in the position of the recipient would have read the letter as a threat to bring proceedings3.

"a person aggrieved" is someone whose commercial interests are or are likely to be adversely affected by the threat in a real, as opposed to fanciful or minimal, way4

statements made in genuine without prejudice negotiations (or in...