TRADE MARK AND DESIGN LITIGATION – UNJUSTIFIED THREATS 

2.78 It is important for the law to provide a balance between those who seek to protect their intellectual property rights and those who receive unjustified threats of intellectual property litigation. To this end, the law currently seeks to protect traders against some unjustified threats of trade mark or design litigation, especially where threats are made to third parties who may decide not to stock a product rather than become embroiled in expensive litigation. However, these protections have become problematic. The relevant statutory provisions use a wide concept of a “threat”. It is difficult to discuss whether an IP right has been violated without that being deemed a tacit threat. This serves to encourage litigation, in contrast to the culture promoted by the Civil Procedure Rules, which seek to promote settlement and frank pre-action conduct between parties. 

2.79 Moreover, not only are rights holders themselves potentially liable, their legal advisors and employees too are liable for making threats. In the case of legal advisers, the rules create an unhelpful ethical dilemma that may impede their ability to give effective advice to their clients. 

2.80 This project will consider whether to repeal, reform, or extend four provisions that impose liability to pay damages on the makers of an unjustified threat of certain types of intellectual property (IP) litigation. The provisions are: section 26 of the Registered Designs Act 1949; section 253 of the Copyright, Designs and Patents Act 1988; section 21 of the Trade Marks Act 1994; and paragraph 6 of The Community Trade Mark Regulations 1996. 5 

2.81 The threat provisions in patent litigation were reformed in 2004, amending section 70(4) of the Patents Act 1977, and we will consider how these reformed provisions are operating in practice. 

2.82 We will work closely on this project with the Intellectual Property Office in consulting on the operation of the provisions and making recommendations for reform. The project will not draft legislation. It is intended to start in April 2012 and finish in March 2014".