Intellectual Property (Unjustified Threats) Bill [HL]

Debate between Baroness Bowles of Berkhamsted and Lord Stevenson of Balmacara

Report stage (Hansard): House of Lords
Wednesday 23rd November 2016 Lords Chamber

[Baroness Bowles of Berkhamsted (LD)]

My Lords, I also thank the Minister and must declare my interests as a retired chartered and European patent attorney, former fellow of the Chartered Institute of Patent Attorneys and former representative before the European Patent Office and European Union Intellectual Property Office; and that my husband has residual income from our former practice, and that we are proprietors of a registered trademark. That all means that I have had to send and receive the sort of correspondence that the Bill is all about.

The Minister has proposed amendments in this group and elsewhere that touch on most of the points on which I tabled amendments and spoke in Committee. The only points not touched on at all concern the proposed new section defining actionable threats, and I have not tabled similar amendments again, as these were perhaps overly substantive for this stage of a Law Commission Bill. That is a pity but, nevertheless, I have had the opportunity to elaborate on those points in Committee for the public record, and people can take note of what will remain problems.

With regard to Amendments 1, 2 and 4 for patents and the corresponding changes to the clauses for trademarks and designs, I agree that the deletion of “solely”, and clarifying the examples, make the safe harbour that is intended for permitted communications clearer and the accidental triggering of threats provisions less likely. I need say no more on that. I am grateful for the other drafting amendments on numbering and with reference to pending rights, which I raised.

[Lord Stevenson of Balmacara (Lab)]

My Lords, I am sure we will find when we examine the fine print that there is probably a prohibition in the Companion on making the sorts of speeches we have been hearing. That makes me even more determined to make them. It is right that we should record that the special procedures we went through for the Bill, although recognisably a labour—no pun intended—have generated a very successful outcome. I join others in congratulating our chair, the noble and learned Lord, Lord Saville of Newdigate, who got us through some interesting and tricky evidence sessions with great expediency and, as was said, on time.

I also congratulate the Minister, whom I recall making her first appearance at the Dispatch Box on an intellectual property Bill—“flustered” is perhaps too strong a word, but it certainly was not her natural habitat. But the feathers have grown and the plumage has become much more sleek and groomed, and now we have somebody who is fully equipped to deal with all matters of intellectual property. As has been said, those of us who have been involved with intellectual property Bills before have had not much success in getting changes, but she has come back with a raft of improvements to the Bill. Against the Law Commission, as has been said, you can say no finer than that.

It was a pleasure having an expert member on the committee, the noble Baroness, Lady Bowles of Berkhamsted. It is always a bit of a worry when you see somebody on a committee who knows a lot about the subject, because you think they may dominate it. She was indeed very powerful in her contributions, but they were to a point and finely judged. We all learned and benefited from that.

We have done extremely well, and the Minister has achieved a great deal and kept us informed. We had a letter only this week explaining what the proposals were and how they fitted into her thinking, and I am happy to support them.

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[Baroness Bowles of Berkhamsted]

My Lords, I again thank the Minister for these amendments. I welcome that “necessary” has been removed from the judge’s discretion provision by way of Amendment 3 and its family of amendments. It was a feature of our discussions with witnesses and in Committee that the court’s ability to exercise discretion was important and that the flavour should be that the judge can do what is reasonable in all the circumstances. This is reflected in the simple words “in the interests of justice” without what might have been an unusually high or inflexible hurdle of “necessary”.

On Amendment 6 and its corresponding family, we had significant discussion during evidence sessions relating to the status of take-down notices that are sent to digital platforms and then by the platforms on to vendors. Case law had left a bit of a limbo as to whether these are threats and, if they are, whether the defence that “all reasonable steps” have been taken to find the primary infringer is too high a hurdle, especially in the digital environment, where vendors may be in remote places and it is effectively impossible to trace who may truly be the primary infringer and the customer is, in effect, the importer. Did every lead have to be pursued or, if not, how many?

