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Companies alleging IP infringements often don't have a leg to stand on

Sending a warning letter can sometimes be an effective means of asserting your rights. But if that letter is based on non-existent intellectual property rights, sending it may, in certain circumstances, be illegal.

And this in turn can lead to what is called a “wapperverbod”, a concise term that exists in Dutch to signify an order prohibiting indiscriminate claims alleging infringement of IP rights. In practice, the courts are rather fond of issuing such bans. A case involving ships’ anchors provides a recent example.In the case in question, the company Vrythof, which makes anchors, believed that the anchors produced by its competitor Mooreast were an infringement of its IP rights. So Vrythof decided to write to Mooreast’s customers about this. In its letter, Vrythof suggested that it had previously brought proceedings against infringers of IP rights and won. In response, Mooreast went to court in order to obtain an interim injunction prohibiting Vrythof from sending unlawful warning letters.

Alleging infringements should not be taken lightly
Previous court rulings have deemed that the making of indiscriminate claims alleging the infringement of IP rights is unlawful if a warning letter is found to be unjustified and the writer of the letter knows or ought to be aware that there is a “serious, significant likelihood” that his right will not stand up to scrutiny or that there is no infringement.

In this case, the court took the view that Vrythof had given the impression in its letter that it was invoking IP rights. After all, Vrythof was stating that it had successfully taken action against third parties in IP rights cases. What is more, the court established that Vrythof does not hold any IP rights, such as copyrights. It also considered that Mooreast had incurred losses as a result of customers jumping ship following the warning letter.

So the moral is: think long and hard before sending a warning letter. Writing to an opponent’s customers is not recommended, particularly when, on the face of it, the case is not very strong. The damage this can cause is sure to come back to haunt the sender.