Groundless Threats of Infringement

1To bring an action against groundless threat, three conditions must be satisfied in accordance with s 106 of the Patents Act. First, there must be a threat. The word ’threat’ is interpreted broadly to include express and implied threats and objectively to see whether the language used would convey to a reasonable man an intention to bring infringement proceedings. (See C&P Developments Co (London) v Sisabro Novelty Co (1953) 70 RPC 277 (CA).) Threats will include threats made in any media by way of circulars, advertisements or communications made orally or in writing. Secondly, the threat must aggrieve a person. An aggrieved person is also interpreted widely to include any person who has a real, as opposed to fanciful, commercial interest which has been interfered. (See Patrick John Brain v Ingledew Brown Bennison & Garrett (No 3) [1997] FSR 511, p 519.) Thirdly, such threats must be groundless. Any person aggrieved by a threat made by any other person with regard to proceedings for infringement of a patent can file a suit for declaration, injunction and damages. The plaintiff may seek a declaration that the threat is unjustifiable. The plaintiff may also seek an injunction to restrain threats in addition to damages.

2A threat would be actionable only if the words of the defendant convey a future threat of legal action. If there is no future threat of infringement, injunctive relief must be refused. (See Proctor v Bayley (1889) 6 RPC 538, pp 541, 545, (1889) LR 42 Ch D 390 (CA); Coflexip SA v Stolt Comex Seaway MS Ltd [1999] FSR 473, pp 477-79, [1999] 2 All ER 593.) The threat of legal proceedings need not be explicit; ‘it is enough if the language used is such as would convey to any reasonable man that the person using the language intended to bring proceedings for infringement against the person said to be threatened’. (C & P Development Co v Sisabro Novelty Co (1953) 70 RPC 277, p 282 (CA).) The fact that the threats are vague and ambiguous cannot be raised as a defence by the person making the threat. (See Speedcranes Ltd v Thomson [1972] SLT 226, p 229, (1978) RPC 221.) Such threats will be construed as proper threats pertaining to all the aspects of the patent. A statement made by the patentee that it will protect its interest with utmost vigour, will also amount to an actionable threat. (See Rosedale Associated Manufacturers v Airfix Products (1956) 73 RPC 360, p 363; Speedcranes Ltd v Thomson [1972] SLT 226, p 229, (1978) RPC 221, p 224.) It is now clear that even if the threatener has no patent at all he can be guilty of threats, ie, where a threat is made prior to grant, it would be understood as a threat to bring proceedings once the patent is granted. (Patrick John Brain v Ingledew Brown Bennison & Garrett [1996] FSR 341, pp 347-48 (CA).)

3A suit under s 106 of the Patents Act shall be instituted in any court not inferior to a district court having jurisdiction to try the suit. (Patents Act 1970, s 104.) As an action under s 106 is based on a threat of infringement proceedings under s 104, it is essential that such threat must be issued pertaining to a patent granted under the Patents Act. With regard to threats that emanate outside the jurisdiction and threats pertaining to patents not granted under the Patents Act, it is not clear whether such threats can be the subject matter of an action under the Act. The decision in Egg Fillers & Containers (Aust) Proprietary Ltd v Holed-Tite Packing Corporation, that the threats made outside the jurisdiction are not actionable, seems to be no longer good authority as it was not followed in Johnson Electric Industrial Manufactory Ltd v Mabuchi-Motor KK. ((1934) 51 RPC 9.) Later decisions indicate that threats with regard to intellectual property rights may be actionable even if they are not made within the jurisdiction or with regard to rights granted under the jurisdiction. ([1986] FSR 280, p 290. The case pertained to threats made outside jurisdiction. The defendants prayed for striking out certain particulars in the statement of claim, where in respect of the plaintiffs’ allegation that the defendants have threatened the plaintiffs’ customers or potential customers with proceedings for infringement of the patents. The court refused to strike out the same.) Threats need not emanate from or be communicated within the jurisdiction, if the threats are ‘regarded as made at the time when, and the place where, it is received by the person to whom it is addressed’. (See Prince plc v Prince Sports Group Inc [1998] FSR 21, p 29. A trademark case involving a domain name dispute in which the court rejected the argument of the defendant that threat issued by US lawyers related purely to US issues (unfair competition under the Lanham Act) and did not constitute a threat in the United Kingdom.) (Norbert Steinhardt and Son Ltd v Meth (1961) 105 CLR 440.)

