Increased investment in design is positively correlated to turnover growth.1 It is estimated that the growth for companies that protect their designs is at least 20% higher than those that do not. Protecting designs through registration maximizes their value and can have a considerable impact on business performance as well as providing an identifiable balance sheet asset. Recent changes to the law relating to design patents in the U.S. makes it quicker and more cost-effective for companies based or doing business in the U.S. to maximize the value of their designs through registered protection worldwide.
This article considers the U.S. and European regimes for the protection of designs in light of the recent introduction in the U.S. of the Hague system – a system for the international registration of designs through the filing of a single application.
I. New Developments With Respect to Design Patents in the US and EU
On December 18, 2012, the U.S. Congress enacted the Patent Law Treaties Implementation Act of 2012 (“PLTIA”) to implement The Geneva Act of the Hague Agreement Concerning International Registration of Industrial Designs adopted at Geneva on July 2, 1999 ("Hague Agreement").2 Similar to the Madrid System for international trademark registration, the Hague Agreement is an international registration system which provides the means by which design patent applicants can file a single design patent application in a single language either directly with the International Bureau (“IB”) of the World Intellectual Property Organization (“WIPO”), or indirectly through one of the 64 Contracting Parties (i.e., a state or intergovernmental organization that is a party to the Act), and request design patent protection in such country for up to 100 industrial designs.3 In essence, the Hague Agreement provides a simplified procedure for obtaining registered protection for a qualifying design in designated jurisdictions, and avoids, at the outset, the fees associated with filing separate applications in multiple countries through local counsel.
The PLTIA adds a new Chapter 38 to Title 35 of the U.S. Code which establishes a procedure for filing international design applications in accordance with the Hague Agreement.4 As such, as of May 13, 2015, U.S. applicants5 can now simply file a single design patent application with the USPTO and designate those treaty countries where the applicant desires to procure design patent protection, and foreign applicants can now designate the U.S. as a country to receive international design protection by means of the Hague Agreement.6
The PLTIA further authorizes design patent applicants to claim priority to or from an international design application,7 and changed the term for all design patents from 14 to 15 years, regardless of whether filed using the Hague Agreement or not.8 This extended term applies to design patent applications filed on or after May 13, 2015.
The PLTIA also makes available provisional rights for international design applications designating the U.S.,9 which provides a means to recover damages for infringing activities that occurred even before the patent issued provided the invention claimed in the published patent application is “substantially identical” to those found in the issued patent.10
While the Hague Agreement standardizes the formal requirements for international design applications, and provides a simplified filing procedure, the IB does not substantively examine design patent applications, nor is it entitled to reject or refuse an international application based on novelty or any substantive ground.11 Instead, the substantive law of the designated Contracting Parties still applies. Notably, the PLTIA specifically provides that international design applications designating the U.S. will be examined under the U.S.’s existing design patent laws.12 While examination of international registrations is carried out by the designated Contracting Parties each according to its substantive laws, the use and submission of graphic reproductions of designs (e.g., drawings, photographs, etc.) meeting international registration requirements (subject to designated Contracting Parties’ local rules on maximum number of representations) should always satisfy the criteria for representations. The procedure is therefore a useful way of ensuring compliance with formal requirements which can vary across jurisdictions.
The European Union has been a member of the Hague Agreement since September 2007 and it has been possible to file applications for international registration designating the EU since 2008. Notwithstanding that the EU is the most frequently designated Hague member in international registrations,13 the system has arguably remained underused. While approximately 80,000 designs are registered by OHIM annually, in 2013 only 8,961 of those were international registrations designating the EU. Prior to the accession of the U.S. to the Hague Agreement, applicants located in the U.S. had no option but to file applications for registered Community design protection directly with the EU. The same rational applies today to applicants who are not members of the Hague Agreement, such as Canada and China. With the introduction of the PLTIA, it is anticipated that the number of direct applications will fall as eligible applicants take advantage of the international route to registration as provided by the Hague Agreement.
Once an international application is filed, and assuming the formal requirements of the Hague Agreement are met, the IB will register the design in the International Register, publish the international registration, and send a copy of the publication to each designated Contracting Party.14 Standard publication of the design by the IB is six (6) months after the date of international registration, however, publication may be deferred provided allowed under the designated Contracting Party’s rules.15 Notably, the United States does not permit deferred publication. Following publication, each country designated in the application is entitled to substantively review the design application and either approve or potentially issue a refusal(s) as they would do if the application was filed directly with the Contracting Party.16 That said, it is important to note that such refusals must be transmitted to the WIPO within a certain period of time after publication of the design patent application.17 Notably, Contracting Parties can also set forth specific requirements that the patent applicant must comply with in order to receive a filing date.18 For example, U.S. filings must include at least one claim.19 Thus, applicants should be wary of the specific Contracting Party’s requirements when filing international design applications.
Once registered, there are no differences in the legal effect of a registered Community design (or a European national registration) or a U.S. design patent obtained directly from the USPTO as opposed to an international registration designating the EU (or an EU Member State) or the U.S. It should be noted that registered Community designs and U.S. design patent applications can claim priority to a design application in any state which is a party to the Paris Convention for the Protection of Industrial Property or the Agreement establishing the World Trade Organization, provided that the subsequent application is filed within six (6) months of the first application. A registered Community design application can, therefore, claim priority to a U.S. design patent application and vice versa, irrespective of whether the application to which priority is claimed was filed directly or using the Hague System.
II. Practical Considerations and Take-A-Ways
The United States’ adoption of the Hague Agreement will indeed render filing international design patent applications simpler and more cost effective, at least at the outset. In the event that there is an issue with the application, consultation with local counsel may be required, thus requiring further fees/costs. Notably, certain jurisdictions are not yet parties to the Hague Agreement, e.g., China, Canada, etc., such that separate foreign design patent filings through local counsel may still be required. It is also important to exercise caution in filing as the design patent laws in each jurisdiction may impact the scope and enforceability of any such design rights in the country. Local counsel should be consulted in this regard.
Protecting designs through registration maximizes their value and can have a considerable impact on market share and turnover. Given the bottom line benefits of design protection and the relative ease and low cost of obtaining registered protection, which is now facilitated by the availability of the Hague system for U.S.-based business and overseas companies doing business in the U.S., design protection should be viewed as an integral component of a business’ intellectual property portfolio. The costs and speed of obtaining registration of designs20 is particularly favorable when compared to other forms of intellectual property rights, especially patents. The availability of additional damages upon infringement in the U.S.,21 and the inherent registerability of designs prior to the establishment of secondary meaning, also presents a significant advantage over trade mark protection.