Proposals to reform the law governing threats of legal action in intellectual property cases could help small and medium-sized businesses defend their rights against infringements, leading IP solicitors told a House of Lords committee yesterday.

A Public Bill Committee heard that the Intellectual Property (Unjustified Threats) Bill, announced in May, would also improve communications between clients and solicitors and reduce the need for litigation.

Mark Anderson, chair of the Law Society’s IP committee, told the committee that clients whose IP was being misused should be entitled to take action or to inform another company that it was misappropriating its IP without fear of reprisals. 

The bill, drafted by the Law Commission, would curtail a legal remedy available to a party threatened with IP litigation on the grounds that a letter constituted an ‘unjustified threat’.

The current proposals would alter that remedy and instead create instances where someone cannot be held liable for making an ‘unjustified threat’.

Anderson told the committee the law needed updating and that solicitors ‘should not be at risk’ for telling a client that they are entitled to take action against infringement.

‘If you can’t even say that then how is an SME supposed to get their attention?’ he said.

Once infringement proceedings are started the threats provisions no longer apply and Anderson said the proposed bill could lead to a reduction in litigation.

Also giving evidence were Law Society IP committee member and partner at London firm Waterfront Solicitors Matthew Harris, and Vicki Salmon, a member of the Chartered Institute of Patent Attorneys.

Harris said the bill would bring the law in line with ‘what a client would normally expect’.

According to the proposed bill, a threats action cannot be brought if the threat refers to primary acts, including making or importing a product, and is made to someone responsible for one of the primary acts.

Also, implied threats will not allow a claim for unjustified threats if they are contained in a permitted communication, including giving notice that an IP right exists; discovering if the right is being infringed and giving notice that sender has an interest in the relevant right.

Baroness Neville-Rolfe (pictured), the IP minister, asked if the bill would be welcomed by SMEs and improve communications, resulting in a reduced need for litigation.

Salmon said it would. ‘You have to at least write a letter which gets their [an infringer's] attention. Improved communications can only be better, and the ability to write a letter is a step forward,’ she said.

'This is not just limited to SME’s however. Some big businesses may also not have a detailed understanding of the law.'