This blog was authored by Hayley Tarr(Opens in a new tab/window), Solicitor, Registered Patent and Trade Marks Attorney and Director of Tarr Law(Opens in a new tab/window). The views expressed do not necessarily reflect the views or position of IP Australia, and should not be taken as constituting advice. If you require guidance specific to your situation, you should consider seeking professional advice.
SMEs need to keep a tight reign over expenditure, to keep their cash flow in check. This makes it difficult when an SME receives intellectual property infringement allegations out of the blue and thus faces engaging a registered attorney or specialist intellectual property lawyer for advice, incurring legal fees it has not budgeted for.
Increasingly, this is an issue facing SMEs as the people making the allegations are using AI to draft up their own correspondence. Thus, there is no registered attorney or specialist intellectual property lawyer on their end, to reality- test the allegations and perhaps explain why it is not appropriate for the correspondence to be sent. And there are no legal fees incurred by the people making the allegations, so there is no ‘skin off their nose’ to make them.
This is a huge problem as AI cannot replace a registered attorney or specialist intellectual property lawyer. It can generate some suggested laws but these need to be reviewed for applicability to the facts of the case at hand, and then the draft correspondence needs to be amended to input the specific facts, with a detailed analysis of why and how the laws extracted from the Large Language Model (LLM) by AI apply to those facts.
That is, the initial outline created by AI needs to be heavily modified by someone who knows what they are talking about.
Examples of flawed claims
When people making the allegations use AI to draft up their own correspondence, they are not doing this. They are not qualified to do it, and they don’t know enough to do it. So, what is sent is often little more than AI produced garbage.
As an example, one client recently received allegations that “Both these designs and their accompanying imagery are protected under copyright, design, and intellectual property laws. Your unauthorised reproduction, marketing, and sale of these works constitutes wilful infringement.” No mention of any design registrations was made, and no design registration numbers were provided. As it turned out, there were no design registrations, and thus the claim that the designs were protected under design laws was utterly false.
As another example, one client recently received allegations of “Copyright Infringement unauthorised reproduction of substantial parts of a literary work (proposal, framework, and wording) contrary to the Copyright Act 1968 (Cth).” But these allegations were made in a vacuum, with no indication of what exact text had been copied and where the copied text was supposedly being used. There likely was no copyright infringement, but we can never know, as a random claim to copyright infringement, without more, could refer to anything. It is a useless claim as it cannot be properly assessed or responded to.
So, in sending AI generated letters of demand, these people are sending little more than complete drivel.
The problem is that the person receiving an AI generated letter of demand doesn’t know enough to determine whether it is safe to just dismiss that correspondence outright. They are not qualified to assess whether any of the allegations are substantiated. They might suspect that the correspondence carries little credibility, but what should they do? If they ignore it, what are the risks and consequences? Out of caution, should they engage a registered attorney or specialist intellectual property lawyer for advice, and perhaps to draft up and send a reply?
And this is how the legal fees are incurred. It is not fair to small business owners who are trying their best to manage the challenges of everyday life and business, that on top of it they are hit with incurring legal fees to respond to allegations made by someone who flippantly made those allegations without spending a cent to ascertain the veracity of the allegations or to properly formulate them in a way that allows the recipient to adequately review and respond to them.
For these business owners, I write this blog. The aim is to give you a checklist of 10 points to run through if you receive allegations that do not come from a registered attorney or specialist intellectual property lawyer, but come directly from the person making the allegations (except in cases where the person making the allegations is a large entity, as they likely have their own in-house legal department, so use common sense before applying the checklist). The checklist might save you from needing to engage a registered attorney or specialist intellectual property lawyer at all. Or at the very least it will help you to garner the requisite information and narrow the relevant issues, so that you can better brief the registered attorney or specialist intellectual property lawyer when you do engage them.
10 point checklist
- When a party makes an allegation of patent, design or trade mark infringement, that allegation should come with a clear indication of the patent, design or trade mark registration number. If it does not, it is appropriate to reply to the correspondence, stating that you cannot properly investigate the allegations until you are made aware of the patent, design or trade mark registration number for the IP right they are alleging has been infringed. Note: This may tip them off to the fact that they need to file a trade mark application. So, if you haven’t filed your own application, engage a registered attorney or specialist intellectual property lawyer to help you do so before you ask for their trade mark number. That way, your priority date will pre-date theirs.
