Australian designs law is currently governed by the Designs Act 2003. It is widely agreed that the current legislation has fallen behind and is out of step with the industrial design laws of Australia’s major trading partners and competitors, and this has brought about a need for change to the current legislative regime.
Underlying the push for change were the recommendations of the Advisory Council on Intellectual Property (ACIP) which issued in 2015. This was followed by IP Australia’s stakeholder consultation in 2019 which, subsequently, resulted in IP Australia’s release of its response to the ACIP report in 2020. Proposed legislation, the Designs Amendment Advisory Council on Intellectual Property Response Bill 2020 (Designs Bill), has been drafted and it is currently subject to Parliamentary review.
The Designs Bill propose a number of material changes to Australia’s designs law, with the most relevant aspects briefly set out below.
- Introduction of a 12 months grace period – the proposed grace period defines the period in respect of when a design can be “used” or “published” and still potentially be the subject of a valid design registration (i.e. meet the test of being “new and distinctive” relative to the prior art base). Importantly, the grace period will not be retroactive. This material change will align Australia with a number of its contemporaries and make it easier for design applicants to settle on less complex filing strategies (including relying on the Paris Convention). It also may permit design applicants to use and “test the market” in respect of the relevant design before incurring the costs of design registration. There are some exceptions to the grace period, with the most important being that the grace period will not apply in the event of official publication of the design by a foreign designs office.
- Prior use infringement exemption – this enables a person who has commenced, or taken steps to commence, use to potentially avoid liability for infringement for any use undertaken before the priority date of a design registration. There are a number of aspects relating to use or intended use that are covered by this provision including manufacturing, importing, selling, hiring or otherwise disposing of the relevant product (or a comparable design). The proposed infringement exemption aligns with the proposed “12 months grace period” whereby parties adopt a design that is the same or similar to a third party design only for that third party design to, subsequently, become the subject of a valid design registration.
- Exclusive licensee to have standing to file suit for design infringement – this is a material change from the current provisions where only the registered design owner has standing in respect of infringement proceedings. Clearly, the current position can make matters difficult for an exclusive licensee who has to rely on the owner of the design registration to file suit for infringement. The new provisions will address this difficulty.
- “Familiar person” standard to be adopted in respect of designs comparison – the current “standard of the informed user” will be replaced with the “familiar person” test in respect to any comparison of a registered design with any potentially infringing design or prior art. This approach removes the need for the relevant person to be a “user” of the relevant product which is the subject of the relevant design.
The Design Bill sets out a number of other technical changes to the legislation including:
- No requirement to explicitly request registration – under the new provisions, in the absence of a request for registration or withdrawal of the design within the relevant period, the application will automatically undergo registration. This change serves to avoid the prospect of the inadvertent lapsing of an application (for example: post deferment).
- No option to publish design – The option to request publication instead of registration will be removed. Requesting publication is, generally, used for defensive purposes and is perhaps somewhat redundant in light of the proposed changes to the grace period, prior use infringement exemption, and removal of the requirement to expressly request registration;
- Enhanced grounds for revocation of a registered design – the new grounds include misrepresentation, false suggestion and/or fraud which can be relied on for revocation purposes.
- Innocent infringement provisions – a registered design owner may be entitled to monetary relief in respect of pre-registration innocent infringement (as well as post registration innocent infringement). As IP Australia only publishes the design at the time it achieves registration, there may be a delay between filing an application and, subsequent, registration. During that period, a third party may commence use of the same or a similar design unaware of the application, which claims priority over that use (the act of “innocent infringement”). A discretion is now afforded to courts to refuse to award damages, reduce any damages or refuse to award any account of profits in the relevant time period. A pre-registration alleged infringer would have to demonstrate to the court that it was not aware (and could not be expected to be aware) of the relevant design application that it infringed.
The proposed changes are in response to issues that have plagued the Australian designs system for many years. These issues may have resulted in the underutilisation of Australia’s design system, particularly by small business, which may not be able to invest resources into designs of products that may, ultimately, not translate to commercial success.
The 12 months grace period may allow designers to test the market and, subsequently, seek design registration for designs that show clear commercial promise. The downside risk is that this may result in the advent of innocent infringers and parties that can rely on the prior use infringement exemption. Arguably, this has the potential to complicate infringement proceedings which stem from unprotected publishing/use of a design in Australia.