There is some assistance through the Minister’s amendment that deletes “all”. This makes the defence, if it is needed, a little easier, and the word “reasonable” still retains aspects of proportionality, so the test has not been made too light in other circumstances and can adapt.

However, the amendment does not solve the lacuna of whether a take-down notice is or is not a threat, with two interim judgments—Quads 4 Kids and then Cassie Creations—indicating it was an arguable point but not deciding. This is left, as I said, in limbo.

This is a substantive point—again, too substantive for this stage of a Law Commission Bill—and there is an opportunity to pursue issues relating to digital platforms in the Digital Economy Bill. On these Benches, we are interested in doing that for the status of take-down notices, among other things. I know the Minister can give no promises now but at least it, and how it originated, will be no surprise when the issue returns.

[Lord Stevenson of Balmacara]

My Lords, I want briefly to follow the noble and learned Lord, Lord Hope—my noble and learned kinsman—in expressing my thanks for the way in which these points have been taken, but perhaps I may add a little a gloss to what he said. The way he expressed it was that this is going to aid the generic judge in doing their job more efficiently than would otherwise be the case. However, it is worth recalling that the discussion we had in Committee on this—it was prompted by the evidence we received—turned on the fact that this is quite a key point in trying to perceive within the Bill the evolutionary steps that the Law Commission said existed, as this Bill provides a route forward from where we were in previous times to where we might be in the future in the possibility of establishing a more general tort in relation to business ethics and business behaviour, of which it is arguable that unjustified threats are a very unjustifiable part of the business environment. I know that the Minister shares my thinking on this and I agree with her that this is not the Bill in which to take these issues forward, but I think we both hope that there will be an opportunity to come back to this issue in some future legislation.

The point is an important one. If we see this piece of legislation as a step on a journey towards an alignment that is closer than is currently the case with the Paris convention 1883, we will be in a more satisfactory place to understand and perhaps plan forwards on how these things might happen. Whether that should be in the Digital Economy Bill, which is soon to arrive with us, we do not know, because it is not being dealt with in the Minister’s department any more. However, I am sure that she will take a close interest in it, particularly if the words “intellectual property” are flashed around. I am sure that she will be like a moth to the flame coming back to support us. In the interim, we support these amendments.

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[Lord Stevenson of Balmacara]

My Lords, I am grateful to the noble Baroness, Lady Bowles of Berkhamsted, for joining me in tabling this amendment and its parallel amendments in later parts of the Bill. I am sure that the Minister, when she comes to respond, will point out that, as phrased, the amendment does not achieve what I hope to draw out from her in the discussion. In that sense it is a probing amendment, which is probably inappropriate, but nevertheless it was the only way we could think of to get this thing up at this stage.

As the Minister said in Committee, the tactic of suing a professional adviser for making a threat has been used to disrupt negotiations and hamper legitimate client-adviser relationships. A professional adviser should not have to become personally involved in a threats action when they act only on behalf of their client. I accept that the Bill as drafted restricts the protection available to professional advisers to those who are regulated by a statutory regulatory body or entitled to legal professional privilege, but we already have in the Bill provisions under which the professional adviser may rely on the safe harbour provisions to avoid personal liability. Maybe there are other ways that other safeguards could be built into the Bill, such as when it is clear that the threat is speculative and when the principal and the adviser are clearly adopting a game of bluff with the alleged infringer, and so should, by rights, be at risk. I would certainly be happy to engage in discussions with the IPO and the Minister on this point if there was willingness to take it further.

I accept that exempting professional advisers from the threats provision has long been called for and that it would help stop game playing. However, to my mind this is a step too far. The Bill delivers an exemption that provides for the first time in English law that an agent would not be liable for following the specific instructions of his or her principal. I beg to move.

[Baroness Bowles of Berkhamsted]

My Lords, I tabled the amendment with the noble Lord, Lord Stevenson. I have a few additional comments that bear some relationship to what the effect of the word “specific” would be in this position.

