The Designs Amendment (Advisory Council on Intellectual Property Response) Bill 2020 (“the Bill”) was introduced into the Senate on 2nd December 2020.
As reported in our earlier article, the Advisory Council on Intellectual Property (“ACIP”) had released its Final Report after investigating the current Australian designs system. The recently introduced Bill now outlines the proposed legislative changes to the Australian Designs Act 2003. Some of the most significant amendments have been discussed below.
Grace period
In our view, introduction of a 12 month grace period to allow a design to be filed within 12 months after disclosure is a significant change and an important step forward in Australian Designs law. Designers who inadvertently disclose their design prior to seeking design protection will now be protected.
It is interesting and somewhat ironic that inventors have enjoyed a 12-month grace period under the Australian Patents Act for many years but no such provisions have been available for Australian design applicants.
Many overseas jurisdictions particularly Europe and the USA provide a 12-month grace period in their designs law. This change will therefore align Australian designs law with many of our important trading partners and allow foreign design owners to validly file an Australian design where those applicants have validly filed a home design application by availing the grace period provisions of their home jurisdiction.
There are some important exceptions to the Grace Period provisions that should be noted by foreign applicants looking at filing Australian Designs. In contrast to the grace period provisions of the Patents Act, the new grace period will not be applicable to official publication of the design by a foreign designs office. Therefore, if an applicant is too late to claim convention priority, then it will not be able to file a “late” design into Australia if an intervening official publication has occurred before the filing of the Australian design. Given that official organisations such as IP Australia and EUIPO routinely publish designs within a few weeks of lodgement, the designs grace period will be a pale imitation of the existing patents grace period.
It has also been clarified that new grace period provisions will not be retrospectively enforced. In other words, the grace period will only be applicable to publications or disclosures after the date of commencement of the amendment of the Designs Act 2003.
Prior use infringement exemption
The Bill also sets out legislative provisions to allow exemption of a person from registered design infringement if that person used, or had taken steps to use, the subject design before the priority date of the design.
These provisions have been necessitated as a result of the new grace period provisions. Once the grace period provisions become enshrined in Australian designs, it is likely that many parties will find themselves in a position where they have adopted (used or taken steps to use) a prior disclosed or published design which ultimately registered as a design under the “grace period” provisions.
Standard applied in designs comparison to be that of a “familiar person”
The current Designs Act relies on the concept of the “informed user” in Australian designs law which was adopted from the Registered Designs Act 1949 (UK).
The “informed user” is currently the standard used when deciding, for example, if one design is substantially similar in overall impression to another design .
Australian courts had been relying on decisions under the UK Act and under European law to provide guidance in determining the standard of the informed user. However, in a relatively recent decision, the Federal Court of Australia in Multisteps Pty Limited v Source and Sell Pty Limited (“Multisteps”) considered European and UK case law and concluded that the standard of the “informed user” is not specifically provided in European legislation. In the ‘Multisteps’ decision, Justice Yates concluded that the ‘informed user’ does not need to be a user of the product protected by the design.
The proposed changes to the Designs Act 2003 will amend the required standard to a “familiar person”. The amendments describe the “familiar person” in a similar manner as the “informed user” with the qualifying statement “whether or not the familiar person is a user of the product to which the design relates or of products similar to the product to which the design relates”. The purpose of the amendment is to increase certainty in litigation and potentially reduce expert witness costs. The Multisteps decision is already the preferred approach in the courts but amending s 19(4) to clarify this is expected to eliminate doubts as to its correctness.
Removal of requesting registration
The current design filing regime requires an applicant to expressly request registration either at the time of filing a design application or within a six month period from the priority date. Once registration is requested, the design application undergoes formalities examination before being registered and published. The present system allows the applicant to defer registration for a six-month period commencing from the priority date of the design application. If registration is not requested within this period, then the design application automatically lapses. In many instances, the lapsing of a design application through lack of requesting registration is unintentional and the amendments address this issue.
Under the proposed provisions, the applicant will be taken to have requested registration, at the end of the six-month time limit if no registration request has been submitted. This new provision will prevent unintentional lapsing of design applications, which we welcome
Removal of option to publish (rather than register) design
The present Designs Act allows a design applicant to request publication (instead of registration) of a design application at the time of filing the application. This option had originally been provided to allow design applicants the opportunity to use this official publication as a defensive strategy because such a publication would place the design in the “prior art base” and could be used for establishing grounds of revocation of a subsequently filed design or patent application. Since this option has not been extensively utilized, this option will no longer be available.
Design applicants will continue to have the option of requesting registration, as discussed above, which would automatically trigger publication once the application has passed formalities examination.
Changes in Provisions related to Revocation and Infringement
Revocation Related Changes -The current Designs Act allows a Court to revoke a design registration that “was obtained by fraud, false suggestion, or misrepresentation”. However, the current Act has no provisions that expressly cover acts of fraud, false suggestion or misrepresentation after registration of the design.
There can be many scenarios in which fraud, false suggestion or misrepresentation can occur after registration of the design application. Registration of Australian designs is relatively quick and can happen in four to eight weeks if all formality requirements are met. Australian design applications usually undergo substantive examination many months or years after registration and it is believed that the current provisions of the Designs Act for design revocation do not cover acts of fraud, false suggestion or misrepresentation in such post-registration scenarios. The amendments will allow a Court to revoke a design registration on the ground that “the certificate of examination was obtained by fraud, false suggestion or misrepresentation”.
Innocent Infringement Provisions – Under the present Designs Act, if design infringement has been established, damages become payable over the entire term of registration which commences on the filing date. However, there is always a delay between the filing of the application and the registration and publication of the application. This time period can vary significantly. In some instances, where objections are raised against the design application during formalities examination, the time period between filing and registration can easily be a few months. Under the current legislative arrangement, a third party, held liable for design infringement, would accrue damages over the entire registration term including the period between the filing date and registration date when the design application would have been unpublished. Consequently, any infringement during this time period would occur without the third party’s knowledge of the design application since it was unpublished. This is a particularly problematic aspect of the current Australian designs legislation and will be addressed as a result of the proposed amendments. The Act will be amended so that the Courts have discretion to not award damages against the infringing party when pre‑registration innocent infringement is established.
Exclusive licensees to bring infringement proceedings – Under the current Designs legislation, exclusive licensees of design rights do not have legal standing to bring proceedings for infringement. In contrast, exclusive licensees of patents, trade marks and plant breeder’s rights have the right to bring infringement proceedings under certain conditions.
The proposed changes to the Designs Act will allow exclusive licensees of a design registration to have standing to bring infringement proceedings and make Australia’s design system more consistent with patents, trade marks and plant breeders rights in this regard.
Timing and Implementation of the Proposed Changes
Australia’s Federal Parliament consists of two houses, namely the Senate and the House of Representatives. The Amendment was introduced in the Senate on 2nd December 2020. The Bill will need to pass both houses of the Federal Parliament before receiving Royal Assent. We expect the Bill to go through both houses and receive Royal Assent by end of 2021 after which a commencement date for the amended Designs Act will be confirmed.
Expect more updates from us soon as the Amendment makes its way through the Senate and House of Representatives.