Thinking | 25 March 2021

Changes to the Designs Act 2003 (Cth)

By Ben Hamilton, Patricia Camelo De Souza and Jessica Liu

Amendments to the Designs Act are now before Parliament for consideration. We explain what you need to know about the proposed changes.

The Designs Amendment (Advisory Council on Intellectual Property Response) Bill 2020 (the Bill) was introduced to the Senate on 2 December 2020. The Bill proposes seven key changes to the Designs Act 2003 (Cth) (2003 Act).

The Advisory Council on Intellectual Property (ACIP) had been tasked (back in May 2012) with conducting a review on the operation and effectiveness of the 2003 Act.  Following three years of stakeholder consultation, in March 2015 the ACIP provided a report titled Review of the Designs System (ACIP report) to the Federal Government containing 23 recommendations for reform.

IP Australia conducted consultations (October 2019) on the recommendations accepted by the Government and, in July 2020, commenced consultations on an exposure draft of the proposed legislative amendments.

Grace period

Schedule 1 of the Bill proposes to amend subsection 17(1) of the 2003 Act to introduce a 12-month grace period for filing a design application. Publications and use made up to 12 months before the priority date will be disregarded when examining whether a design is new and distinctive. Publication or public use by an entity authorised by the designed or owner will also be disregarded (proposed s 17(1C)).

Recommendation 12 of the ACIP report proposed a six-month grace period. However, following consultations, the Federal Government determined that 12 months was more appropriate in order to better protect designers from losing their rights through inadvertent disclosure.

The grace period does not apply to publications by the Registrar of Designs and by foreign and international design bodies.

Infringement exemption for prior use

Recommendation 12 of the ACIP report also included a recommendation to introduce a prior use defence for third parties who start using a published design during the grace period. Accepting this recommendation, Schedule 2 of the Bill inserts a new section 71A to the 2003 Act providing for an infringement exemption for prior use, which will protect third parties against infringement proceedings if they start using a design before the priority date of the design registration.

The Explanatory Memorandum to the Bill noted that the aim of this amendment is to balance the rights of designers and those of third parties after the introduction of the grace period, as third parties may not be aware of a designer’s intent to file a design application within the grace period.

Registration of designs (removal of publication option)

Giving effect to recommendations 5 and 9 of the ACIP report, Schedule 3 of the Bill proposes to amend the 2003 Act to streamline the initial steps for registering a design by removing the option to publish a design without registration, and by making registration of a design automatic six months after filling.

The changes will allow applicants to effectively delay publication of their design for a six-month period from the priority date. Unless a request for withdrawal of application is made, registration of the design will be automatically be requested after the expiry of the six-month period from filing a designs application – currently, an application lapses after the expiry of this period.

Relief from infringement before registration

Schedule 4 of the Bill proposes to extend the current ‘innocent infringer’ defence to provide relief from infringement that occurs during the period between the filing date of a design application and the date of registration when a design is not publicly available on the Register of Designs. An alleged infringer must demonstrate that they did not know, and had no reasonable way to know, that an application for design registration existed. In such cases of innocent infringement, a court will now have discretion to refuse to award damages, reduce damages or refuse to award an account of profits.

Right of exclusive licensee to bring infringement proceedings

Under the current Act, only the registered owner of a design has the right to bring infringement proceedings. Whilst exclusive licensees have the right to exploit the registered design to the exclusion of all others, including the registered owner, they currently do not have the ability to commence infringement proceedings.

The Government has accepted ACIP’s recommendation to allow exclusive licensees the right to bring infringement actions under the Act. Under the proposed amendments, if an exclusive licensee brings infringement proceedings, the registered owner of the design must be made a defendant in the proceedings, unless the registered owner is joined as a plaintiff.

Formal requirements

The current formal requirements for design applications are largely based on a paper filing system and prescribing formal requirements in the regulations limits IP Australia’s flexibility to update requirements as technologies change. Schedule 6 of the Bill proposes to give the Registrar of Designs the power to specify formal requirements for design applications by publishing a notice setting out the determination.

Other amendments

Part 1 of Schedule 7 will clarify the standard used when assessing whether a design is substantially similar in overall impression to another. The current ‘standard of the informed user’ will be replaced with the ‘familiar person’, removing the need for the person to be a user of the product to which the design relates.

Part 2 will clarify the circumstances when a registered design can be revoked, including acts of fraud, false suggestion or misrepresentation, irrespective of whether such acts occur during the certification or registration phrase. A court must not make an order for revocation unless satisfied that, in all the circumstances, it is just and equitable to do so.

Part 3 will clarify that a design does not cease during the six months available for payment of a renewal fee provided the fee is paid within that time. If a design owner does not pay the renewal fee within the renewal grace period, the design registration will cease five days from the filing date, not on the expiry of the renewed grace period.

Commencement

If the Bill passes Parliament, Parts 1 and 2 of Schedule 7 will commence the day after the Bill receives Royal Assent. Schedules 1 to 6 and Part 3 of Schedule 7 will commence six months after Royal Assent.

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