Australia’s Advisory Council on Intellectual Property has published its Final Report and outlined its recommendations for the future of Australia’s design system.

In all ACIP has made 23 recommendations falling into 8 general topic areas. For the most part the proposed changes look to be positive and should lead to improving the Australian designs system.

This article outlines some of the more substantive recommendations that have been made.

Background

Australian designs law is governed by the Designs Act 2003 (the Act).

The Act commenced in 2004. Its implementation, however, was largely influenced by recommendations made 20 years ago (in 1995) by the Australian Law Reform Commission1.

In 2012 parliament tasked Australia’s Advisory Council on Intellectual Property (ACIP) with investigating the designs system to assess:

  • its effectiveness in stimulating innovation by Australian users; and
  • its impact on economic growth.

Within this context, ACIP was asked to “inquire, report and make recommendations” on:

  • opportunities for enhancing the Australian Designs Act and
  • deficiencies or unintended consequences arising from implementation of the Designs Act.

Following publication of an issues paper in 20132 and an options paper in 20143, ACIP has now completed its investigation and released its final report4.

ACIP’s Recommendations

At a general level, ACIP identified: 

  1. a need for increased harmonisation with international practices and treaties;
  2. a need to review several of the changes introduced by the Act; and
  3. scope to improve design protection and clarify the law.

To this end the report makes 23 separate recommendations dealing with various aspects of the designs system.

A number of the more substantive recommendations are outlined below.

International Harmonization

ACIP states that a “key element” of its Final Report is a push towards greater harmonization with international treaties5.

Despite this “key element”, ACIP recommends that Australia should not immediately join the Hague Agreement Concerning the International Registration of Industrial Designs.6 The recommendation is to investigate the implications of joining the Hague Agreement and monitor whether usage increases in light of the United States and Japan’s recent joining.

A related recommendation is that the maximum term of design protection should be maintained at 10 years.

Although ACIP received submissions that generally supported an extension of the maximum term to 15 years, it formed the view that extending the maximum term by five years would not act as an incentive for greater investment in design. Accordingly, ACIP has only recommended that the maximum term be extended if Australia did ultimately decide to join the Hague Agreement.7

The lack of commitment to increasing the term appears to be contrary to ACIP’s “key element” of increasing international harmonisation. With the notable exception of China, the majority of countries of interest to Australian companies offer a maximum term of protection that is longer than 10 years. The United States now provides 15 years from grant, Japan 20 years from registration, and the European Union 25 years from the filing date. Even Australia’s Trans-Tasman partner New Zealand provides a 15 year term.

Procedural Aspects of the Designs System

ACIP has made a number of recommendations in respect of procedural aspects of the designs system. These include recommendations regarding the terminology for uncertified designs, compulsory examination, opposition proceedings, multiple design applications, and deferring publication.

Registered/certified design terminology

An Australian design is registered on a formalities check only, but cannot be enforced until it has been examined and certified.

Once a design is registered the owner can publicly hold that design out as such – e.g. by marking or advertising the related product to be subject to a “registered” design. This is, in fact, good practice: marking indicating a product is subject to a design registration is treated as prima facie evidence that a potential infringer was aware of the registration8 (which can become relevant to remedies in the event infringement is found).

The Act does provide that any threat of infringement proceedings based on an uncertified design is an unjustified threat9. It also, however, provides that “mere notification” of the existence of a registered (but not necessarily examined and enforceable) design does not amount to a threat.10

Unsurprisingly, research found evidence that referring to an uncertified design as a “registered” design was the source of some confusion in the marketplace. This appears to be at least partially due to the position in foreign jurisdictions where use of the term “registered” (or similar) is reserved for rights that have been examined and are enforceable.11

In order to address this confusion ACIP recommends that designs that have been registered but not certified should be referred to as ‘uncertified’ designs.12

Examination

Under the current Designs Act an Australian design can remain on the Register of Designs for its entire term (up to 10 years) without being substantively examined. Statistically, only 20% of design registrations are examined.13

ACIP is of the view that allowing unexamined registrations to remain on the Register for their full term creates uncertainty for third parties, particularly given designs may not be found valid if they were to be examined.