- If they are alleging the infringement has occurred in Australia, the patent, design or trade mark registration number they give you must be an Australian patent, design or trade mark registration number. Is it? IP rights are jurisdiction specific.
- In order to rely on a registered design as the basis for infringement allegations, that design must be certified. Is it?
- In order to rely on a patent or trade mark for patent and trade mark infringement allegations, that patent or trade mark must be granted/registered. Is it? Note: If it is pending or vulnerable to revocation or removal for non-use (or other applications of the alleger are pending or vulnerable to revocation or removal for non-use), can you oppose or apply for removal to get leverage? Engage a registered attorney or specialist intellectual property lawyer urgently, before the deadline to oppose or apply for revocation or your best window to apply for removal for non-use runs out.
- What is the priority date of the patent, design or trade mark number to which they refer? Have you used the allegedly infringing product or sign since before that date?
- If they are alleging passing off or misleading and deceptive conduct, they are claiming to have a reputation. What evidence have they provided of this reputation?
When a party makes an allegation of copyright infringement, they should be clear about what the text, photo or other copyright work is that has been copied, and what work you are using that they perceive amounts to the copied work. Usually a side by side comparison is appropriate, such as a screenshot of a photo they took on their website, and a screenshot of that same photo on your website, thus showing you used their photo without their permission (not that you would ever do anything like that as you are all savvy enough to be on the IP First Response IP Australia’s website so you are savvy enough not to engage in such blatant infringement!)
The same is true for patent, design and trade mark infringement allegations. The person making the patent infringement allegations needs to provide a breakdown of what claims are infringed, and why. The person making the design infringement allegations needs to identify what product of yours allegedly breaches the design registration number they have provided to you and explain how the features of your product infringe upon the features of their design, taking account of their statement of newness and distinctiveness. They cannot just allege breach of a patent or design right, give you a patent or design registration number and then say no more, as otherwise how are you to know which product of yours supposedly infringes on this patent or registered design, and why they think so? Details are vital. This is where AI falls short, and human input comes in.
If there is no detailed explanation of what allegedly amounts to the infringement, it is appropriate to reply to the correspondence, stating that you cannot properly investigate the allegations until you are made aware of the specifics of the allegations and provided with evidence to demonstrate the allegations. Note: Asking them to provide evidence will prompt them to gather it, and that gathered evidence will then help them to substantiate their case. So, consider carefully whether there is infringement, prior to encouraging the other party to provide evidence.
- Look to see if there is anything you are doing that is wrong. If you accidentally crossed a line, then you could take that content down. Sometimes a quick rectification of the issue together with a ‘without prejudice’ (emphasis on the without prejudice!) apology can go a long way. This is an apology that is offered without admitting legal liability. Intellectual property disputes are expensive, and people rarely want to spend the money once the other party has ceased the infringement.
- When a party makes the allegations themselves, it may be appropriate to advise them of your usual registered attorney or specialist intellectual property lawyer’s contact details, and ask the person making the allegations to engage a registered attorney or specialist intellectual property lawyer themselves and have their specialist contact your specialist. That way, it should weed out someone who isn’t serious enough about the allegations to incur the expense of engaging a registered attorney or specialist intellectual property lawyer to prepare the allegations properly and send them to your specialist. If they won’t put their money where their mouth is, why should you have to spend your money responding to them?
- If in doubt, engage a registered attorney or specialist intellectual property lawyer without delay. Spending a bit of money on quality advice early on, can save you much more in time and expense down the track. You can get a list of registered attorneys from the TTIPAB website here(Opens in a new tab/window). Some of them will also be qualified lawyers, which can be helpful where the allegations include copyright infringement, defamation or other broader legal issues than pure industrial property (patent, trade mark, and design) infringement allegations, or where complex settlement or co-existence agreements are anticipated. That said, if you choose to go with a lawyer, look for one that has dual qualifications as a registered patent or trade marks attorney as well. That way, you will know whether they truly specialise in intellectual property law.
Final thoughts
Good luck! And use the golden rule. If you don’t want to get hit with AI generated garbage, don’t send it either. Registered attorneys and specialist intellectual property lawyers are indispensable in ensuring all SMEs send and receive only vetted and substantiated correspondence and aren’t forced to waste their money and time on complete drivel.
Further reading
If you are interested in learning more about what to consider if you have been accused of IP Infringement you might like to visit Receiving a letter of Demand | IP First Response