Unjustified patent infringement threats
20 October 2016
Unjustified threats remain an odd quirk of intellectual property law in the UK for patents, trade marks and designs. The underlying reasoning behind Section 70 Patents Act 1977 (PA '77) is to prevent what amounts to mere 'sabre-rattling' by a patent proprietor against commercial entities and end users who may be unaware of the potentially infringing nature of their goods.
The provision remains to provide a clear link between law and commerce, and also an understanding that proceedings are costly and would be better avoided.
This appeal arose from an Intellectual Property Enterprise Court (IPEC) judgment relating to cases where a threat to sue for infringement is made on the basis of a pending patent application, and in particular concerned the questions:
- Can a threat for infringing a patent on the basis of a pending application be justified?
- If so, when should a trial (where such justification could be considered) be heard?
The defendants made several threats (and it was agreed that these were threats) which made specific references to starting proceedings on the basis of a patent.
Section 70(2A) PA '77 provides that a threat can be justified if the defendant proves that "the acts in respect of which proceedings were threatened constitute or, if done, would constitute an infringement of a patent". Thus, a literal interpretation should lead to a conclusion that a threat based on an application alone must prima facie be unjustifiable as there is no patent to infringe.
However, Section 69(1) PA '77 allows patent proprietors to sue retroactively for acts infringing of the claims as published, as long as the acts would also infringe the claims as granted.
1. The threat can be justified
One previous decision (Brain v Ingledew Brown Bennison & Garrett  FSR 552) related to this matter, where Jacob J ruled that it was indeed possible to justify a threat based on an application, as Section 69(1) PA '77 effectively gives a contingent right to sue. The claimants in the present case attempted to distinguish from Brain, stating that the threat issued by the defendants here referred to imminent proceedings for infringement of a granted patent [see note 1 below].
The defendants' argued that Section 70(2A) PA '77 did not require that the threat be justified; the wording only required that the acts would constitute infringement of a patent (it was also pointed out the wording did not even require that the same patent was infringed, and that it allowed for justification of a threat if it was found that the acts would infringe a different patent).
Arnold J, while agreeing that the cases can be distinguished, sided with the defendants, stating that an object of the provision was not to examine the manner in which the threat was made, or whether the author was careful enough to consider what rights were being infringed.
He also stated that the court should not be quick to reach a construction which would effectively make entire classes of communications as unlawful under Section 70 PA '77, as this would necessarily limit commercial dialogue and negotiation, which should be preferred with infringement proceedings being saved as a last resort.
2. The judge was right to use his discretion to adjourn the trial
Following Brain v Ingledew Brown Bennison & Garrett (No. 2)  FSR 271, it was accepted that justification of the threat would rely on the patent being granted at the time of trial; the fact that this might not happen was the risk the threatening party was taking. However, in this case, the date the trial was set for was the first available. The case management conference was to assess the progress of the application (which the defendants had attempted to accelerate the prosecution of at the EPO), and it was heard there that grant should be imminent, and it was hoped it would happen before the trial date.
Arnold J was of the opinion that there was no error in this decision, as the absence of any flexibility in this matter could result in situations where the defendant would not be able to justify the threat even if they would imminently be in a position to do so.
This decision makes it clear that threats made to assert rights under a patent application can be justified by virtue of Section 69(1) PA '77, provided the application is granted by trial. It also suggests that there may be discretion for a stay of proceedings to allow for situations where grant of the patent is imminent, with the implication that this would not happen if grant still looked remote.
Notes and case details
1: The threat in Brain acknowledged the fact that the rights were from a patent application.
Case details at a glance
- Court: High Court of Justice Chancery Division Patents Court
- Parties: (1) Global Flood Defence Systems Ltd and (2) UK Flood Barriers Ltd (claimants) and (1) Johan Van Den Noort Beheer BV, (2) Johann Heinrich Reindert Van Den Noort and (3) Flood Control International Limited (defendants)
- Citation:  EWHC 1851 (Pat)
- Date: 26 July 2016
- Full decision: http://dycip.com/ewhc1851pat