Many submissions voiced support for a system requiring examination to be requested in order to renew a design. The intention here is to provide a balance between making examination compulsory and providing applicants with time to determine whether or not they wish to proceed with a design and incur the associated costs.

In light of this ACIP has recommended the introduction of a requirement that examination must be requested by the first renewal deadline (currently 5 years from filing).14

This examination requirement will increase costs for some applicants. It will therefore require a more studious assessment of designs before the 5 year deadline to determine whether examination (and renewal) is worthwhile. Examination and renewal may be more attractive to applicants if the possibility of renewing for a further 10 years was available, rather than only 5 years.

Opposition proceedings

Unlike the Australian Patents and Trade Marks Acts, the Designs Act does not provide for opposition proceedings.

Under the current Act the only options for challenging a design are by ex-parte procedures (examination/re-examination) or Court proceedings. Generally speaking, and unless knock-out invalidity grounds exist, the inability to present a thorough case in ex-parte proceedings leads them to being approached with some caution.

In order to provide a low cost forum for resolution of differences between parties, ACIP recommends introducing a system which allows for opposition proceedings before the Designs Office15 Such proceedings would be closely aligned with opposition proceedings that can be run against patents and trade marks.

Multiple design applications

The 2003 Designs Act provides the ability to file multiple designs in a single application. This was, amongst other things, intended to reduce costs for applicants.

Currently, however, design charges are levied on a per-design basis – not a per-application basis. As a consequence, a design must be individually registered, examined, and renewed (all at the same per-design cost) whether filed in a stand-alone application or in a multiple-design application.

In order to address this ACIP supports the introduction of fee reductions for multiple designs that are filed in a single application16.

Even if fee reductions are introduced, if the substantive provisions for multiple design applications remain the same, care will need to be taken with multiple design applications. Under the current regime multiple designs filed in a single application are treated as a single application. As a consequence, if one design in an application fails to overcome the formalities objections and lapses, all remaining unregistered designs in that application will also lapse.

Publication Deferral

Australian designs are typically published quite soon after registration (e.g. within two to three weeks).  From a commercial perspective, most companies would like the official launch of their product to be the first time that a new design is able to be seen by the public. The early publication of Australian designs can present a problem where a design owner wishes to obtain a priority date for a design so they can freely discuss with manufacturers or distributors, but is not ready to launch the product.

While there are “informal” ways of deferring publication (e.g. inducing a formalities objection into a design application) no formal delay mechanism exists. ACIP’s view is that this creates complexity and disadvantages unsophisticated users of the system.

ACIP’s recommendation is that a design be automatically published six months after the filing date (with the option to request publication earlier, if desired)17.

On the face of it, linking publication to the filing date – as opposed to the priority date –introduces what is likely an unintended consequence. An applicant who files a first-instance Australian design will have that design published in 6 months. An applicant who files a priority application in a convention country, however, can defer publication by 12 months (i.e. by awaiting the 6-month convention filing period before filing in Australia and then taking advantage of the 6-month deferred publication period).

This may compel Australian companies to file priority applications overseas, such as in the United States or Europe, where publication can be delayed for a longer period. A subsequent convention filing in Australia can then be delayed for a further 6 months.

ACIP also recommends if publication is deferred amendments should also be made to the innocent infringer defence so that damages for infringement apply from the date a design is published18.

The Threshold for Protection

Under this heading ACIP made recommendations regarding Statements of Newness and Distinctiveness and the introduction of a grace period.

Statements of Newness and Distinctiveness

In Australia, a Statement of Newness and Distinctiveness can be filed to emphasize particular features of a design. Emphasized features are, in the context of the design as a whole, given particular regard when considering validity and infringement.

