23 May 2016 #Dispute Resolution
The Courts now expect that parties who have a dispute will attempt to settle by negotiation before embarking on legal action. Detailed pre-action protocols stipulate how parties must therefore behave, and this will almost always involve sending a detailed letter before action and providing a response to it.
Many people are surprised that in the very important area of intellectual property rights the law actively discourages such attempts at early settlement. This is because, if a party threatens legal action on the grounds of infringement of intellectual property rights the recipient of those threats can threaten and indeed take its own legal action both against the solicitor making the threats and the solicitor’s client for “unjustified threats” of infringement. What that means is that, in many intellectual property cases, the parties are forced to embark on litigation before they ever have the opportunity to engage in pre-action exchanges. Since the vast majority of all commercial disputes are resolved before litigation is commenced, this disincentive to negotiation appears to be illogical.
The Government has now in the Queen’s speech signified its intention to pass legislation, adopting recommendations from the Law Commission, removing the existing penalties for unjustified threats of infringement proceedings for patents, design rights and trademarks.
We regularly advise clients on enforcement of their intellectual property rights as well as the protection of confidential and other information and our ability to take initial action before commencing proceedings will be enhanced by these legal changes.