Legal Update: Brand Infringement and Unjustified Threats

In October 2017, the new Intellectual Property (Unjustified Threats) Act 2017 came into force. The purpose of the Act was to amend the law governing unjustified threats to commence legal proceedings for infringement of intellectual property rights. This includes infringement of patents, registered trademarks, rights in registered designs, design right or Community designs. For the purposes of this article, we will focus on the effect of the Act in respect of trademark infringements.

The new Act provides clarification on what constitutes an ‘unjustified threat’ for the purposes of the Trade Marks Act 1994. In short, the new Act creates a clear regime, which can be used to determine whether an unjustified threat has been made.

There are a number of elements to the framework which we will briefly consider:
1. When does a communication contain a “threat of infringement proceedings”?

There is a “threat of infringement proceedings” where a communication is made that would allow a reasonable person to understand that;

  • A registered trade mark exists,
  • A person intends to bring proceedings for infringement of the registered trade mark (the infringement being an act done in the UK, or an act which if done would be in the UK)

A threat can also be considered to be made in the case of a communication directed to the public.

2. Is the threat actionable?

The new Act clarifies that a threat is actionable by any person aggrieved by the threat. In practice, this could mean that any person with an interest in the subject matter of the threat may be able to bring proceedings.

The new Act specifies a number of circumstances in which a threat would not be actionable, to remove any ambiguity which may have been in the earlier Act. These are detailed in full in the text of the new Act, which then also goes on to state that “…an express threat is not actionable if it is contained in a permitted communication.” This brings us to the third element of the new legislation.

3. What is a permitted communication/permitted purpose?

A communication is ‘permitted’, and will not constitute an unjustified threat if it is made for a permitted purpose, all of the information relating to the threat is necessary for that purpose, and the person making the communication reasonably believes it is true. 

The Act goes on to clearly set out what constitutes a ‘permitted purpose’, which includes; giving notice that a registered trade mark exists, seeking to determine whether a trade mark has been infringed and whom by, and giving notice that a person has a right in or under a registered trade mark.

Clarification is also provided on what would not be treated as a ‘permitted purpose’, to further remove any possible ambiguity.

4. Remedies/Defences

The Act sets out what action may be taken if it is found that an unjustified threat had indeed been made. This includes damages in respect of any loss sustained by the aggrieved party. 

There are also a number of defences to any action prescribed by the Act. The defences include the person who made the threat demonstrating that the actions of the other party, which gave them cause to threaten proceedings, did, or would, constitute an infringement of the registered trade mark. 

Key Takeaways for businesses
The new Act has not revolutionised the existing legislation on the topic of trade marks. It has, however, added much needed clarity as to what does and does not constitute a groundless or unjustified threat. 

The primary takeaway is that no threats of infringement proceedings should be made unless you are entirely satisfied that you have legal standing to do so. In order to be sure of this point, it is highly advisable to seek legal counsel before any communication is made in respect of any suspected or actual infringement.

Any letter threatening action should be carefully drafted to ensure that you do not breach the legislation and leave yourself open to legal action.

If you require any further advice on this, or any other Intellectual Property matters, please contact our dedicated team who would be happy to assist.

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