Changes to the design system under consideration set to benefit Australian Designers – Designs Amendment (Advisory Council on Intellectual Property Response) Bill 2020

As we kick off 2021, Australian designers may soon be bringing in the New Year with new design laws. The Designs Amendment (Advisory Council on Intellectual Property Response) Bill 2020 (the Bill) was introduced on 2 December and is currently before Parliament for consideration. The Bill was the outcome of recommendations from the former Advisory Council on Intellectual Property (ACIP).

If passed, it will provide more flexibility and leniency for designers during the early stages of the registration process. With COVID-19 continuing to significantly dampen the confidence of designers and investors, these amendments are particularly timely. However, while these procedural changes aim to create greater certainty and improve capacity, there is potential for competition to be hindered by the operation of these reforms.

In this note we summarise the key proposed amendments to the Designs Act 2003 (Cth) (‘the Act’) and comment on the overall implications for key stakeholders.

i) Extended grace period

The Bill is set to provide greater leniency for inadvertent disclosure by expanding the grace period to 12-months. Inventors currently have a 6-month grace period for disclosure of a proposed design prior to registration, to address the risk designers face of losing their registerable rights as a result of inadvertent disclosure, for example via a post on social media

This extended grace period is in line with the grace period provided to patent applicants in Australia and will also align Australian design legislation with international norms.

ii) Infringement exemption for prior use

The Bill foreshadows the potential that extending the grace period will introduce uncertainty into the design space, given that third party users may not be aware of a designer’s intent to file a design application during this 12-month grace period. Under the proposed system a third party who commences using a design prior to the priority date will be able to continue using, making, importing and selling products in respect of which the design is registered, without infringing the design right. Though this infringement exception aims to balance the rights of designers and third parties after the introduction of the grace period, it may be practically difficult to implement.

Similarly, the Bill proposes to extend the current ‘innocent infringer’ defence to encompass third party users who may unknowingly contravene a design registration during the period between filing and registration, where the design is not visible on the designs register.

iii) Streamlined registration of designs and removal of publication-only option

The Bill also aims to streamline the initial process for registering a design to reduce the number of deadlines an applicant must action. In essence design applicants will now have two clear options at the time of registration:

1)     file a request for registration with the design application; or

2)     file a request for registration during the 6- month period after the application is lodged.

If a request to register is not made in this 6 month period, the design will automatically proceed to registration unless the applicant specifically requests that the design is not registered.

These changes do away with the option to request publication only of a design, which was rarely used by applicants.

iv) Rights of the exclusive licensee

Finally, the Bill also notably proposes that an exclusive licensee of a registered design be empowered to commence legal action against third parties for alleged infringements of the registered design when previously this right was limited to the design owner. This is beneficial given that an exclusive licensee will suffer the most harm from any infringement of that design.

What does this mean for designers and users?

These proposed changes should be encouraging for Australian designers as they demonstrate that legislators and IP Australia have recognised that the current design system can be improved and they are seeking to do so, with their eye on supporting designers and businesses and to give incentive to innovate by providing protection for those design aspects of innovation. As a whole, these amendments seek to ensure the rights of designers and users are balanced in a technologically driven world. However, with a view to overall certainty and procedural fairness, the regulatory consequences for potential decreased competition during the earlier stages of the design process are not yet clear. If designers and businesses take up the increased opportunity for registered protection through these changes, we will get a clearer picture of how (if at all) these small expansions to the ability to obtain registered design protection will effect market competition.

What remains the case is that design registration continues to provide different, but potentially complementary and supportive, protection when compared with registering a design, shape or aspect of packaging as a trade mark, as well as other forms of IP protection. We always recommend that any designers of businesses who consider any aspects of their designs or products to be important or unique should consider any and all potential forms of IP protection for their designs.

Thank you Shumi Ruan for contributing to this article.