Designs law reform is back on the agenda

Reform of Australia's designs law regime has taken a long-awaited step forward. Following many years of review and consultations on the effectiveness of the Designs Act 2003 (Cth), IP Australia has recently published its response to the implementation of the recommendations made by the Advisory Council on Intellectual Property (ACIP) back in 2015. IP Australia has announced that it expects to release proposed legislative amendments to the Designs Act later this year.

ACIP's recommendations

The registration system for designs in Australia gives right holders protection for the overall appearance of a product resulting from one or more of its visual features – such as its shape, configuration, pattern or ornamentation. Importantly, a design registration does not protect the function of a product. Rather, it provides protection for the visual appearance of a product. 

In May 2012, ACIP was asked to investigate and undertake a review of Australia's designs system in order to assess its effectiveness in stimulating innovation and its impact on economic growth. Following extensive consultations with stakeholders, ACIP released its final report in March 2015. ACIP found that the current Designs Act lacks clarity and provides limited scope for the protection of designs. The report set out 23 recommendations aimed at improving and addressing the problems with the Act.

In 2015 and 2016, the Productivity Commission conducted a wholesale review of Australia’s intellectual property regime. When it came to designs law, the Productivity Commission essentially backed the recommendations by ACIP. The Productivity Commission’s recommendations have led to some significant changes to Australia’s intellectual property laws, particularly in relation to patent law. Having bedded down those changes, it is now time for designs law to get some limelight.

Between October and December 2019, IP Australia consulted with stakeholders on the implementation of the ACIP recommendations. It has recently released its response to this consultation process. We canvass some of the more significant law reform proposals below.

Introduction of a grace period

One of the ACIP recommendations was the introduction of a “grace period”. For a design to be registrable, it must be new and distinctive when compared with the prior art base for the design as it existed before the priority (filing) date. This means that the design must not be published or publicly used before filing an application (ie. it must remain a secret). If a designer inadvertently publishes their design before filing – even by including a photograph of the product in pre-launch publicity material / product catalogues – the design would become part of the prior art base and would therefore not be capable of registration. This happens all too frequently in practice.

A “grace period” is a period of time before the filing of an application where any publication or public use of the design by the design owner will not deprive the design of its newness. Australia's patent law allows for a grace period prior to filing, but there is no equivalent provision in Australia’s designs law. The lack of a grace period is perhaps the greatest weakness in Australia’s current designs law system.

During the consultation process, there was unanimous support for the introduction of a grace period, with most submissions favouring a 12 month grace period. IP Australia has said that it will proceed with an automatic grace period of 12 months before the priority date.

At the same time, it is proposed that a prior use defence – modelled on the prior use defence in section 119 of the Patents Act 1990 (Cth) – would be introduced. The prior use defence will protect someone from infringing a registered design if they started using their design before the filing (priority) date of the registered design.

These changes will give designers some protection from any inadvertent publications of their designs before an application is filed. These inadvertent disclosures are often a result of a lack of awareness of the operation of the designs registration system. The introduction of a grace period may also allow designers to "test" their designs in the market (obviously for a limited period of time) to assess its commercial viability. While the introduction of a grace period is a welcome change, it will still be important for designers to continue to file applications promptly. In particular, in cases where it might be desirable to protect the design overseas, it is important to recognise that there are numerous countries which have a shorter grace period of 6 months, or no grace period at all.

Protection of partial designs

Currently Australia’s designs law only permits the registration of a design for the overall visual appearance of a whole product. However, it is possible for an applicant to highlight certain features/parts of their design as being new and distinctive through the use of a Statement of Newness and Distinctiveness (SOND). If an application includes a SOND, particular regard must be given to those features/parts, albeit within the context of the design as a whole.

ACIP recommended that IP Australia consider allowing the registration of a partial design. A "partial" design is a design for a portion/s of a whole product – for example, a handle on a cup (the whole product being the cup itself). Other jurisdictions such as the European Union, the United Kingdom, the United States and Japan allow for the protection of partial designs as part of their design registration systems

While submissions pointed out the benefits of designers being able to protect "signature" features of their products, IP Australia's response was that it does not consider there is a need for legislative change at this time. It concluded that such protection would "increase complexity for businesses to determine their freedom to operate and/or challenge the validity of relevant designs" and that any amendments "would involve multiple and complex legislative changes". Despite the fact that IP Australia will not propose any legislative changes at the moment, it has said that it will continue to consider this issue and it is on IP Australia's policy register for further feedback and consultation.

At the same time as moving to implement the ACIP recommendations, IP Australia is undertaking a wholesale review of Australia’s designs law system. It appears that the possibility of protecting partial designs will be considered further as part of that wholesale review.

Treatment of virtual designs

A "virtual" design is essentially a design as it appears on a screen (such as a computer or mobile device) – for example, screen icons, fonts, screen displays, animated characters, and graphical user interfaces. The Designs Examiners’ Manual of Practice and Procedure currently states that designs must be assessed in the context of the product in its "resting" state, as opposed to its "active" state. The Manual gives the example of visual features displayed on a computer screen which do not exist when the computer is turned off. ACIP recommended that consideration be given to a product in its active state, not just its resting state, when considering the validity of a design.

For a design to be registrable under Australian law, it must be applied to a product. The Designs Act defines a "product" as a thing that is manufactured or hand made. IP Australia’s approach is based on the thinking that a virtual design is not applied to a product, but rather it is effectively a "product" in itself. There has been limited guidance from the Courts as to whether a non-physical product falls within the definition of something that is manufactured or hand made. There are a number of design registrations currently on the register that relate to non-physical designs, but IP Australia’s approach means that such designs cannot be “certified” following examination – which means that the owner does not have any enforceable rights (only a registered and certified design can be enforced).

The overwhelming majority of submissions received through the consultation process supported the protection of virtual designs, but there was a split of views on how this reform would be implemented. Similar to its views on the protection of partial designs, IP Australia concluded that it does not consider that there is a case for legislative change at this time. However, it is expected that this issue will also be on the agenda for reform as part of the forthcoming wholesale review.

Other areas of reform

Some of the other changes that IP Australia has said will be included as part of the first round of legislative reforms (along with the introduction of a grace period) are as follows:

• Providing exclusive licensees with the right to commence proceedings for design infringement. Australian trade mark, patent and copyright laws allow exclusive licensees to bring proceedings for infringement, however currently the Designs Act does not allow for this.
• Revising subsection 19(4) of the Designs Act to clarify the standard of the informed user and enshrine the approach in Multisteps Pty Ltd v Source & Sell Pty Ltd [2013] FCA 743.
• Removing the requirement to request the registration of a design (it will automatically occur six months after the filing date).
• Providing protection for innocent infringers by ensuring that a design registration cannot be infringed between the filing date and registration (that is, prior to the publication of the design).

Where to next for designs law reform?

IP Australia is intending to release an exposure draft of its proposed legislative amendments for public comment in the second half of this year. IP Australia's response to the implementation of ACIP's recommendations, and the changes that are coming, are important steps in improving and clarifying the designs law regime in Australia. While there are some issues that have been tabled for now, it is pleasing to see that designs law reform is back on the agenda.