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22 October 2018
Rights holders often threaten to enforce their rights against others as a scare tactic while knowing that actually enforcing them would not be that simple. A prime example of this is when rights holders threaten third parties with a patent or design infringement action despite knowing that their patent or design is not necessarily valid or that the third party has a valid excuse for the alleged infringement. Fortunately, in South Africa aggrieved parties can defend themselves against these so-called 'infringement bullies'.
Section 70 of the Patents Act (57/1978) provides that a person aggrieved by threats of patent infringement proceedings may institute proceedings to restrain the continuance of the threats. Such aggrieved person, if successful, has the following remedies available:
Section 37 of the Designs Act (195/1993) is essentially identical to Section 70 of the Patents Act, and an aggrieved person could similarly make use of those provisions in the appropriate manner.
The Patents and Designs Acts also provide (under Sections 69 and 36 respectively) that a court can declare non-infringement of a patent or design. This is yet another defence against infringement bullies.
However, some considerations need to be made before any of these defences can be invoked. In a recent matter, a bully threatened action against a third party for, among other things, infringing the bully's registered designs. It transpired that the bully had also threatened other parties in this particular commercial field, which supported the contention that it was a bully. Despite the bully being presented with the third party's defence, the bully did not withdraw from its position and continued its threats of instituting infringement proceedings. Meanwhile, the third party's customers were made aware of this alleged infringement, which caused it reputational harm. Proceedings were then instituted under Sections 36 and 37 of the Designs Act to remedy the issue.
Subsequently, the bully capitulated and agreed that:
This will be made an order of court, after which the third party can repair the reputational damages caused by the infringement allegation.
This case illustrates the care that must be taken when instituting proceedings haphazardly and with the sole aim of bullying others. Further, successfully defending alleged infringements will call out bullies for all to see, thereby damaging their reputation in the marketplace.
Enforcing IP rights must be a priority, but it is imperative to carefully consider all aspects before instituting proceedings for infringement against others. If a party is on the receiving end, they should contact an IP attorney to help them take care of the bullies.
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