Policy paper

IP (Unjustified Threats) Bill: Delegated Powers Memorandum

Published 19 May 2016

1. Introduction

This Memorandum has been prepared for the Delegated Powers and Regulatory Reform Committee by the Department for Business, Innovation and Skills. It identifies two provisions of the Bill which confer a power to make delegated legislation and explains why the power has been taken and the nature of, and reason for, the procedure selected.

The Department for Business, Innovation and Skills has considered the use of the power in the Bill and is satisfied that it is necessary and justified.

2. Overview of the Bill

The Intellectual Property (Unjustified Threats) Bill (“the Bill”) contains provisions to reform the law of unjustified threats as it applies to patents, trade marks and designs. The law in this area provides a remedy for those who are affected by unjustified threats. Under the provisions of the Bill, threats to sue for infringement of a relevant intellectual property right are unjustified where they are made in respect of an invalid right or where there has been no infringement.

The Bill seeks to clarify the law in relation to unjustified threats by giving effect to recommendations made by the Law Commission of England and Wales ^{[footnote 1]}.

The Bill will:

a. Produce a clear law of unjustified threats by removing inconsistencies between provisions for patents, trade marks and designs so that they follow the same structure and utilise the same language wherever possible.

b. Clarify who may be threatened safely by excluding from liability threats made to those who have done, or intend to do, acts that are capable of causing the most commercial damage.

c. Create a framework so that disputing parties can safely communicate by identifying permitted purposes for communication.

d. Protect professional advisers from personal liability for making threats when acting in a professional capacity and on the instructions of a client.

Clause 7(3) (extent)

• power conferred on: HM The Queen

• power exercised by: Order in Council

• parliamentary Procedure: None

3. Context and purpose

Clause 1(3) of the Bill will amend section 70F of the Patents Act 1977 (“the 1977 Act”), as inserted by clause 1(2) of the Bill, to enable that section to apply to European patents that come within the jurisidiction of the Unified Patent Court. Clause 7(3) provides that Her Majesty may by Order in Council extend the amendment made by clause 1(3) to the Isle of Man.

Schedule A3 will be inserted into the 1977 Act by the Patents (European Patent with Unitary Effect and Unified Patent Court) Order 2016 (“the 2016 Order”) ^{[footnote 2]}. Clause 1(8) of the Bill amends paragraph 2 of Schedule A3 to apply sections 70 to 70F to the European patent with unitary effect. Clause 7(3) provides that Her Majesty may by Order in Council extend the amendment made by clause 1(8) to the Isle of Man.

Clause 1(3) and (8) will be extended to the Isle of Man when the relevant provisions in relation to the European patent with unitary effect and the Unified Patent Court (inserted into the 1977 Act by the 2016 Order) are themselves extended to the Isle of Man.

4. Justification

The purpose of clause 7(3) is to ensure amendments to the unjustified threats provisions in the 1977 Act, insofar as they relate to European patents that fall within the jurisdiction of Unified Patent Court, apply to the Isle of Man.

5. Justification for the procedure selected

Clause 7(3) is a power to extend provision to the Isle of Man and as such does not normally require a Parliamentary procedure to reflect the particular constitutional status of the Isle of Man.

Clause 7(4) (section 255(2) of the Copyright, Designs and Patents Act 1988 (“CDPA”) (extension of certain provisions to the Isle of Man, the Channel Islands or other territories, with or without modifications))

• power conferred on: HM the Queen

• power exercised by: Order in Council

• parliamentary procedure: None

6. Context and purpose

Section 255(2) of the CDPA gives a power to Her Majesty to direct that Part III of the CDPA may by Order in Council extend to: (a) any of the Channel Islands; (b) the Isle of Man; or (c) any colony (subject to any exceptions or modifications as may be specified in such Order). To date, no Order in Council has been made under section 255(2) CDPA.

Clause 5 of the Bill amends the existing provisions on unjustified threats in relation to the UK design right which are found in Part III of the CDPA. Clause 7(4) provides that the power to make an Order in Council under section 255(2) may be exercised in relation to these amendments made by clause 5.
Justification

The purpose of Clause 7(4) is to ensure that amendments to the unjustified threats provisions in the CDPA are subject to the same territorial extent provisions as the current law.

7. Justification for procedure selected

There is no Parliamentary procedure for an Order in Council under section 255(2) and clause 7(4) does not affect that position.

BIS Legal May 2016

1. The Law Commission’s final recommendations are set out in their reports, Patents, Trade Marks and Design Rights: Groundless Threats (2014) report No.346 and Patents, Trade Marks and Designs: Unjustified Threats (2015) report No 360. ↩

2. S.I. 2016/388. ↩