Designs

Design rights protect the visual features of a product that give it a unique appearance, such as its shape, pattern, configuration or ornamentation. In Australia, designs are registered without substantive examination. A design must be examined and certified by IP Australia for rights to be enforced. Additionally, the design must be new and distinctive to be eligible for protection – that is, it must be dissimilar in overall impression to designs that constitute prior art.

When design concepts are made public, they may be easily copied by imitators, in which case the original producers may not financially benefit from their design as much as they would otherwise. The owner of a certified design has exclusive rights to use, license and commercialise the design for up to 10 years, incentivising design innovation.

Design applications contain information about the form of products. As such, they provide valuable data on changes in design styles and their role in new product development¹.

Design applications, registrations and certifications

Applications for design rights in Australia fell by 3.6% to 7,836 in 2022. However, this follows a sharp 13.3% rise in applications in 2021, when they reached a record level (see Figure 3.1). The total for 2022 was 4.5% higher than the five-year annual average observed from 2016 to 2020.

Non-resident applications increased by 3.3% on their record 2021 level, to 5,703. In contrast, design applications by Australian residents fell by 18.1%.

Design registrations totalled 2,836 in 2022, a reduction of 5.3% from the record level they reached in 2021. IP Australia certified 1,242 design registrations, 9.8% fewer than in 2021. This follows a 38.0% increase in certifications in 2021. Certifications by non-residents fell 12.8% in 2022, and those by residents fell by 8.2%.

International design activity in Australia

A study commissioned by IP Australia in 2019 found that Australian design innovators tend to have a global focus. They compete at the cutting edge of industry through innovation, collaboration, responsiveness to customers and combining multiple types of IP protection. Design rights are used by businesses competing globally, often as part of global value chains; that is, they are used in commercialising components that form part of complex products sold by other companies in final markets².

Recovery in international filings

Non-residents account for 72.8% of all design applications in Australia. This proportion has increased by nearly 16 percentage points over the past decade, including a five percentage point increase in 2022. Globally, the number of designs included in international applications under WIPO’s Hague System increased by 11.2% in 2022 and reached a new record. In Australia, continued growth in non-resident applications partially offset a decline in resident applications in 2022 (see Figure 3.2).

Countries of origin

The leading overseas countries of origin for design right applications in Australia are the US (US applicants were named on 2,176 applications), China (856), the UK (346), France (240) and Germany (237)³. Apart from Germany, applications from each country increased from their 2021 levels, with a 7.5% increase for the US.

Over the past decade, applications naming residents from China have grown at an annual average rate of 32.1%. This includes a growth of 9.3% in 2022. China’s share of total applications has grown by a factor of six, from 1.8% in 2013 to 10.9% in 2022 (see Figure 3.3).

Hot spots for growth in Australian design applications have included France and the Republic of Korea. Applications from French residents increased by 137.6% in 2022. The Republic of Korea has experienced an average annual growth rate above 27.0% in the three years to 2021 and increased its share of total applications in 2022.

Domestic design activity in Australia

Economic characteristics of design-holding businesses

In Australia, around 590 active businesses held a domestic design right in 2020. Design right holders comprise less than one-fifth of the business population with patents. However, the use of design rights has become more extensive over time: as a proportion of all active Australian businesses, design rights holders have increased by around a third, from 0.011% in 2010–11 to 0.016% in 2019–20.

Previous research commissioned by Australia found that for Australian businesses in certain design-intensive industries (mostly concentrated in manufacturing), holding registered or certified designs is linked to higher productivity. Designs are also associated with higher R&D spend and exports. The findings suggest that the value of design rights stems from their use as part of a broad competitive strategy to manage the intangible aspects of products⁴.

On average, labour productivity was around 30% higher in median design-holding businesses than in median businesses without registered designs between 2010–11 and 2019–20 (see Figure 3.4). Further, over the half-decade to 2019–20, design rights holders improved their productivity at six times the rate of businesses without registered designs.

Source: BLADE, Australian Bureau of Statistics, 2022. Notes: Monetary values are reported in AUD (current prices).

Environmental and policy factors

Changes in product form often follow changes in function or provide the framework for technological advancement. An example is Apple’s iPad, which helped define the form in which tablets have developed. Design also has a role in technology adoption and commercialisation. Clever designs can create differences between products, shape their experience for people and convey information about the lifestyle of their users.

