The Designs Amendment (Advisory Council on Intellectual Property Response) Act 2021 (the Amendment Act) received the Royal Assent on 10 September 2021. A summary of the changes hse been published here by IP Australia.
The Amendment Act puts in place a number of provisions summarized below, all of which, apart from the grounds of revocation described below that are already in force, commence on 10 March 2022.
Schedule 1 of the Amendment Act sets out that a person deciding whether a design is new and distinctive must disregard various publications or uses that occur in a period of 12 months ending on the end of the day before the priority date in relation to the design. These publications or uses include:
- a publication or use of a design (which may or may not be the design itself) by a relevant entity;
- a publication or use of a design (which may or may not be the design itself) by another person or body that derived or obtained the design from a relevant entity.
A “relevant entity” is the registered owner of the design or any predecessor thereof, or the person who created the design.
This brings our designs legislation into line with our patents legislation that includes a similar grace period provision.
Designs relate to those features that appeal to the eye. This means that it is usually not appropriate to file an application to register a design at the prototype stage of a commercialization process. Rather, in most cases, it is best for the application for registration to be filed once the product is ready to go to market. Without the grace period, this can place an undue burden on a designer.
The Grace Period will only apply to publication or use that commenced on or after 10 March 2022.
Infringement Exemption Prior Use
Section 71 of the current Designs Act sets out the various acts which constitute the infringement of a registered design. With regard to a product in relation to which the design is registered, these acts include:
- making or offering to make the product;
- importing the product into Australia for sale, or for use for the purposes of any trade or business;
- selling, hiring or otherwise disposing of, or offering to sell higher or otherwise dispose of the product;
- using the product in any way for the purposes of any trade or business; and
- keeping the product for the purposes of doing any of the above acts.
Currently, there is no protection for third parties who may infringe a registered design by performing these acts before the priority date of the registered design.
Schedule 2 of the Amendment Act sets out that a person may do any act that would infringe the registered design if, before the priority date of the design, the person had:
- a) made a product, in relation to which the design became registered, which embodied a comparable design that was identical to, or substantially similar in overall impression to, the design that became registered; or
- imported such a product into Australia for sale, or for use with the purposes of any trade or business; or
- sold, hired or otherwise disposed of such a product; or
- used such a product in any way for the purposes of any trade or business; or
- kept such a product for the purpose of doing any of the above things; or
- the person had taken definite steps, contractually or otherwise and whether or not in Australia to do any of the above acts.
There are some limitations to this protection. For example, the third party is not entitled to such protection if the comparable design was derived from the person who became the owner of the registered design, or created the registered design.
Streamlining of Registration Process
Currently, it is possible to file a request to publish a design without registration. It is also possible to file an application without a request for registration. In that case, registration must be requested within six months, or the application will lapse. Generally, an application for design registration results in publication of the design within about a month of the filing date. This option allows an application to delay publication for a period of six months. However, it results in the burden of dealing with an additional deadline.
Schedule 3 of the Amendment Act removes the option to request publication without registration and streamlines the application process. It will be possible to file a request for registration with the design application or during a six-month period after the design application is lodged. If the request for registration is not made during this six-month period, the design will automatically proceed to registration. If the applicant does not wish the design to be published then it can request a withdrawal of the application within the six-month period. Thus, it will be possible for an applicant to delay publication for a period of six months without the administrative burden of meeting a deadline for requesting registration.
Relief From Infringement Before Registration
Schedule 4 extends the “innocent infringer” defence. This defence prevents third parties from being liable for infringing the design when they do not know that the design is registered. The defence will also apply to the six-month period between the filing date of the design application and the date of registration. During that period, the design is not published and so a third party would not know that the application for design registration existed.
Right of Exclusive Licensee to Bring Infringement Proceedings
Schedule 5 allows an exclusive licensee of a registered design to commence legal proceedings against third parties for infringement. Currently, only a registered owner has standing to commence an infringement action, but no other person. This change is appropriate because the exclusive licensee is the party with the exclusive right to exploit the design and would suffer the most harm from infringement.
Currently, under sections 39 and 40 of the Designs Act, the design must meet a formalities check before registration can take place. The regulations set out a list of requirements for those formalities. Those requirements are set out for a paper-based regime, which is now outdated.
Schedule 6 empowers the Registrar of Designs to determine the formal requirements by a non-legislative instrument. This updates the regime and gives it flexibility to accommodate the electronic filing practices.
Standard of the Informed User
When comparing designs for validity or for infringement, the question is whether one design is substantially similar in overall impression to another design. Currently, the standard used is that of the “informed user”. Two approaches have been taken. One approach identifies potential users of the product to which the design relates and then selects users from that group who are “informed” as to the product to which the design relates. The other approach considers the expression “standard of the informed user” simply as a label. This approach requires that the standard is “a person who is familiar with the product to which the design relates, or products similar to the product to which the design relates”. Recent case law suggests that the second approach is the correct one. However, the first approach has never been authoritatively rejected.
The Amendment Act replaces the standard of the informed user with a standard of a “familiar person” and qualifies such a familiar person as including persons that are not necessarily users of the product to which the design relates. We should see some interesting case law develop around this concept. This change does bring some clarification to the approach that should be taken when comparing designs.
Grounds for Revocation
The Amendment Act introduces some changes to the grounds for revocation. One of these involves “lack of entitlement”. Currently, section 13 of the Designs Act identifies who is the first owner of the design before registration and is therefore entitled to apply for the registration of that design. If a dispute arises regarding entitlement to own after a design has been examined and certified, a person can seek revocation of a registered design on the grounds that one or more registered owners is not an entitled person. The Amendment Act provides the court with the discretion to refuse revocation as a result of lack of entitlement. This will bring the designs legislation into line with our patents legislation.
The changes to the designs legislation are to be welcomed. The recent demise of the innovation patent system will no doubt see a rise in the number of applications for design registration. The streamlined approach of the Amendment Act should ease the burden on both the Designs Office and us practitioners.