IP Australia has set out the pros and cons of joining the Hague Agreement, and wants your feedback by 31 May 2018.

The Government continues to explore whether Australia should accede to the Hague Agreement, providing designers international protection from a single application.

In March 2018, IP Australia released its report, The Hague Agreement Concerning the International Registration of Industrial Designs: A cost-benefit analysis for Australia, investigating the economic costs and benefits of Australia joining the Hague Agreement, while seeking further input from stakeholders.

What is the Hague Agreement?

The Hague Agreement is an international registration system, which offers the option of obtaining protection for industrial designs in a number of states through a single international application filed with the World Intellectual Property Organisation (WIPO). It allows applicants from members countries to file one international application, in one language, with one set of fees paid to WIPO.

The Hague Agreement has 68 members, including many European countries, Singapore, South Korea, Japan and the USA. The United Kingdom has recently ratified, which will take effect in June 2018. New Zealand, China and India are not signatories to the Hague Agreement.

Under the Hague system a registered design is protected for an initial term of 5 years, however, it can be renewed (in 5 year terms) up to a maximum of 15 years. Nevertheless, a member can specify a maximum term for protection that is more than 15 years to be applied in its territory. If Australia joins the Hague Agreement it will need to increase its current maximum term of protection for registered designs from 10 to 15 years.

What has led to the Hague Agreement Report?

The Hague Agreement Report builds on two previous IP-related reports.

The former Advisory Council on Intellectual Property (ACIP) published its "Review of the Designs System" in March 2015 recommending that Australia should start an investigation into the implications of joining the Hague Agreement. The Government accepted this recommendation, stating that IP Australia would investigate the implications and continue to monitor usage of the Hague system by Australia's major trading partners.

In December 2016 the Productivity Commission released its report into "Intellectual Property Arrangements". It noted that the Australian Government had committed to implement many of the recommendations made by ACIP, and took account of that when considering options to improve the Australian designs system.

The new Hague Agreement Report is intended to form part of the evidence base in relation to whether Australia should join the Hague Agreement.

What are the costs and benefits of joining the Hague Agreement?

The perceived key benefits of joining the Hague Agreement include:

  • Australian designers would have easier access to international markets through the filing of a single application;
  • a range of costs savings including on official fees, representation, translation, maintenance, renewal fees, red tape costs and professional fees;
  • enabling designs to extract additional monopoly premiums from foreign markets;
  • incentives to local designers as a result of the increased term for designs protection;
  • additional foreign design innovation generated by the incentive of access to the Australian market via the Hague Agreement; and
  • additional international benefits, including having a domestic IP system that is consistent with international norms.

The main concerns that have been raised are:

  • the Hague system was not much used at the time of ACIP's review;
  • requirements for drawings and written descriptions vary considerably between Hague Agreement countries and an application under the Hague system may have to include drawings suitable for every country where design protection is sought (which caused ACIP to note that any gains from the single application process would be "largely illusory");
  • transfer of ownership of registered designs under the Hague Agreement is restricted to companies resident in participating states;
  • accession to the Hague Agreement would involve system changes in Australia with associated cost implications including set up costs and further unknown costs;
  • implications that arise from extending design protection to 15 years, for example, the social welfare impacts including that Australian consumers may pay more to foreign designers as a result of the extended term of the monopoly on foreign designs; and
  • increase in design applications result in more registered designs that Australian firms will have to avoid or license in order to innovate.

Under the methodology deployed, the Hague Agreement Report considers the net benefits to Australian applicants are outweighed by significant net costs to Australian consumers, however, noting the difficulty of obtaining and quantifying some costs and benefits.

What IP Australia needs from you

IP Australia is currently accepting submissions on its cost-benefit analysis and its methodology. In particular, it is seeking feedback on the assumptions of the economic analysis, any unquantified impacts and case studies or experience users of the Hague system, or applicants for designs overseas have had.

Written submissions can be made by 31 May 2018 and can be sent to: consultation@ipaustralia.gov.au