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New UK law combats unjustified threats

December 19, 2017

The Act was passed into law in the United Kingdom and took effect from the first of October.

A new Act concerning unjustified IP threats has become law in the United Kingdom, as of the beginning of October this year. It supersedes previous legislation contained within Section 21 of the Trademarks Act 1994, which was judged inconsistent and confusing, in regard to what is considered an unjustified threat communication, reports Lexology.

The Act’s purpose is to provide a protective measure against those unjustified threats against retailers, distributors, or other businesses not making or importing the goods alleged to be infringing registered trademark claims; the protection is in place to prevent these threats from damaging or destroying the legitimate businesses of innocent traders. Until now, whilst provisions for unjustified threats have been enshrined in legislation on designs, patents, and copyright, they have been inconsistent with each other. The new Act, however, covers all registered trademark rights extending to the UK, providing a more uniform regime.

It also includes a broadening of the definition of a threat, now including threats to bring action outside of the UK for an act done in the UK. The Act also carries over from the previous legislation to two-fold test as to whether a communication contains a threat of infringement proceedings. Simply notifying a party of a registered trademark’s existence is not considered an actionable threat, and neither therefore is writing to a secondary party – such as a retailer – enquiring as to the source of goods so that action may be taken against the primary party – i.e. the manufacturer or importer. Similarly, the new legislation provides security for IP rights holders in communication with possibly infringing parties, keeping them from incurring liability for an unjustified threat by way of making “permitted communication.”

The new Act also legislates for those making threats that are judged to be justified, on account of an actual infringement where the threat was sent to a secondary party as the primary party could not be identified, after reasonable steps were taken by the rights holder. A new provision also protects professionals against claims of an unjustified threat, when they are acting on the instructions of a client; this is a change from the previous legislation, where recipients of unjustified threats could sue not only the threatening party, but also the professional counsel or attorney making the claim, which often led to a ‘sue first, talk later’ strategy from those making the threats, in order to avoid a claim against its advisor which could sour relations between the professional and their client.

 

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