The announcement indicates that
Intellectual property rights are a vital foundation of economic growth. Patents, trade marks and design rights ensure that innovation is rewarded and encouraged. If misused, however, they can stifle new ideas and inventions. Infringement litigation can be disruptive and expensive. The law provides a remedy in the shape of the threats provisions. Where a threat is made without a genuine intention to litigate; where there has been no infringement or where the right is invalid the threat is said to be groundless (or unjustified). Any person aggrieved by a groundless threat may apply to court for an injunction, declaration or damages. There are problems with the current law. The provisions do not distinguish well between the trade source of the infringement and others with a lesser connection, such as customers. Groundless threats actions can also be used tactically to drive a wedge between legal advisers and their clients or to drive cases to court rather than encourage negotiations over settlement.
The Commission is consulting on two approaches to reform.
The first is to build on the reforms made to patent law in 2004 and to extend these to the other rights. We also propose that legal advisers should be protected from liability for groundless threats.
The second approach is to treat groundless threats as a form of unfair competition and to introduce a new and broader cause of action based on the Paris Convention.The consultation includes a detailed discussion paper [PDF] .
The paper notes that
Like the UK, Australia has separate groundless threats provisions, set out in statutes and regulations dealing with patents, trade marks and design rights.7 As in the UK, the aggrieved party must establish there has been a threat, which may be express or implied: the test is how a reasonable person in the position of the recipient would understand it.8 The threats provisions do not make a distinction between primary and secondary infringers. The patent and design legislation states that “mere notification is not a threat”, but this provision is absent from the trade mark legislation.
In Australia, the Civil Dispute Resolution Act 2011 also places an obligation on the parties to a dispute to take genuine steps to resolve the dispute before civil proceedings are begun. The parties must file a “genuine steps statement” stating what they have done to try and reach a settlement. We have not uncovered any concern about how this duty interacts with groundless threat provisions. This appears to be because the requirements of the 2011 Act are quite flexible.
A major difference between groundless threats law in Australia and in the UK is that the Australian statutes provide immunity for legal advisers. Section 132 of the Patents Act 1990 states that a legal practitioner or registered patent attorney is not liable in respect of “an act done in his or her professional capacity on behalf of a client”. Similar immunities are also granted for threats about trade marks or designs.