On 2 December 2020, the Designs Amendment (Advisory Council on Intellectual Property Response) Bill 2020 (the Bill) was introduced into the Senate and is currently before Parliament for consideration.
The Bill includes proposals that will amend the Designs Act 2003 (the Act) to implement several recommendations accepted by the government made by the former Advisory Council on Intellectual Property’s (ACIP) Review of the Designs System (ACIP Report).
The Bill is divided into 7 schedules:
- Schedule 1 — Provides a period of 12 months for filing a design application after it is first disclosed.
- Schedule 2 — Protects third parties from infringement of designs if they started using a design before an application for registration is filed.
- Schedule 3 — Removes the option to publish a design without registration and simplifies the process of requesting registration.
- Schedule 4 — Protects ‘innocent infringers’ who infringe a design between filing and registration but have no way to know the design is protected.
- Schedule 5 — Allows exclusive licensees of design rights to take action against infringers without needing to rely on the design’s owner.
- Schedule 6 — Streamlines the process for changing and specifying formal requirements for design applications.
- Schedule 7 — Makes minor technical changes to clarify some matters in designs legislation.
If the Bill passes Parliament, the various schedules of the Bill will commence:
Schedules 1 to 6
Schedule 7 Part 3
|6 months after the Bill receives the Royal Assent|
|Schedule 7 Parts 1 and 2||The day after the Bill receives the Royal Assent|
Schedule 1 will introduce a 12-month grace period for filing a design application. The grace period will protect designers who publish their design before filing for protection. This could be done accidentally, or because they did not know that they needed to file for protection before publishing. Disclosures made up to 12 months before the priority date will be disregarded when examining a design for newness and distinctiveness.
Designers must file for a design right within 12 months of disclosure to receive the benefits of the grace period. For example, this means a designer who may unintentionally publish a design on social media, will still be able to seek protection for their design within 12 months.
If the design is owned by a person other than the designer (e.g. an employer, or a successor in title), disclosures of the design by those bodies may also be disregarded under the grace period. Disclosures derived from the designer or owner can also be disregarded, even if not directly published by the designer or owner (e.g. publication by a marketing company authorised by the owner).
Publications of designs by the Registrar of Designs, and by foreign and international designs offices, will not be eligible for the grace period.
Schedule 2 will introduce an infringement exemption to protect third parties against infringing someone else’s design if they start using a design before the priority date of a registered design.
The purpose of this reform is to balance the rights of designers and third parties after the introduction of the grace period, given that third parties may not be aware of a designer’s intent to file a design application within the 12-month grace period. It also protects designers who independently create but do not register a design.
A person who starts using a design before the priority date of its application for registration will be able to continue using, making, importing and selling products in respect of which the design is registered without infringing the design right.
Users who have legally acquired products from a prior user will also be able to use or sell on those products without infringing the design. However, these acquirers will not gain rights to make or import such products. They will also not have the right to use or sell such products other than those acquired from a prior user or the owner of the design.
Schedule 3 will streamline the application and registration process for designers. The option to publish a design without registering it will be removed. All design applications will continue to be published on registration.
Applicants will be able to file a request for registration with the design application or during the 6- month period after the application is lodged. If a request is not made in this time, the design will automatically proceed to registration 6 months after the filing date.
If an applicant does not wish for the design to be registered, they must request withdrawal of the application within the 6-month period.
The following diagram sets out how the new application and registration process will work:
Schedule 4 will extend the current ‘innocent infringer’ defence to provide relief from infringement to third parties who may unknowingly infringe a design registration in the period between the filing date of a design application and the date of registration.
During this period between filing and registration, the design is not publicly available on the Register of Designs. This means that even a third party conducting a diligent search may not be able to know that a design has been protected and there is a risk of infringement.
To benefit from the defence, an alleged infringer must demonstrate that they did not know, and had no reasonable way to know, that an application for design registration existed. The defence will therefore not apply where a designer has advised the public of their intent to seek design registration or otherwise puts alleged infringers on notice about the design application.
In such cases of innocent infringement, a court will now have the discretion to refuse to award damages, reduce damages or refuse to award an account of profits.
Schedule 5 will give exclusive licensees the right to bring infringement actions under the Act. An exclusive licensee is a person who has licensed all the rights in a design in Australia to the exclusion of all others, including the owner of the design.
Currently, only the owner of a design has the right to bring infringement proceedings. This change will ensure exclusive licensees can enforce the design rights that they have paid for and licensed, as they are likely to suffer the most harm from a design infringement.
When an exclusive licensee starts infringement proceedings, the owner will have to be joined to proceedings as a defendant, unless they are joined as a plaintiff. This serves to inform the owner about the proceedings and gives them the option of playing a role or not.
Schedule 6 will streamline and modernise the process for updating the formal requirements for design applications, allowing the rules to be easily adapted to keep pace with changing technology.
This amendment will give the Registrar of Designs the power to specify formal requirements for design applications by written determination, replacing the currently outdated requirements.
IP Australia will publish a determination about formality requirements before commencement of this Schedule.
Schedule 7 will make several minor technical corrections and improvements to the Act to clarify and simplify the designs system. There are three parts to the Schedule:
Part 1: Standard of the informed user
Part 1 will clarify the standard used when judging if one design is substantially similar in overall impression to another. The changes will clarify that the standard applied is that of a person who is familiar with the product, regardless of whether that person is a user of the relevant product.
Part 2: Revocation of registration of design
Part 2 will clarify the circumstances when a registered design can be revoked. Registration can now be revoked as a result of all acts of fraud, false suggestion or misrepresentation, irrespective of whether such acts occur during the certification or registration phrase.
This Part also provides the courts with discretion to refuse revocation as a result of a lack of entitlement to own the design. For example, if the lack of entitlement is due to a genuine error and the entitled person has been identified, the court could order the Register of Designs be corrected to reflect the proper ownership.
Part 3: Renewal of registration of design
Part 3 will clarify that a design does not cease during the 6 months available for payment of a renewal fee (the renewal grace period), provided the fee is paid within that time. If a design owner does not pay the renewal fee within the renewal grace period, the design registration will cease five years from the filing date, not on the expiry of the renewed grace period.
This reflects how designs are recorded on the Register during this time as ‘registered – in grace period’.
The Bill will be supported by amendments to the Design Regulations. Schedule 1, 2, 4 and 5 make amendments consequential to the changes made by the Bill.
Schedule 3 will amend the Design Regulations to provide consistency between entitlement to own a registered design in the Act and the entitlement to make an application under the Paris Convention.
ACIP consulted extensively on these issues as part of its review of the designs system.
In 2019 we sought stakeholder views on several options that implement those recommendations accepted by the government from the ACIP Report.
In 2020 we released an exposure draft of the Bill and regulations to seek stakeholder views.