Walking the groundless threats minefield

Abstract

Legal context. It is one of the peculiarities of UK law that threatening litigation of IP rights can, in some circumstances, give rise to an action for “groundless threats”. This has the potential to cause great disruption to the right-holder's case. There is even the potential for professional advisors to end up in the dock where they made the threat on their client's behalf, raising the possibility of a conflict of interest preventing the advisers from continuing to act.

Key points. To minimise the risk of these scenarios, intellectual property law advisors, be they patent or trade mark attorneys or solicitors, should be aware of the provisions that govern groundless threats actions for the various IP rights, particularly in light of the recent changes brought in by the Patents Act 2004 and the further changes expected to the groundless threats provisions relating to designs. These alterations increasingly complicate what has always been a nebulous area of the law. In addition, there is considerable tension between the “talk first, sue later” philosophy underlying the Civil Procedure Rules and the “sue first, talk later” approach traditionally used to circumvent threats actions. Reckitt recently confirmed that the groundless threats provisions, while running counter to the purpose of the CPR, cannot be ignored by the Courts. This article provides an overview of the current state of the groundless threats provisions that apply to the various IP rights, and considers how IP owners and their advisors can best navigate the groundless threats minefield.

Practical significance. Groundless threats form a complex and changing area of IP law in the UK, which advisers need to take into account in virtually every dispute. Amendments made to Section 70 of the Patents Act 1977 have not provided a threats panacea to patent holders and it remains to be seen how the section will be interpreted by the Courts. What is clear is that the threats provisions contained in the IP legislation will remain in force in one form or another for the foreseeable future and that they remain a trap for the unwary.