The main purpose of the UK Intellectual Property Act 2014, which has now received Royal Assent, is to modernise certain aspects of intellectual property law in order to ensure that the IP system operates more efficiently and is clearer and more accessible, thus increasing legal certainty.

The Act primarily deals with patent and design laws but, significantly, includes provisions to allow the UK to ratify and implement the Unified Patent Court Agreement. There are new criminal penalties for intentional infringement of registered designs, strengthening of the patent Opinions service and a new Opinions service for registered designs, as well as "improvements" to unregistered design right law. Provision is also made for a research exemption from disclosure in relation to freedom of information and for the automatic extension of certain existing copyright provisions to nationals of and works first published in other countries (without the need to include a list of countries and territories in an order).

It will be for the Secretary of State to make orders bringing the new measures into force, but it is expected that they will begin to come into force from October 2014, with all measures implemented by late 2015.

Background

The Intellectual Property Act 2014 makes amendments to the Copyright Designs and Patents Act 1988 (CDPA), the Patents Act 1977 (PA) and the Registered Designs Act 1949 (RDA).

Many of the changes to the design law stem from the recent Hargreaves Review of copyright law in the UK and its modernisation, and have three main purposes: to help improve the enforcement of designs and understanding the design rights of others;

to simplify design law and get the IP framework to better support innovation; and to improve processes associated with the design framework such as better provisions of information.

In relation to the changes to patent law, the objectives were to introduce an easier way for patent owners to provide public notice of their patent rights; to expand the circumstances in which the IPO may issue an opinion in relation to patents; to provide for the UPCA to be brought in to effect in the UK to establish the UPC; to allow the IPO to share information on unpublished patent applications with international partners to help reduce international patent backlogs and speed up patent processing; and further to correct minor aspects of the patents legislation to provide clarity and legal certainty to users of the patents system.

The Minister for Intellectual Property, Lord Younger, at recent BIS press release relating to the new Act commented: ''Continued investment in intellectual property is vital to all businesses, as it contributes £16 billion to the UK economy each year. It is essential that we continue to work hard to create the right environment for them to flourish so we can benefit from their creative designs, inventions and ideas'', adding, ''I am confident that this Act will further strengthen our world-class IP system – from research to market – and to help businesses of all sizes continue to thrive''. Progress in this area will be measured as the Act introduces a new reporting duty: the Secretary of State will annually report on the state of Intellectual Property law and the work of the IPO.

Key elements of the Bill

Patents

  • New powers to enable the UK to implement the Unified Patent Court Agreement which must be ratified by the UK before it can come into force across Europe to provide a new patent litigation system via the Unified Patent Court
  • Patent Opinions (opinions on patent infringement or validity can be sought from the UK Intellectual Property Office) – Extension of power to revoke a patent; broader grounds for seeking an opinion, and Opinions on SPCs to be allowed
  • Sharing information with overseas patent offices
  • A web link to the patent can replace patent number on products

UK design right

  • The repeal of first ownership of UK design rights for the commissioner – now the designer will be the first owner, although transitional arrangements apply. These changes in relation to the designer as first owner are not retrospective (either actually or contractually). The changes do not apply to a design created before the commencement of the section of the Act that makes these changes, nor do they apply if there is a contract between the designer and the commissioner relating to the commission of the design which was entered into before the commencement of this section (even if the design, is created subsequently to the commencement of the section).
  • Removal of the words "of any aspect of" from the definition of "design" that can be protected by UK design right. This is intended to limit the protection for trivial features of designs, by making sure that protection does not extend to "any aspect" of part of an article. It is expected that this will reduce the tendency to overstate the breadth of unregistered design right and the uncertainty this creates, particularly in relation to actions before the courts
  • Originality – "commonplace" to be limited to commonplace in qualifying countries
  • Qualifying criteria: The new Act simplifies and expands the concept of qualifying for design right so that those who are economically active in the EU – and those countries to which qualification has been extended by Order (see the countries listed in S.I. 1989/1294) - may qualify. The Act removes the definition of qualifying individual and "qualifying person" has been amended to mean "an individual habitually resident in a qualifying country, or a body corporate or other body having legal personality which (i) is formed under the law of a part of the UK or another qualifying country and (ii) has in any qualifying country a place of business at which substantial business activity is carried out''. The requirement that benefitting companies be formed under the law of the UK or another qualifying country was removed in draft versions of the Bill, but was re-introduced on Parliament's final reading. Thus, the only real substantive change in the definition is to remove the citizenship requirement that is part of the current qualifying individual definition.

The definition of 'qualification by first marketing' is more significantly changed by the new Act. Whether a design qualifies under this subsection will now depend on the country in which the sales took place and the person who did the marketing having the status of a 'qualifying person'. It will no longer be a requirement that that person has exclusive authorisation to market articles in the UK, thus broadening the scope of the section. The definition of "qualifying country" has not been altered.