Currently, Statements of Newness and Distinctiveness cannot be amended after a design has been registered (which, as discussed above, occurs quite quickly and without any substantive examination).

ACIP recommends that amendment of a Statement of Newness and Distinctiveness should be possible up to the point of certification19. This would permit, for example, features of a design to be emphasised to distinguish the design over the prior art identified during examination.

Grace period

Australian law does not currently provide a general grace period for designs. Consequently, disclosure of a design before filing an application will (unless certain, limited circumstances apply) preclude the possibility of valid protection being obtained.

Based on a number of submissions, and the recognition that the draft of the Designs Law Treaty includes a requirement to provide a grace period, ACIP recommends that a 6 month grace period be introduced. In order to balance the impact of such a grace period on third parties, ACIP also recommends the introduction of a prior user defence to infringement.20

Under the proposed grace period, a design owner’s own disclosure will be able to be excluded from the prior art base provided an Australian design application is filed within 6 months of the disclosure.

Subject Matter Considerations

Two subject matter issues were investigated by ACIP: the protection of partial products and the protection of “virtual” or “non-physical” products (e.g. graphical user interface elements displayed on a screen).

Protection for partial products

The Act requires an Australian design to be in relation to a product. A product must, in essence, be something that is separately manufactured.

When combined with the requirement that the “overall impression” of a design must be taken into account when assessing validity and infringement, this can make protecting a “partial product” – i.e. a part of a product that is not separately manufactured from the whole – difficult.

A number of submissions were made outlining this difficulty, and advocating for change to better enable the protection of “partial products”.

ACIP recommends that the requirement to consider the overall appearance of the whole product be retained21.

With respect to protecting “partial products”, however, no recommendation was made. In this regard ACIP’s recommendation was that if the ability to protect “partial products” would advantage Australian applicants (either directly or in an international harmonization sense) it would support reform to provide this22.

Protection for “virtual”/“non-physical designs”

The Australian Designs Office is currently of the view that virtual designs (such as graphical user interfaces - GUIs) cannot be protected.

On the one hand the Designs Office considers that a virtual design (e.g. a GUI) is not itself a product. On the other hand, where a virtual design is related to a physical product (e.g. a display screen), the Designs Office view is that the product must be considered in a resting state (e.g. unpowered), and in that state no GUI features are visible.

ACIP does not provide a solid recommendation as to whether the definition of a product should be expanded to include non-physical products – noting merely that if such a change was made it would require a wide range of reforms to the Designs Act.

ACIP does, however, strongly state its view that the approach of the Designs Office in considering products in a “resting” state is unfounded:

There is nothing in the legislation which requires that visual features be observable in the ‘resting’ state or when unconnected to electricity. IP Australia should reconsider, and abandon, this aspect of its practice in assessing the validity of designs.

The actual recommendation made by ACIP in this regard is simply that the treatment of virtual/non-physical designs be reconsidered24.

Enforcement

One of the “enforcement” issues considered by ACIP is the provision of border protection measures.

While no border protection measures currently exist for designs, ACIP recommends this be reconsidered. Generally, these provisions would allow an owner of a certified design to lodge a Notice of Objection, which would form the basis for customs officials to seize alleged design infringements25. Such border protection measures currently exist for trade marks and copyright.

ACIP’s recommendation is that seizure be limited to products that are identical to the certified design. This is narrower than the normal test of infringement which provides that an infringing product is one that is identical or substantially similar in overall impression to a design.

Where to from here

ACIP’s final report will be reviewed by the Australian Government. While ACIP has recommended that amendments should be made as soon as practicable26 there is no set time frame for this review. If any/all of ACIP’s recommendations are accepted, amendments to Australia’s Designs Act will be proposed.

This article was first published in LexisNexis' Australian Intellectual Property Law Bulletin, vol 28, no 6, 2016.