Infringements of IP Rights

So you have decided to take action

Letter of demand

Although it is not strictly a legal requirement (expect where specified in a contract), it is usual practice for an owner of IP rights to issue a letter of demand to a person suspected of infringing the IP rights.

An effective letter of demand will:

• Identify the issuer's entitlement to make the demands, as the owner or exclusive licensee of the rights;
• Set out all of the infringing conduct, with written examples if available;
• Specify the legal reason why there has been an infringement, such as the specific sections of the Copyright Act 1968 which have been infringed;
• Require undertakings within a specified period of time from the infringer that they will stop infringing, deliver up to the owner all infringing property, and provide information to the owner to enable a claim for compensation to be calculated; and
• Conclude by stating that if the demands are not met, the issuer will initiate legal proceedings without further notice.

Frequently an infringer will stop infringing once they receive a letter of demand, without legal proceedings being issued.

Courts will almost always expect this to have happened to clearly notify the person against whom the allegation of infringement is made. Some IP legislation, such as the Copyright Act 1968, reduces the amount of damages courts can impose on infringers, if the courts are satisfied the infringers did not know and could not be expected to have known they were infringing your rights. In such cases, the damages could be minimal or nil. Conversely, if infringement continues after the letter is received, the courts will then take this into account when assessing damages, sometimes increasing the damages the infringer is ordered to pay.

If you receive a letter of demand, do not respond until you have consulted your lawyer. If this is impractical, because you cannot see a lawyer straight away or because the time stipulated in the letter for response is too short, then:

• Acknowledge to the claimant or their lawyer (as appropriate) that you have received the letter;
• Inform the person sending the letter that you are going to seek legal advice;
• Request that the writer of the letter takes no further steps against you without giving you prior notice in writing; and
• Collate all documents relevant to the allegations and see your lawyer as soon as possible.

Surprise may be the best tactic

Sometimes surprise is the best tactic.

In some cases, giving the infringer notice of a claim gives them time to hide or destroy evidence and prejudice your case against them. In these circumstances it might be appropriate to go to court without giving notice to the infringer.

The court has the power to order an interim injunction. This may be an order that the alleged infringers stop their infringing action pending the outcome of a trial (which can take many months).

The following are examples of applications made on an urgent basis.

Anton Piller order

This is a civil equivalent of a search warrant. It allows the owner to make a search of an infringer's premises and seize specifically identified items. It is granted when the court is persuaded that there is a serious risk that papers or evidence will be destroyed or removed.

Anton Piller orders are not easily obtained from a court. To obtain an Anton Piller order, you must demonstrate a prima facie case of infringement and potentially serious or actual damage. There must be clear, strong evidence that the alleged infringer is likely to possess relevant documents or evidence which they are likely to destroy or conceal if the infringer had prior notice of the proceedings.

Anton Piller orders are often used in actions against former employees who have joined competitors or set up business in competition.

By way of example, a form of Anton Piller order has been used to stop the sale of bootleg merchandise at music concerts. Orders were directed at a group of people selling merchandise bearing either infringing trade marks or artwork that infringed copyright. This was a type of roaming Anton Piller order known as a 'John Doe' order. It has been used in Australia and elsewhere to seize copy merchandise being sold outside Metallica and Paul McCartney concerts.

Anton Piller orders allow the aggrieved party to obtain evidence of the suspected infringing conduct. However, this is only the first part of the proceedings. You will still need to fulfil all the formal pre-and post-trial procedures, and all other aspects of the alleged infringement still need to be proven in court.

Application for preliminary discovery

An owner of IP rights may not know the identity of an infringer, without having access to information and documents not in the owner's possession.

An order for preliminary discovery requires a person (who may not end up being a defendant, but merely someone who has relevant information or documents) to give information about possible infringers to a plaintiff.

In one example, the English Customs Office kept records of people importing a patented chemical from overseas. The plaintiff knew its rights were being infringed, but did not know the identity of the infringers. The Customs Office was required to disclose the importers' names, allowing the plaintiff to bring an action against those importers.

Application for interim injunction

This is an application to the court to immediately stop certain behaviour or to require a person to do certain things.

A court will issue an injunction when it believes there is a serious issue to be tried and monetary damages would not be an adequate remedy. If an injunction is issued the infringing conduct, although yet unproven, must be stopped immediately.

Interim injunctions are usually ordered for short periods of time, often one or two days, after which the parties are required to attend court to determine whether or not the injunction should be continued.

It is a condition imposed by the court for all interim injunctions, including an Anton Piller order, that the owner of the IP rights give an undertaking to the court to compensate any person adversely affected by the injunction if it is later found that the injunction should not have been ordered. This is known as an undertaking as to damages.