  • Exceptions to be introduced such that acts done privately for purposes which are not commercial, acts done for experimental purposes and acts of reproduction for teaching or citation purposes will not be an infringement

Registered Design

  • New criminal penalties for deliberate copying of a UK or Community registered design: A new section, section 35ZA, is inserted into the RDA, making the deliberate copying of a UK or Community registered design a criminal offence, and specifying the circumstances under which the offence applies. The offence will only apply to designs registered prior to the copying, not to those registered after the copying has taken place. For a criminal offence to take place, intentional copying in the course of business to make a product exactly to the copied design or with features that differ only in immaterial details will need to be proven. Parliament added the word 'intentional' to the final version of the Act to clarify the type of copying to which the criminal offence applies. This is a high threshold (particularly in light of the criminal burden of proof: beyond all reasonable doubt) and reproducing a design unintentionally will not be caught.

Even if intention is proved, various conditions must apply in order to establish that an offence has been committed, for example, establishing that the person accused acted without the consent of the registered design holder, knew or had reason to believe that the registered design in question had been copied, and acted in the course of carrying out business activities. According to the Explanatory Note to the Act, in practice, the offence will not apply if the defendant can show reasonable grounds for believing the design in question was invalid or that their design did not copy it, or that their use of the design was merely incidental to the carrying on of the business.

If the criteria for the offence are satisfied, then the consequences will be serious. The offence will carry with it a fine and/or a prison sentence of up to ten years, and will be triable, on summary trial (in a magistrates’ court) or a trial on indictment (in a Crown court). The offences, including the mode of trial and penalties, reflect existing criminal sanctions for trade marks and copyright (see Trade Marks Act 1994 s. 92; Copyright, Designs and Patents Act 1988 s. 107).

  • New application of criminal penalties to partnerships
  • Trading Standards will have similar powers of enforcement for design offences as they have for copyright and trade marks. Powers of forfeiture allowing, in certain circumstances, a court to authorise the removal of copies of registered designs, or items which have been used to make them, from the premises of people under investigation, will be introduced. These copies may later be destroyed or passed on to another person in order to be recycled or re-used in some way.
  • Extension to Community designs of the exemption from copyright infringement when legitimately using a registered design (under section 53 CDPA)
  • A Commissioner will no longer the first owner of a UK registered design, the designer will. This was already so for Community registered and unregistered design under the Community Designs Regulation 6/2002 (the Regulation). However, but the employer will still be the first owner of design created by their employees in the course of their employment.
  • Applicants for registered designs no longer need be the proprietor of the design (this brings UK law into line with the way the Regulation deals with applications for registered designs)
  • Right of prior use to be introduced
  • International registration procedures to be available for UK registered design (accession to the Hague Agreement)
  • Alignment of innocent infringement with the provisions under the Community design rights legislation
  • New Registered designs Opinions process will be established (the scope of which may be extended to include other design rights such as the UK unregistered design right)

Pre-publication research

  • New exemption from the Freedom of Information Act 2000 (FOIA) for pre-publication research will be introduced, exempting information obtained in the course of, or derived from, a programme of research if certain conditions are met. The programme must be continuing with a view to publication, and disclosure before this date would prejudice either: (i) the programme, (ii) the interests of any individual participating in the programme, (iii) the interests of the authority who holds the information (iv) the interests of the publishing authority if different. However, in all circumstances of the case, the public interest in maintaining the exemption must outweigh the public interest in disclosing the information. Each case will be decided on its own merits, and should the balance fall in favour of the exemption on the facts, the new provisions should allow researchers in 'public authorities' (a wide definition under Schedule 1 FOIA, including many NHS bodies) to more easily validate and analyse their work before putting it into the public domain. So as not to undermine the purpose of the new section, under subsection (2), public authorities will not be obliged to confirm or deny if they hold exempt information if doing so would likely prejudice the four factors outlined above.

Recognition of Foreign Copyright

  • The Act amends numerous sections of the CDPA, extending qualification by reference to author (s.154), country of first publication (s.155) and to place of first transmission (s.156). The Act inserts a large number of countries and territories directly into the text of the CDPA. Moreover, the wording of section 159 of the new Act means that in many cases protection will automatically extend to new signatory states without the need for a new order.

Countries and territories that will be incorporated into the CDPA by the new Act are: ''members of the EEA (European Economic Area); the Channel Islands; the Isle of Man; Gibraltar; and countries that are signatories to specific international conventions namely: the Rome Convention for the Protection of Performers, Producers of Phonograms and Broadcasting Organisations, the Berne Convention for the Protection of Literary and Artistic Works and the World Intellectual Property Organisation Performances and Phonograms Treaty''.

The Secretary of State will be required to report annually on innovation and growth in IP

  • The report will consider how the activities of the IPO, and how legislation relating to IP, have contributed to the promotion of innovation and economic growth in the UK. The section does not prescribe the precise content of any report, as the policy objectives of the IPO will likely change over time, but the Explanatory Note sees the reporting duty as a tool for increasing transparency and sharpening the focus of the IPO towards innovation and growth. The report is likely to focus on several factors such as: legislative changes and pre-legislative work, policy development and the main outputs of the IPO's economic research programme. It will contain data to support the assessments made.