Previous studies have used design applications to measure the rate of change in design styles. They have shown that design activity varies across different stages of an industry’s development. In emerging industries, design innovation is intense because it can help build market acceptance for new technologies. In late-stage industries, design changes can help create differences between functionally mature products.

Given design’s role in adoption, it is likely that design filings react quickly to changes in expected demand as economic activity shows, similar to trade marks. Looking at quarterly trends in resident design filings (see Figure 3.5), application levels in 2022 (in black) settled lower than during the COVID-19 shock and the pre-pandemic period.

The 2022 decline in resident applications is most apparent relative to the pre-pandemic period: 2022 applications were fewer than in the pre-pandemic period but followed a similar over-the-year trend. COVID-19 may have accelerated pre-existing trends, including a shift in the industries that rely most heavily on the designs system.

Design classes

In Australia, designs are classified using the Locarno Classification, comprised of 32 product categories⁵. Traditionally, residents’ design filings have concentrated in several key classes: clothing, furniture and building materials. These are product sectors where proximity to the market can confer an advantage to local businesses. Non-residents have focused more strongly on technology-intensive sectors such as recording, telecommunications and data processing equipment. This pattern holds in design filings across jurisdictions⁶.

Recording, telecommunications or data processing equipment is a broad class that includes tablet computers, point-of-sale terminals, and screen displays and icons. In 2022, applications in this class grew by more than a third from their 2021 level (+37.3%, to 965), while applications fell across all other leading design classes (Figure 3.6). Likely contributing to this rise in applications was strong growth in IT and telecommunications adoption, up 2.8% in 2022⁷.

A substantial increase in the share of applications also occurred in Equipment for production, distribution or transformation of electricity. Over the first half of 2022, wholesale electricity prices in Australia’s National Electricity Market spiked as gas and coal prices rose due to the Russia-Ukraine conflict. Innovation in solar, electric vehicle and storage technologies is driving distributors to change the way they deliver electricity to end users⁸.

The strongest relative decline was in design applications for Clothing and haberdashery. Historically, Clothing manufacturing was the second most design rights-intensive industry in Australia⁹. However, over time, clothing has halved its share of total design filings, accounting for 9.7% of applications in 2013 and just 4.1% in 2022. Applications in this class fell by 32.6% to 325 in 2022.

Leading applicants

In 2022 the leading international applicant was Capital One Services (see Figure 3.7). This major US bank specialises in credit cards, auto finance and consumer and commercial banking. It has filed to register a portfolio of designs related to an electronic device and graphical user interface for card communication (165 applications). Second-ranked was Proludic, a French designer and manufacturer of sports, playground and fitness equipment (111 applications).

South Korean technology company LG Electronics was the lead patent filer in 2022 and ranked third for design applications (74 applications). A China-based company focusing on in-vitro diagnostic products, Zhejiang Orient Gene Biotech Co., followed with 73 applications. Fisher and Paykel Healthcare, a producer of respiratory care products, rounded out the ranks with 66 applications.

Phoenix Industries, a producer of tapware, showers and bathroom accessories, led domestic design filers in 2022 (45 applications). The company entered the ranks of top filers in 2021 (see Figure 3.7).

Australian-based fashion house Zimmermann Wear moved from first to second position with 43 applications. Zimmerman filed 29.5% fewer design applications in 2022 than in 2021.

Schneider Electric, which specialises in energy management products, systems, and solutions, is new to the list of lead filers. Their 37 applications in 2022 include filings for the design of electric vehicle charging stations.

Australian Honeybee (now named HiveiQ) was ranked fifth with 17 design applications for its Australian-manufactured beehive system. The company has protected its product system and brand through a combination of patents, trade marks and design rights.

Australian filings overseas

According to the latest available WIPO data, in 2021, Australian applicants filed 2,989 classes in design applications abroad – a record number and 34.3% more than in 2020¹⁰. On average, in the five years to 2021, Australian design class filings abroad have grown by 17.1% each year.

The leading destination markets for Australian designs were the UK, US, EUIPO, New Zealand and China (see Figure 3.8).

Source: WIPO IP Statistics Database

Hot spots for growth include the UK, where Australian residents tripled their design count between 2020 and 2021, from 164 to 705, and the Republic of Korea, which saw 152.6% growth in 2021.