A recent update to the UK unjustified threats law was essential in light of the imminent Unified Patent Court, explains Steven Willis.

On 13 October 2015, the Law Commission published its final report of the project to reform the UK law relating to unjustified threats. The report publishes and seeks to explain the proposed Intellectual Property (Unjustified Threats) Bill (the “Draft Bill”). The Draft Bill addresses inter alia the circumstances in which the UK law of unjustified threats will be applicable to Unitary Patents and European Patents which are not opted out of the UPC, or, having been opted out, are subsequently opted in.

Under the existing law, one of the requirements for a threat to be actionable is that it must be understood (on an objective assessment) as a threat to sue in a UK court. A threat to sue in respect of a right over which the UPC has exclusive jurisdiction could not therefore be actionable under the current law as the UPC will not in legal terms be a UK Court. The Draft Bill seeks to address this, while at the same time ensuring that UK law is not inadvertently “exported” to other jurisdictions.

The Law Commission considered the Court of Appeal decision in Best Buy, the leading authority concerning the application of UK unjustified threats law to Community Trade Marks (CTMs). In Best Buy, the alleged threat was made in a letter sent by the defendant’s Spanish lawyers, which sought an undertaking not to use its CTMs in Europe. The defendant was aware that the claimant had planned to open a shop in the UK and that it had acquired a 50% stake in a UK retailer whose main centre of operations was the UK and from which it intended to develop its European business. Although it would have been open to the claimant to initiate its action in a range of member states, the English Courts held that it would be reasonable to understand the threat to be one to sue in the UK.  The location of the potentially infringing acts was central to the court’s decision

The Law Commission’s approach stays true to the court’s approach in Best Buy; it is proposed that the threats provisions should apply only to threats with some link to the UK. Accordingly, a new two stage test has been proposed:

1. Would the communication be understood by the reasonable recipient in the position of the actual recipient as meaning that someone has a right and intends to enforce it against another?; and
2. Would they understand the relevant threats to be made in respect of alleged acts of infringement which have been or would be committed in the UK?

During the consultation which gave rise to the Draft Bill, the Law Commission considered the possibility of broader reform to bring UK law in line with that of the majority of UPC signatories, where the issue of unjustified threats is most commonly addressed as an aspect of the general law of tort or through unfair competition law. Notwithstanding the ultimate rejection of this approach, the Law Commission appears to recognise that its proposal is an imperfect solution necessitated by an urgent need for reform, which partly derives from the imminent arrival of the UPC. The report encourages further consideration of broader reform in the area. As such, this may not be the final word on the issue.