The Explanatory Memo for the Designs Amendment (Advisory Council on Intellectual Property Response) Bill 2020 (Cth) states
The objective of the intellectual property (IP) rights system is to support innovation by encouraging investment in research and technology in Australia, and by helping Australian businesses benefit from good ideas. The Australian Government proposes improvements to Australia’s designs legislation to better meet these objectives.
The current designs system has been in operation since the commencement of the Designs Act 2003 (Designs Act) on 17 June 2004. Concerns have been raised about the effectiveness of the designs system and whether it is meeting its original policy objectives.
In May 2012, the former Advisory Council on Intellectual Property (ACIP) was asked to investigate the effectiveness of the designs system in stimulating innovation by Australian users and the impact the designs system has on economic growth. As part of its investigations, ACIP released an issues paper in September 2013 to seek views from stakeholders, including users of the designs system. ACIP released an options paper for public consultation in December 2014 and a final report in March 2015 (‘the ACIP report’).
On 6 May 2016, the Australian Government responded to the ACIP report and agreed to the majority of the recommendations. This Bill gives effect to several ACIP recommendations that were accepted by the Government, as well as making other improvements to the designs system.
The purpose of the Designs Amendment (Advisory Council on Intellectual Property Response) Bill 2020 (the Bill) is to provide more flexibility for designers during the early stages of getting registered design protection, and to make several technical amendments that will simplify and clarify aspects of the designs system.
The Bill’s proposed amendments to the Designs Act are divided into seven categories, corresponding to the following seven schedules:
- Schedule 1 – Grace period
- Schedule 2 – Infringement exemption for prior use
- Schedule 3 – Registration of designs – removal of publication option
- Schedule 4 – Relief from infringement before registration
- Schedule 5 – Right of exclusive licensee to bring infringement proceedings
- Schedule 6 – Formal requirements
- Schedule 7 – Other amendments
Schedule 1: Grace period
Recommendation 12 of the ACIP report was: “ACIP recommends introducing a grace period of six months before the filing date, together with a prior user defence. Applicants who rely on the grace period to protect the validity of their design rights should be required to file a declaration to that effect.” The Government accepted this recommendation, noting that the length of the grace period and the requirement to declare any disclosures would be determined following further stakeholder consultation.
This Schedule amends the Designs Act to give effect to that recommendation by providing designers a 12-month grace period to apply for design protection after publishing or using their design, helping protect them from losing their rights through inadvertent disclosure.
Schedule 2: Infringement exemption for prior use
Recommendation 12 of the ACIP report also included a recommendation to introduce a prior use defence for third parties who start using a published design during the grace period. In accepting Recommendation 12 the Government agreed to introduce a prior use defence along with the grace period.
This Schedule amends the Designs Act to give effect to the recommendation by introducing an infringement exemption for prior use, which will protect third parties against infringement proceedings if they start using a design before the priority date of the design registration. This aims to balance the rights of designers and those of third parties that start use of a design that has been disclosed during the grace period but not yet registered, or that is created independently. The amendments in this Schedule are modelled on analogous prior user exemption provisions in the Patents Act 1990 (the Patents Act).
Schedule 3: Registration of designs – removal of publication option
Recommendation 5 of the ACIP report was: “ACIP recommends removing the option of the publication regime (i.e. without registration) from the designs process.” The Government accepted this recommendation, stating that the amendment to implement this recommendation would be one of a number of changes to streamline IP processes and support small business. Recommendation 9 of the ACIP report was: “ACIP recommends automatic publication at six months after the filing date, with the possibility to request publication earlier if desired, and with an amendment to the innocent infringer defence in subsection 75(2) of the Designs Act.” The Government noted this recommendation, stating that further consultation with stakeholders is required to consider any unintended consequences. This Schedule amends the Designs Act to give effect to these recommendations by streamlining the initial steps for registering a design. The changes allow applicants to effectively delay publication of their design for a prescribed period (to be six months) from the priority date. The seldom used “publication only” option is eliminated. Registration of designs is automatically requested after the expiry of a prescribed period from filing a designs application – currently, an application lapses after the expiry of this period.
The overall impact will be to reduce the number of deadlines requiring action by applicants while making it simpler for them to delay publication of a new design until they are ready to launch in the market.
Schedule 4: Relief from infringement before registration
Recommendation 9 of the ACIP report also included a recommendation to amend the innocent infringer defence in subsection 75(2) of the Designs Act. The Government noted the recommendation, stating that further stakeholder consultation by IP Australia was required to consider any unintended consequences.
Following further consultation this Schedule amends the Designs Act to give effect to that recommendation. The amendments will correct an anomaly that means relief for “innocent” infringers has not been available when infringement occurs between filing and registration. The amendments will allow courts to provide discretionary relief to innocent infringers in this period. This will reduce the risk to competitors from infringing a design they could not have found on the Register of Designs, because it was not yet published.
Schedule 5: Right of exclusive licensee to bring infringement proceedings
Recommendation 18(h) of the ACIP report was: “The Designs Act and/or the Designs Regulations 2004 should be amended to ensure exclusive licensees have the right to bring proceedings for infringement.” The Government accepted the recommendation.
This Schedule amends the Designs Act to provide exclusive licensees with the legal standing to take infringement action through the courts without needing to rely on the registered design owner. Currently, only a registered owner of a design has standing to commence infringement action. When an exclusive licence is granted, it is often because the registered design owner is foreign based. A foreign based owner may not be strongly motivated to assist the exclusive licensee in pursuing a local alleged infringer due to associated costs or administrative burden. This proposal would ensure exclusive licensees of registered designs are able to enforce the rights that they have paid for, as is the case for patents, trade marks and plant breeder’s rights. (Patents Act 1990 s 120(1); Trade Marks Act 1995 s 26(1); Plant Breeders Right Act 1994 s 54(1))
Schedule 6: Formal requirements
This Schedule amends the Designs Act to streamline the process for updating formal requirements for a design application in line with the current environment of fast-paced technological change. Currently, the formal requirements are set out in the Designs Regulations 2004 (Designs Regulations) and are based on a paper filing system. At present 99% of design applications are filed electronically, meaning the formal requirements in the Designs Regulations are no longer fit for purpose.
The amendments will extend the existing power (Designs Act 2003, s 144B.) of the Registrar of Designs (Registrar) to make directions about the form of documents to apply to “approved forms” for designs so that applicants need only to refer to a single source of rules. The amendments will also allow the Registrar to specify formalities requirements for design applications by written determination, which will allow the rules to be easily adapted to keep pace with changing technology.
Schedule 7: Other amendments
Schedule 7 to the Bill will make several minor technical corrections and improvements to the Designs Act in relation to the following accepted ACIP recommendations:
- Part 1: Standard of the informed user (ACIP Recommendation 10)
- Part 2: Revocation of registration of design (ACIP Recommendations 18c and 18f)
- Part 3: Renewal of registration of design (ACIP Recommendation 18i)
Collectively, the measures in this schedule are proposed to address a small number of inconsistencies in the Design Act. The changes will simplify the designs system for users and clarify parts of the system that may be confusing.