Status: We started work on this project in April 2012. In a consultation that opened on 17 April 2013 the Law Commission seeks views on reform of the law relating to groundless threats of litigation over patents, trade marks and design rights. The consultation period ends on 17 July 2013. A report with recommendations to Government (but no draft Bill) will be published in spring 2014
Intellectual property rights are a vital foundation of economic growth. Patents, trade marks and design rights ensure that innovation is rewarded and encouraged. If misused, however, they can stifle new ideas and inventions. Infringement litigation can be disruptive and expensive. The mere threat of proceedings is capable of causing significant commercial damage to a business by driving customers away.
The law provides a remedy in the shape of the threats provisions. Where a threat is made without a genuine intention to litigate; where there has been no infringement or where the right is invalid the threat is said to be groundless (or unjustified). Any person aggrieved by a groundless threat may apply to court for an injunction, declaration or damages.
A consultation paper, summary and impact assessment, as well as a questionnaire and instructions on how to respond, are available on the consultation page.
Groundless threats provisions were introduced in the nineteenth century when disputes were about steam engine patents. The provisions must now function in a world of global battles over information technology. There are problems with the current law. The provisions do not distinguish well between the trade source of the infringement and others with a lesser connection, such as customers. Groundless threats actions can also be used tactically to drive a wedge between legal advisers and their clients or to drive cases to court rather than encourage negotiations over settlement.
The project, which does not include copyright, considers how the law should be reformed. The Commission is consulting on two approaches to reform. The first is to build on the reforms made to patent law in 2004 and to extend these to the other rights. We also propose that legal advisers should be protected from liability for groundless threats.
The second approach is to treat groundless threats as a form of unfair competition and to introduce a new and broader cause of action based on the Paris Convention. Although this is not a joint project, during the course of this project we have consulted with the Scottish Law Commission on specifically Scottish elements.