Our Commercial Disputes Trainee Solicitor, Tod Davies, looks at the upcoming changes to Intellectual Property legislation.

The Intellectual Property (Unjustified Threats) Act 2017 (the “Act”) received Royal Assent on 27 April 2017 and is due to come into force in October this year. The Act will insert new threats provisions into the main intellectual property (“IP”) legislation, covering patents, trademarks and registered designs. The Act will make it easier for parties in an IP dispute to negotiate a settlement and avoid litigation, and provides immunity for solicitors who send infringement warnings on their client’s instruction.

The current position

Under the previous legislation, IP owners, and their lawyers could be sued for making unjustified threats of action relating to trademarks, patents and registered designs. This legal remedy was introduced to prevent IP owners from alleging infringement and threatening legal action without good cause.

The old legislation enabled the threatened party to sue the IP owner and its professional advisers personally – causing practitioners to either reject instructions or more commonly require indemnities from their clients before issuing threats. The previous provisions were thought by many to be unclear and inconsistent, with indemnities not always being secured and often resulting in those less familiar with the provisions being caught out by technical loopholes exploited by those more familiar with the law.

The Law Commission published a report making various recommendations in April 2014, after which they and the Government produced the first draft of the bill in October 2015.

Changes to the law

The Act clarifies a number of the uncertainties associated with the previous legislation. It has introduced a new test to determine whether a communication is a threat of infringement proceedings and most significantly for the legal profession it removes personal liability from professional advisers where the advisers are acting on instructions and who identify their clients in communications.

At last, the law in this area now strikes a balance between the rights of IP owners to properly police and enforce legitimate rights and protecting those who are unfairly targeted by an unjustified threat.