The fact that advisers could themselves be liable has been, at least in some circumstances, a gatekeeper to check on the appropriateness of communications concerning infringement of intellectual property rights. It has also created other problems, hence the exemption that has been put forward in the Bill. We took evidence to establish that at least in the UK there are disciplinary provisions for wayward professionals, which assists in that gatekeeping, but here we are exempting advisers worldwide. I remain a little concerned as to whether the definition of “exempted adviser” is too widely drawn, but it seemed that there was another way to ensure some element of the gatekeeping is there to make sure the instructions to the adviser are specific.

An adviser overstepping the mark or not warning their client of the consequences of an unjustified threat could well be on the receiving end of a negligence action, but it is a bit grey as to what that instruction might need to be. Could it be a blanket instruction to “go get ‘em”, or to be trigger-happy without discussion about a whole portfolio of rights? The amendment aims to make it clear that specific, conscious instructions are needed, and that due care and attention to that takes place whoever and wherever the adviser may be. It also carries with it the flavour—this needs to be said and recorded—that the exempting of advisers is a particular exemption, not a “get out of jail free” card. Care still has to be taken over the composition and sending of letters or notices that allege infringement.

Intellectual Property (Unjustified Threats) Bill [HL]

Debate between Baroness Bowles of Berkhamsted and Lord Stevenson of Balmacara

Wednesday 9th November 2016 Other Business

[Baroness Bowles of Berkhamsted]

Thank you. I am sure that the Minister will not be surprised to learn that I do not quite agree with her summary. I think we have to go back again to what threats actions are all about, which is stopping the rights holder from being unfairly oppressive about their rights. They are not about protecting secondary infringers at all costs—in particular, they are not about protecting secondary infringing acts simultaneously performed by somebody who is a primary infringer.

The relevant section that we are talking about is not about a secondary infringer; it is about a primary infringer who makes something for disposal—previously, prior to Cavity Trays, you wold be in this rather stupid position where you could say, “You can’t make that anymore”, but you could not tell them not to sell it. That is a rather difficult letter that you have to write when trying to sort out the case and make sure all the ends are tidied up. If somebody holds themselves out, or claims—“purports”—to be something, that is very strong; maybe it is accidental. Actually, retailers should have a certain amount of clarity about whether they are telling the truth about their product. If they claim that they are making it and they are not, that is probably wrong under trades descriptions. I do not see why they should mislead somebody and then avail themselves of an action that was really meant to stop the rights holder being unfair. You end up with the situation where a primary infringer is able to have a bite back at the rights holder through the unfortunate accident of the relevant clause relating to the secondary acts done by the primary infringer. That is a situation that is no better than the situation prior to the Cavity Trays case.

If I talk about,

“having the same features so far as is material to the alleged infringement”,

you may think that it is vague but it will be in every undertaking that is ever agreed to and that has gone through the court, or that is done when agreeing not to go through the court but to withdraw the action. Therefore, to force things to go to the court in order to get a satisfactory undertaking will not make things any better. It will make things very bad for SMEs, in particular. I do not think the wording is vague at all. It talks about,

“so far as is material to the alleged infringement”—

that is very tight. But if you wanted it that, having pursued somebody, they could paint it blue instead of red and you have to go all the way round the loop again, it will not resolve the action. It is not saying a completely different product; it is essentially—as far as the court would perceive it—exactly the same infringement. I just think it is wrong that one cannot utilise again these sorts of letters.

Again, I would like to find out what level of support there is—there is perhaps a bit more support verbally than there might be in a vote. We only need to test on one amendment.

[Lord Stevenson of Balmacara]

The noble Baroness is making some very good points on this issue, but I am sure that she is aware of the situation—if we vote on this amendment and she is unfortunate enough to lose it, she will not be able to bring this back on Report. Might she reflect on that before she pushes the matter?

[Baroness Bowles of Berkhamsted]

I hear what the noble Lord says; if he is advising that it might be better to think about my wording a little more carefully, then I may be prepared to accept his advice.

[Lord Stevenson of Balmacara]

I think on this occasion that may not be sufficient. You will need to withdraw it, I think.

[Baroness Bowles of Berkhamsted]

Okay, I will withdraw the amendment.