New Legislation Could Help Intellectual Property Owners To Enforce Their Rights

The Office of Fair Trading now has extra powers in the fight against copying, counterfeiting and stamping out the selling of fake goods.

Prior to May 2008 the OFT had various disparate powers in relation to mis-leading products and consumer protection. Now there is an overriding requirement on businesses to act fairly when dealing with consumers and there are a number of prohibited activities which the OFT will be policing.

The new obligations apply to all businesses before, during and after a contract is made with a consumer.  One of the most important prohibited activities for intellectual property owners is "Faking Goods".

Faking goods is widely defined as "Promoting a product similar to a product made by a particular manufacturer in such a manner as deliberately to mislead the consumer into believing that the product is made by that same manufacturer when it is not". Faking goods, as you would expect, is considered ’unfair’ in all circumstances.

This prohibition can be equated to the civil actions of ’passing off ’ trade mark or design right infringement.

However, only the OFT has been given the power to enforce the prohibition on Faking Goods so an aggrieved manufacturer must report any wrong doing to them.

As with any new powers there is uncertainty as to how it will be applied. For example what is meant by ‘promoting’ or ’deliberately misleading’. I suspect that these will, in practice, be difficult to prove.

These new powers do have bite. The OFT can impose a maximum of 2 years imprisonment and a £5,000 fine. Currently the OFT cannot award damages to the company harmed by the ‘fake goods’. Civil proceedings would still be required to claim damages.

Obviously having the OFT taking action against a third party infringer is cheaper than enforcing the rights yourself. However, the OFT’s ability to investigate and enforce is limited to their available resources and so any action could be too late to prevent irreparable damage to your products or goodwill.

This is undoubtedly an extra weapon in the war on piracy and counterfeiting and is probably something to be used in conjunction with civil action.

Another possible implication of the legislation is that “Astroturfing” may be prohibited. “Astroturfing” is the process of a business leaving positive feed back about their own goods and services on their website or on review/comparison sites. This could be seen to mislead customers under the legislation and thus be subject to OFT scrutiny.

As you can see intellectual property law is in a constant state of flux and being aware of all remedies available is critical to any business owner.

To keep up to date with all the latest developments in intellectual property and technology law visit Matthew Gingell’s blog at http://mogsipblog.blogspot.com/

Published 31/07/2008. The author of this article is Matthew Gingell