4There have been no groundless threat cases involving patents. However, similar provisions in the Designs Act have attracted judicial scrutiny. In Metro Plastic Industries (Regd) v Galaxy Footwear (1999) a Full Bench of the Delhi High Court, asking whether the right of a registered proprietor of a design under the Indian Patents and Designs Act 1911 was absolute, answered it out of s 106 of the Patents Act, “Section 54 of the Designs Act incorporates into the Designs Act Section 106 of the Patents Act” and that “Section 106 of Patents Act enables a person to file a suit for a declaration that the threat given by a registered owner of the design is unjustified and to seek an injunction against continuance of a threat. It also gives a right to claim damages if any sustained thereby.” On what the threatener must then make good, it held that “Under Section 106 if such a suit is filed, then the registered owner would have to prove that there is an infringement of the design. Thus, the registered owner would have to show that the design was new or original and that it had not been previously published in India. If, as claimed, mere registration gave an absolute right then there would be no question of the registered owner having to prove these facts.” (para 30)

5Similarly, where an action is brought against a foreign party as a joint tortfeasor who is based outside the jurisdiction, alleging that the party acted together with other defendants in sending threat letters, the court will be reluctant to entertain action against a foreign party without substantial evidence. (Dimplex (UK) Ltd v DeLonghi [1996] FSR 622.) An entity based in a foreign country, together with its local agent, may bring an action of threat. (See Alipi Pietro v John Wright [1971] FSR 510, (1972) RPC 125, where members of an Italian partnership along with their agent in United Kingdom brought an action for threat. The warning was of so general a character that no interlocutory relief was granted.)

6The plaintiff in an action for threat of infringement has the right to commence even if a suit for infringement is pending, as the defendant is likely to raise the issue of infringement as a defence to the threat. (Lewis Falk Ltd v Henry Jacobwitz [1944] Ch 64, p 66.) Hence, the plaintiff, who seeks to obtain the injunction against the threats issued by the person claiming the benefit of the patent, must begin the action. (Kurtz v Spence (1886) LR 33 Ch D 579, p 583.) Where the threat is admitted, it will be for the defendant to open his case first. (Lewis Falk Ltd v Henry Jacobwitz [1944] Ch 64, p 66.)

7The court has complete discretion to determine who shall have the right to begin. Such discretion shall be exercised after consideration of what is the fair mode of trying the substantial matter in the action. In considering whether such an action is brought with due diligence, the time of issuing the threats and not the time when the party bringing the action first knew of the acts which he alleges to be infringements, is the period to be looked to. (Challender v Royle (1887) LR 36 Ch D 425, p 437, (1887) 4 RPC 363.)

8A threat may be made and communicated in different forms. It may be made through circulars or by oral or written communication. The phrase ‘circulars or advertisement or by communications’ should be given a broad interpretation. (See Skinner & Co v Shew & Co [1893] 1 Ch 413 (CA).) The communication need not be specifically addressed to the aggrieved person; a threat made to any other person shall be actionable. Even a conditional threat issued by the patentee, that the patentee would sue after the patent is granted, is actionable. A threatening communication should be read in a manner it would be perceived by a reasonable and normal recipient and must be determined whether it would be understood as a threat of patent proceedings. (Bowder Control Ltd v Acco Cable Controls Ltd (1990) RPC 427, p 431. See Luna Advertising Company Ltd v Burnham & Co (1928) 45 RPC 258, p 260.) The course of conduct, in issuing the threats, may be looked at as a whole, taking into consideration the entire facts and circumstances. (Patrick John Brain v Ingledew Brown Bennison & Garrett [1996] FSR 341, p 351 (CA).) A threat may be communicated either directly by the party or through his authorised agent.

9The plaintiff has to show that the threats were actually made. The defendant may in turn show that the alleged acts against which the threats were issued constituted infringement of a patent. If the defendant is successful in establishing infringement, the plaintiff may take a defence that the patent is invalid. (Lewis Falk Ltd v Henry Jacobwitz [1944] Ch 64, pp 65-66, (1944) 61 RPC 116, p 118. The case pertained to a registered design.) The plaintiff has to show that the threats were unjustifiable and had caused or was likely to cause damage to the business of the plaintiff, if a relief for damages is claimed. Where the plaintiff and the defendant were competitors, the customers would usually prefer not to involve themselves in the dispute. In such cases, it would be difficult to get direct evidence from the customers. The court shall, while assessing the fact, take note of the conduct of the parties, particularly the defendant’s intention, if any, to scare the customers with his threat. (Dimplex (UK) Ltd v DeLonghi [1996] FSR 622, p 626. See also Patrick John Brain v Ingledew Brown Bennison & Garrett [1996] FSR 341; Reymes-Cole v Elite Hosiery Co Ltd (1965) RPC 102 (CA).)