Coming off the fence: IPEC knows a threat when it sees one

"Brundle" is a lovely word. It rolls off the tongue in a most agreeable manner. To Merpel it sounds like a cross between 'bundle' and 'trundle'.  However it is also a name that has been heard to echo round the courts in recent times: FH Brundle v Perry [2014] EWHC 475 (IPEC) is an Intellectual Property Enterprise Court, England and Wales, ruling of Judge Hacon from 6 March and it addresses that minefield for unsuspecting patent-entitled litigants and their legal advisers -- liability for making groundless threats to sue someone for patent infringement.

Brundle was a wholesaler of metal products, including fences and component items for fences. Among the products sold by Brundle were two versions of the 'Nylofor 3D Bracket', a bracket used to attach fence panels to a post. Brundle also sold a fence panel called the 'Nylofor 3M Panel'. In October 2010 Perry wrote to inform Brundle that its products infringed his patent, demanding an account of profit and a share in those profits. For good measure, Perry promised to commence patent infringement proceedings if no solution was agreed. Brundle denied infringement and sought an undertaking from Perry that he would engage in no more threats. Perry however sent two further letters telling Brundle to stop infringing what he claimed was his patent.

Norbert checks out unsuspecting fences for
Nylofor brackets

In February 2013 Brundle sued Perry under section 70 of the Patents Act 1977, seeking to restrain him from making groundless threats of proceedings for infringement of a patent. Perry counterclaimed for infringement. The specifications of the product in question, set out in claim one of the claim form, related to nine features of the bracket and its use. In these proceedings the court had to decide (i) whether Perry's letters constituted a threat to sue for patent infringement; (ii) whether Brundle was a "person aggrieved" by Perry’s threats under section 70 and (iii) whether any of the products in respect of which threats were made were products falling within the claims of the patent. Both sides accepted that if, the bracket fell within the claims of the patent, it would infringe.

Judge Hacon upheld Brundle's claim but dismissed Perry's counterclaim. In his view:

* it was not necessary for a claimant in a threats action to prove that the defendant had, in so many words, said that he intended to issue proceedings: all he had to do was to show that the defendant had asserted that he had legal rights in respect of intellectual property and that he intended, as against the claimant, to enforce those rights;

* the threat to sue need not be explicit: might be veiled or covert, conditional or future [well, they could hardly be in the past, notes Merpel].

* on the true construction of the letters, threats had been made. A reasonable recipient of the letters would have understood Perry to have referred to both variants of the bracket and that the threats were directed at Brundle, the addressee of the letters. On this basis, Brundle was clearly a "person aggrieved".

* on the evidence, the bracket did not fall within claim one. Since it didn't infringe the patent, Perry had no defence to Brundle's threats action.

This Kat notes the force of Perry's first letter, addressed to Brundle's "Chief Executive/Chairman", which reads as follows:

This Nylofor product infringes my Patent and I demand that you provide an Account of Profits of direct profit on sales of:

1. The quantity of the Nylofor 3D bracket you have sold between August 2003 – October 2011.

2. The number of Nylofor 3M fence panels that have been sold during the same period that are installed using the Nylofor bracket.

3. The number of fence posts sold corresponding with the number of fence panels sold during the same period.

4. The quantity of add on products sold such as the allen key tool specifically designed to use with the Nylofor 3D bracket.

I am legally entitled to a share of these profits whilst the Patent was in force and which is currently being restored to the register, as it had lapsed temporarily due to Patent Office error in late 2011.

I intend to take proceedings against your Company in the High Court if no amicable solution can be reached regards paying me my share of the profits for your use of my inventions without any licence to do so. Please respond within 14 days or I will commence proceedings against your Company.

He finds it difficult to think that anyone could reach a conclusion other than that this letter is a threat to sue.  He also notes Perry's submission at [27]:

"Mr Perry pointed out that the October Letter was addressed to the attention of "Chief Executive/Chairman". He submitted that worldly wise CEOs and Chairmen of companies such as Brundle do not take such letters seriously". 

You have to be a litigant in person to say things like that; it may be doubted that any barrister would be able to keep a straight face while delivering lines like that.

Hinge and Bracket here