Lawyers who act on instructions in threatening potential intellectual property infringers with action are to be exempt from being sued when the threat turns out to be groundless, after the government recently gave the go-ahead for law reforms.
Accepting a raft of reforms recommended last year by the Law Commission, the Department for Business, Innovation & Skills (BIS) and its executive agency, the Intellectual Property Office, agreed to changes that should mean businesses can enforce IP rights without satellite litigation over ‘threats’.
In its final response to the proposals, the government accepted the commission’s argument that the right to sue lawyers could be manipulated by disputing parties and added to the cost of litigation, and that misbehaviour by lawyers should be dealt with by their regulators.
But BIS stipulated that in order to qualify for the exemption, lawyers would have to ensure that communications “from the legal representative on behalf of a client clearly identifies that client”, and that “no doubt that any threat is deemed to have been made by the client themselves (even if this is not explicitly stated by the legal representative)”.
Further, it added: “The government considers that the burden of proof should fall on the legal representative to show that they were acting on instructions and so exempt from the threats provisions.”
As well as the protections for professional advisers, reform proposals that have been accepted that include permitting legitimate communication with secondary actors using safe harbour provisions, enabling appropriate communication about intended acts, and simplifying the acts that can be referred to when approaching prospective defendants.
In its consultation over reforms, the commission agreed that lawyers or registered attorneys acting on client instructions should not be held personally liable for making threats. But if they went beyond their instructions or acted in a personal capacity, they should risk liability, it argued.
Explaining its thinking, it said: “The right to sue lawyers for the threats they make on behalf of their clients can be manipulated by disputing parties. It adds to the complexity and costs of litigation as advisers may refuse to sign letters, ask for indemnities or (in some cases) are no longer able to act for their clients.
“We accept that in some circumstances personal liability restrains unduly aggressive behaviour, but we think that this can and should be dealt with by professional bodies.”
The acceptance of the case for change on groundless threats was welcomed by the Law Society’s IP law committee, which has long campaigned on the issue. Its chair, Isabel Davies, said: ‘We welcome the government’s announcement that it intends to introduce legislation that largely reflects the Law Commission’s recommendations. This is an important step towards ensuring IP law is clear, coherent and applicable.”