Thursday, March 26, 2020

Marshall on Unjustified Threats

From time to time I have blogged about how different legal systems regulate the wrongful assertion of patent rights:  by means of competition law (e.g., claims for monopolization by means of asserting fraudulently procured patents, or by sham litigation; abuse of dominant position); unfair competition law (e.g., claims for commercial disparagement, that is, misrepresenting noninfringing goods as infringing, or for false patent marking); remedies law (e.g., compensation for a wrongly issued preliminary or permanent injunction); other doctrines sounding in tort, equity, or general civil law (abuse of process, malicious prosecution, abuse of right, the various types of fraud, equitable defenses such as estoppel, etc.).  About six years ago it occurred to me that a book-length treatment of the comparative law and policy of wrongful enforcement would be an interesting project, but I've continued to put it aside while I've worked on other things.  Maybe this will be the year I at least start putting together some sort of detailed proposal on the topic, now that I've gotten some of the other books and papers I wanted to write out of the way.  In any event, these musings are prompted by an interesting paper just published by Joshua Marshall, Unjustified Threats as a Cause of Action, 42 E.I.P.R. 150 (2020).  Here is the abstract:
This article seeks to categorise unjustified threats as a cause of action. Hitherto, unjustified threats have been treated as tortious and the threat-maker deemed a legal wrongdoer. This article argues that orthodox principles of tort law cut against the unjustified threats regime. It is suggested that it is more analytically attractive to treat the regime as a form of estoppel or as a sui generis cause of action.
As explained by Mr. Marshall, under English law liability for making an unjustified or groundless threat to sue a secondary infringer hinges on, among other things, whether the express or implied representation that the recipient of the threat was infringing is wrong, not on whether it is reasonable; in addition, there is no liability if the threat is followed by the filing of an actual infringement suit against the recipient, before the recipient asserts a claim for unjustified threat.  The claim also doesn't apply if the threat is made to the primary infringer (and if I understand correctly, in this context the primary infringer would be the manufacturer of the infringing goods, while a secondary infringer would be a user or reseller).  So described, the cause of action (if that's what it is) does sound rather odd, and perhaps prone to unintended consequences (e.g., sue first, negotiate later).  Anyway, Mr. Marshall's paper makes for interesting reading, and as stated above causes me think that the time may be ripe for an extended analysis of the various ways the law might regulate wrongful enforcement; the various interests at stake; and the potential remedies.

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