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Tuesday, July 5, 2016

Government responds to ACIP Review of the Designs System

By Lauren John, Associate

The federal government has (somewhat inconspicuously) released its response to the recommendations proposed by the Review of the Designs System undertaken by the now defunct Advisory Council on Intellectual Property (ACIP).

About four years ago, ACIP was asked to investigate the effectiveness of the designs system - which has been in operation since the commencement of the Designs Act on 17 June 2004 - in stimulating innovation by Australian users as well as the impact of the system on economic growth. We previously discussed the more significant recommendations made by ACIP on Scintilla TV.

In this post, we consider the government's official response to some of the key recommendations.

Grace period

The government accepted the recommendation to introduce a grace period, together with a prior user defence, into the Designs Act.

At present, an applicant can destroy its own chances of securing a registered design through premature publication, as the design becomes part of the 'prior art base’ against which the registrability requirements of newness and distinctiveness are assessed. A grace period will provide designers with more flexibility in cases of inadvertent disclosure and will better align Australia's design laws with those of other major jurisdictions, including Europe and the United States. To offset any disadvantage caused to third parties who derive their knowledge of a design through a publication covered by the grace period, a prior user defence against allegations of infringement will also be introduced.

ACIP also recommended that applicants who rely on the grace period to protect the validity of their design rights should be required to file a declaration to that effect (ie only declared prior disclosures will not form part of the prior art base). It is unclear when the government will act on its agreement to introduce a grace period as it has said that the precise details including the length of the grace period (ACIP recommended six months) and the declaration requirements will be ironed out later following 'further stakeholder consultation and development of international norms'.

Unregistered design rights

An unregistered design right gives its owner the right to prevent unauthorised copying of the design. However, in contrast to registered design rights, it is not a monopoly right. The government accepted the recommendation that Australia should not introduce protection for unregistered designs, which are available in the United Kingdom and Europe, having noted that the submissions to ACIP were generally opposed to their introduction. This emphasises the need to secure registered designs protection.

Copyright/designs overlap provisions

Despite expressing sympathy for the view that the level of confusion at the rules on the copyright/design overlap 'compels reform', ACIP ultimately skirted the issue by saying that it was at the edges of the review (being principally a copyright issue). ACIP recommended that steps should be taken to make section 18 of the Designs Act (which preserves the newness and distinctiveness of a design in certain circumstances, notwithstanding the previous use made of the artistic work which is the subject of a corresponding design) consistent with the overlap provisions in the Copyright Act. The government accepted this recommendation 'in principle', and said that IP Australia, in conjunction with the Department of Communications and the Arts, will investigate taking steps to remove any inconsistencies between those provisions. In essence, the current copyright/designs overlap regime will remain in place, which means that designers who fail to register their designs before industrially applying them risk losing both copyright and design protection.

Extension of customs seizure provisions

Disappointingly, the government has not accepted the recommendation to extend the border protection measures that currently apply under the Trade Marks and Copyright Acts to allow for the seizure of alleged design infringements which are identical to certified designs. The government has put this recommendation in the too hard basket, saying that the introduction of such measures would 'pose a range of practical difficulties' and would be resource intensive for the Australian Border Force to implement.

What next?

We do not expect that a change of government – if that were to occur following the yet-to-be-determined election – will result in any changes to the responses to ACIP's recommendations.

We will keep you updated on the likely timing and form of any proposed amendments to the Designs Act.

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