Case Law Analysis: Court Determines Threats of Infringement Proceedings in Online Marketplace Communication

Citation: [2023] EWCA Civ 1502
Judgment on

Introduction

In the case of The NOCO Company v Shenzhen Carku Technology Co Ltd, the Court of Appeal (EWCA Civ 1502) considered the question of whether communications made by NOCO to Amazon constituted “threats of infringement proceedings” under Section 70 of the Patents Act 1977. This article analyses the legal principles applied in the case and the reasoning behind the court’s decision.

Key Facts

NOCO and Carku are competitors in the manufacture of lithium-ion batteries for jump-starting vehicles. NOCO held a patent (GB 2 257 858), which it claimed Carku infringed. NOCO utilized Amazon’s Infringement Form to communicate its claims to Amazon, asserting Carku’s products infringed its patent and requesting their removal from Amazon’s site. Amazon subsequently delisted the identified products, which led to substantial sales loss for Carku.

Carku sought declarations of non-infringement and patent invalidity, revocation of NOCO’s patent, and relief against unjustified threats of infringement. While the patent was invalidated for obviousness, this case concerns the alleged threats made towards Amazon by NOCO—specifically, whether these communications met the threshold of “threats of infringement proceedings.”

Threats of Infringement Proceedings

Under Section 70 of the Patents Act 1977, a communication contains a “threat of infringement proceedings” if it would be understood by a reasonable person that:

  • A patent exists.
  • There is an intention to bring proceedings for infringement by an act done or potentially to be done in the UK.

This does not require that the threat must be directed at the recipient itself; it suffices if there’s an intention to bring proceedings against “another person.”

Actionable Threats

Section 70A states a threat is actionable by any person aggrieved by it unless it’s an allegation of primary infringement (Section 70A(2)) or made to a primary infringer (Section 70A(4)). However, if a threat is not express and is contained in a permitted communication—defined in Section 70B—it is not actionable. A “permitted communication” includes giving notice of a patent, discovering infringement details, or giving notice that a party has a right under a patent.

Interpretation of Communications

The communication must be interpreted from the perspective of a reasonable person in the recipient’s position. The recipient’s actual understanding or actions in response are not directly relevant.

The court took a holistic approach, assessing the sequence of communications collectively, rather than in isolation, to gauge the conveyed impression.

Amazon’s IPR Policy

The court scrutinized Amazon’s IPR policy, which included a notification and take down procedure allowing IP rights holders to report infringements, leading to potential delisting of products without an admission of liability from Amazon. A request to a potential secondary infringer to delist a product was interpreted as an implicit threat.

Outcomes

The Court of Appeal upheld the judgment of the High Court, ruling that the communications from NOCO to Amazon did indeed constitute threats of infringement proceedings against Amazon. The judges recognized that such communications, which asserted patent rights, claimed infringement, and requested action to end alleged infringements, would be viewed as classic threats in most contexts. The critical difference here was NOCO’s use of Amazon’s IPR procedure, which was viewed not as merely reporting but actively requesting the delisting of products, thereby constituting a threat of legal action should the request be ignored.

Furthermore, even if the threats were not perceived as directly against Amazon, they unmistakably targeted third parties (the distributors), which still falls within the realm of actionable threats.

Conclusion

In The NOCO Company v Shenzhen Carku Technology Co Ltd, the Court of Appeal has provided an emphatic interpretation of what constitutes a “threat of infringement proceedings” within the context of online marketplaces like Amazon. It reinforces the understanding that the statutory test is concerned with the impression conveyed to a reasonable person by the communications and that actions taken under an IPR policy can, depending on the specifics of the communication, be interpreted as threats actionable by aggrieved parties. This decision elucidates the fine line between permissible patent protection activities and those that might unduly intimidate or coerce market participants, with implications for how patent rights are asserted in commercial environments.