Colin Hulme discusses the most commonly encountered pitfalls in intellectual property law.

Issuing groundless threats

The rules on issuing groundless threats for IP infringement have always been a minefield and, although the very recent Intellectual Property (Groundless Threats) Act 2017 has helped simplify the position, they are still not straightforward. The issuing of a threat to enforce rights in a patent, registered trade mark, registered design and unregistered design can be actionable if issued in the wrong way or to the wrong party. These rules do not apply if threatening to enforce copyright or passing off rights.

Groundless threats rules have always caused concerns for practitioners as they are one of the rare instances in which a solicitor or trade mark or patent attorney acting for a disclosed principal can incur personal liability through issuing a groundless threat on behalf of a client. The 2017 Act has improved matters, but has in no way taken away this risk entirely. Your client can still be sued and, only if the solicitor or attorney can prove that they are acting within their mandate, can they avoid liability.

Whilst, perhaps it suits me to make the comment, I would always recommend before asserting a claim of IP infringement, specialist advice is obtained.

Ownership of copyright

In recent years, this has been the most frequent mistake which I have encountered. It is generally assumed that if you pay someone, ei an employee or a third party consultant, to produce an image or text for you, that you will own it. That is not necessarily the case.

If a copyright work is produced by an employee, it is important that you are in a position to prove it was created within their normal course of employment or that they were specifically instructed to do it. A common challenge is being able to establish, at a later stage, exactly who produced the work. Certainly if an employee produces a piece of important design or logo for you, I would recommend that a separate assignation is obtained to ensure that in future years you can easily evidence ownership of copyright without having to look around for historic employment contracts.

The position is more difficult if the work is produced by someone who is not employed by you. In the absence of any contract, the default position will be that the third party will own copyright of the work. It may well be that you will be able to imply adequate rights to a licence of the work or even that the work should be assigned to you, but having to rely on implied rights is never easy.

It is important to bear in mind that to properly assign copyright, you need a clear contract signed by the author of the work. I recommend that is done upfront to avoid pain later on. Whilst there may be some legal spend for that, it will be insignificant to what might be spent in a lengthy court dispute somewhere down the line.

Negative publicity arising from issue of cease and desist letters

Last year there was some well publicised instances of IP rightholders issuing cease and desist letters which have generated a lot of negative publicity for them. An alleged infringer of IP rights who has a sympathetic story to tell (or even worse a good defence!) can do a brand a lot of damage by putting the fact that a cease and desist letter has been issued into the public domain.

On the other hand, I have seen some very clever cease and desists letters which seek to get the point across while still appearing cool and “on brand”. Netflix’s IP counsel’s letter to the proprietor of a Stranger Things pop up shop was hilarious and the subsequent sharing of it on social media was only positive for Netflix’s brand. Likewise, Budweiser’s hiring of a town crier to read out a cease and desist letter to a potential infringer was certainly a novel way of getting their message out. Having said that, I wonder what would happen if the recipient ignores the letter/town crier and the brand requires to follow up with legal action. It could be argued that fair notice of the claim was not given by way of a cease and desist letter which is too informal.

The crucial advice here is to do your homework on the infringer; check that you have got a good claim before you seek to enforce it and ensure that all concerned are ready for the risks of negative publicity which can arise.

We have a practice of marking such cease and desist letters as being “STRICTLY PRIVATE & CONFIDENTIAL”. That gives us the opportunity to argue that the correspondence is confidential, and might help deter it being posted online.

I hope you found this blog on three common mistakes in IP law to be of interest. Next month my blog will cover the limits on trade mark rights, the importance of preventing confidential information from becoming public information and the forgotten moral rights. If you require assistance on these or any other aspects of IP law, please do not hesitate to get in touch.