The Designs Amendment (Advisory Council on Intellectual Property Response) Bill 2020 (the Bill) amends the Designs Act 2003 in response to a 2015 report by the former Advisory Council on Intellectual Property (ACIP). The Bill follows a series of public consultations and Government responses on the Australian designs system between 2013 and 2020.
The Bill was deemed non-controversial and passed the Senate without amendments on 4 February 2021.
The Explanatory Memorandum states that the financial impact of the Bill is expected to be nil.
A ‘design’ refers to the overall appearance of a product resulting from one or more of its visual features. Design rights can be protected under the Designs Act. IP Australia, the Government agency that administers the Designs Act, explains that design rights protect the visual appearance of a whole product that is new and distinctive and has a physical form that is manufactured or handmade and produced on a commercial scale.
An application for a design right must be filed with IP Australia to gain a priority date and it remains confidential for up to six months. Then, once the design is registered under the Designs Act it will be published and an owner will have the exclusive right to use and authorise others to use the design in Australia, and the right to licence or sell the design and to apply for overseas protection. However, to enforce those rights a design must be examined to ensure that it is new and distinctive, and then certified.
Designs, as a part of Intellectual Property (IP), is an area of law and commerce that deals with government sanctioned monopolies. This means that there will always be competing stakeholder interests. For example, some creators will desire greater protection for their original works, either in scope, nature or length of time, while third parties may wish for narrower protections to permit easier development of their own ideas or freer use of publicly available ideas. The Government’s role is to strike a balance between offering enough protection for creators and owners to encourage and reward innovation and providing the public with sufficient access to the information. This means no regulatory setting will ever fully satisfy all parties.
The amendments in the current Bill were first considered during ACIP’s Review of the Designs System conducted over 2012-15. This Review included stakeholder consultation on an Issues Paper to identify areas of designs law that required updating or change. The Final Report of this review was published in March 2015.
The Government published a response to the recommendations of the ACIP review in May 2016. Following this there was a period of consultation on the accepted recommendations held in October to December 2019. IP Australia published a response to this consultation in May 2020.
IP Australia then released an Exposure Draft of the Bill last year, consulting on this draft from July to August 2020. The submissions to that consultation are available. IP Australia then published its Response to this public consultation in October 2020, outlining which outstanding concerns would be addressed and which would not, with reasons.
Amendments to the Designs Act
The Bill introduces a number of changes to the operation of the Designs Act in response to the concerns raised by the ACIP report and subsequent consultations.
Schedule 1 amends the provision of the Designs Act that sets out a grace period during which prior publications of a design are to be disregarded when deciding whether a design is new and distinctive. This is intended to protect designers from losing their ability to seek protection due to inadvertent disclosures of their design before they file an application for a design right, while still ensuring that people cannot generally gain protection for designs that are already publicly known. The changes increase the grace period between inadvertent publishing and filing an application from six months to twelve, in line with similar protections in other countries.
ACIP recommended that a defence for prior users be introduced as an accompaniment to a grace period, to deal fairly with the uncertainty created for third parties who would not know if a published design was going to be registered at a later time. Schedule 2 responds to that recommendation by introducing a new infringement exemption for third party use that occurred before the priority date of the design. The priority date is usually the date that the application for a design right is filed, in Australia or another relevant country.
Infringement occurs where a third party uses a design right without the authority of the owner, for example by making or selling a substantially similar product. In these circumstances the owner of a certified registered design may commence legal proceedings to protect their rights.
The new exemption will prevent infringement actions taking place in circumstances of prior use, rather than providing a defence against such actions, and is modelled on a similar provision in the Patents Act. The exemption provides that there is no infringement if a third party made, imported, sold/hired, used or kept a product for certain purposes that would have infringed the registered design, so long as those actions were occurring before the priority date. This exemption extends to where a person has, prior to the priority date, taken ‘definite steps’ to do one of the listed acts.
Schedule 3 makes amendments so that a request to register a design is made automatically if a design applicant has not requested registration of their design within a prescribed period or otherwise withdrawn their application. This is intended to reduce inadvertent lapsing and reduce complexity — currently filing a design application and requesting registration are separate steps and an application will lapse if registration is not requested within six months. Schedule 3 will also provide for automatic and delayed publication for design applications, which occurs after registration. This publication delay was recommended by ACIP as some applicants may wish to keep their design confidential until they are ready to launch it in the market.
Schedule 4, added following the consultation on the Exposure Draft, provides the ability for a court to grant relief from infringement actions where the infringement occurs after the filing of a design application but before its registration date. During this period, which may be up to nine months, the design is not publicly available, so a person who uses the design at this time may not be aware that another person is seeking to protect it. The relief may be that the ‘innocent infringer’ pays reduced or no damages, or is not required to pay an account of profits. The relief is only available where the defendant was not aware, and could not reasonably be expected to have been aware, that an application had been filed for the design.
Schedule 5 introduces amendments so that an exclusive licensee, that is a person granted exclusive rights to use the design by the registered owner, is able to bring infringement proceedings against third parties under the same provisions of the Designs Act that a registered owner is currently able to use. Exclusive licensees already possess these rights under other IP legislation, including the Patents Act 1990 and the Plant Breeder's Rights Act 1994.
Schedule 6 removes the need for formal requirements for design applications to be set out in the regulations and gives the Registrar of Designs the ability to determine these requirements by written instrument. While such determinations would not be a legislative instrument, and so are not subject to parliamentary disallowance, they would only relate to requirements for formalities for applications, rather than any substantive requirements for designs.
Various parts of the Designs Act require the use of the standard of a hypothetical ‘informed user’ as a method of assessing whether one design would be considered to be substantially similar in overall impression to another design. Schedule 7 removes the standard of the ‘informed user’ and substitutes instead the standard of a person familiar with the product or similar products. This new standard removes the term ‘user’ from the definition to remove any ambiguity, in response to disagreement over whether a relevant ‘informed user’ had to have actually used the product or just be familiar with it. Schedule 7 also makes some other minor technical amendments.
IP Australia has stated that further designs reforms are being considered in response to other issues raised in the submissions.