Groundless threat provisions - what are they for?

Having legal provisions dealing with these situations as fairly as possible is extremely challenging as either side could otherwise potentially abuse the system or suffer undue disruption to their business. With a view to addressing this, under UK law, if threats to start infringement proceedings are considered to be 'groundless', a party aggrieved by them may be able to take action against the person making the threats.

Primary acts and actors

Imagine a situation where one person has a patent for a product and thinks that another person infringes the patent. In the UK, the patentee is protected when making threats to start infringement proceedings against the alleged infringer if the threats are in respect of 'primary acts' or if the alleged infringer is a 'primary actor'. For a product, a primary act is either making or importing the product for disposal (and for example, excludes selling, using or storing the product). A primary actor is a person who has made or imported the product for disposal. The rationale is that it is considered legitimate for a patentee to try to stop the manufacture or import of a potentially infringing product, regardless of the infringement claim's merit, with a view to identifying and stopping the source of the alleged infringement. Such discussions are effectively considered as acceptable business-to-business, and in many cases competitor-to-competitor, discussions (albeit in a very aggressive form).

Non-primary acts and groundless threats

On the other hand, it is not considered legitimate for a patentee to unduly threaten someone who is neither an importer nor a manufacturer in relation to non-primary acts, such as selling a product. The aim is to try to prevent a patentee from unduly threatening distributors, resellers or end users and more specifically a competitor's customers (for example in a deliberate attempt to sabotage the competitor's business).

In this case, the threats have to have actual merit and be justifiable or else the patentee is opening themselves to a groundless threats action. Without entering into too much detail, the merit will be assessed, taking into account different aspects, including whether the patent is actually infringed and whether it is valid in this respect. At this stage, it is important to keep in mind that this assessment will ultimately be made by the court such that it can be difficult to predict the outcome. As a result, patentees may simply want to avoid finding themselves in this position in the first place and thus get advice, early on, on how to contact potential infringers in a manner that minimises the risk of being found liable for groundless threats.

Trade mark and design rights

Turning to other types of IP rights, similar provisions are provided for trade marks and designs. However, trade mark or design right holders can currently only rely on the protection for threats made in relation to primary acts and cannot rely on a protection against threats made to primary actors.

IP right holders will however be pleased to know that the law commission has recently reviewed the groundless threat provisions and has recommended that the 'primary actors' protection should be extended to trade mark and design rights.

Comment

While groundless threat provisions provide essential protection, both as an IP right holder or as a third party, they can be challenging to use in a way that is both effective and low-risk.

This is a complex area of law and if you believe that any of these issues are affecting your business, it is important to talk to your IP adviser as early as possible to discuss options available to you, with a view to protecting and minimizing disruption to your business.