Intellectual Property

In this chapter of our Annual Insurance Review 2023, we look at the main developments in 2022 and expected issues in 2023 for Intellectual Property.

Key developments in 2022 

In September 2022, the UK government introduced the Retained EU Law (Revocation and Reform) Bill 2022-23. This will lead to certain retained EU legislation being revoked or amended and will provide higher courts with scope to depart from EU case law. A sunset clause deadline of the end of 2023 means the Government will have limited time to decide what retained EU law to keep and what to repeal or amend.  Considerable activity is expected early in 2023 which will impact those scoping, bringing or defending intellectual property (IP) claims.  

In the Intellectual Property Enterprise Court, costs caps increased from £50,000 to £60,000 for liability trials and £25,000 to £30,000 for quantum trials. 

Lifestyle Equities CV v Amazon UK Services, a consumer targeting case, will have significant impact for businesses operating websites across borders and their potential to be liable for IP infringements (the case increases the scope for this). As a result of the Court of Appeal's judgment, businesses should consider whether to geoblock certain territories to avoid inadvertently targeting consumers in non-core territories, which could give rise to infringement. 

In Shazam, the Court gave a landmark ruling that the character ‘Del Boy’ from the TV show Only Fools and Horses is protected under UK copyright law as a literary work. This is a significant departure from previous case law and has opened the door to copyright protection assertions in relation to well-known characters across all media. 

What to look out for in 2023

In our 2021 Review, we covered Sky v Skykick which, on its return to the High Court from the Court of Justice, found that Sky had registered trademarks in bad faith. That court had limited the scope of Sky's registration to goods and services that Sky actually used (or intended to use). In 2021, in a more evenly balanced judgment, the Court of Appeal partly reversed the High Court's ruling, finding that applying to register a trademark without an intention to use it in every 'species of goods or services falling within a general description' did not alone constitute bad faith. This was on the basis that the applicant may have a strategy of seeking broad protection to cover further, as yet unformulated, goods within the same category.

The Court of Appeal's decision provides a quandary for defendants to infringement proceedings (and their insurers) when it comes to running a counterclaim based on bad faith. To succeed, they are currently required to evidence that an application was made with the intent to be broad enough to stymie competition, rather than being part of a genuine strategy that is not yet completely formulated. The Supreme Court has granted Skykick permission to appeal and a decision, which will provide much needed clarity, is expected in 2023. 

The developments covered in this issue all move the dial to some extent. For those without access to valuable current legal expertise, this could therefore result in incorrect pleadings or a failure to identify an important point of defence.  

Written by Joshy Thomas.

Download our full Annual Insurance Review 2023 for more insights.