Introduction of a Grace Period for Registered Designs

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New legislative changes to the Designs Act 2003 (Cth) could have a significant impact on those in the creative industries. Particularly, to name a few examples: fashion designers, furniture designers and jewellery and accessory designers. One change which has yet to be implemented following the release of the Productivity Commission Inquiry Report into Australia’s current IP system (but was affirmed in the same report) is the introduction of a grace period for the filing of registered design applications. The change could mark a shake up in the designs registration world and target two main problems with designs registration:

  1. inadvertent disclosure
  2. cost

Section 18(1) of the Designs Act

The problem with design protection for designers is two-fold but stems from the same section in the Design Act 2003 (Cth). Under section 18(1) of the Act a design is only a registrable design if it is “new and distinctive when compared with the prior art base for the design as it existed before the priority date of the design”.

This section in conjunction with section 18(2) means that if a designer has publicly released his or her design in Australia, he or she can no longer register it. This is because “prior art base” means:

  • Designs publicly used in Australia; and
  • Designs published in a document within or outside of Australia.

In short: If a designer releases his or her design into the public, this design becomes part of Australia’s prior art base. As such, any duplicate of the design which the same designer subsequently submits to IP Australia for registration and protection will not be new and distinctive compared to the prior art base in Australia, as that design is already in the public realm. The design cannot therefore be registered.

The problem with this is that designers cannot test their products in the market before investing into design registration.

Inadvertent Disclosure

The first problem with these sections is that designers and/or creative industry professionals who are unsure of the legislation release their products into the market place before protecting their designs with IP Australia. Little known to many designers, this publication of designs automatically means that the designer cannot then register the design later with IP Australia. The published version of the design will conflict with the version a designer is trying to register.

Without registration, designers then have no form of protection over their designs, leaving the designs free for copiers to duplicate without legal consequence.

Stakeholders noted in the Productivity Commission Inquiry Report that many designers release their products into the public realm (and thus inadvertently disclose their design) because the designers have poor knowledge of design laws. This was one of the main reasons that the Australian Government agreed to introduce a Grace Period to design registration applications.

The Cost of Design Registration

It has been argued that Australia’s current design registration system is not appropriate for many industries, particularly in which the main products are ever-changing to keep up with the cyclical nature of the industry’s trends. An example of this is the fashion industry.

In the fashion industry, trends can be created and then subsequently die within the space of six months. As such, it appears that the cost of registering one particular design for 5 years at a cost of approximately $250 per design is not worth the money if the design could fail to take off or be out of trend in one year. In such circumstances there is no way to guarantee a financial return on the registration or the success of the particular item before it is launched into the market place.

The introduction of a Grace Period, however, could change all of this.

The Grace Period

In March 2015 the Advisory Council on Intellectual Property (“ACIP”) released a number of recommendations to the Australian Government on changes which should be made to Australia’s IP system. ACIP’s twelfth recommendation in its Review of the Designs System – Final Report was the introduction of a six month Grace Period in conjunction to a Prior Use Defence to the Designs Act.

The introduction of a Grace Period would mean that a designer could release his or her design into the market place either unintentionally or intentionally to test the market place and still be able to register the same design later, provided the design was registered with IP Australia within six months.

This means:

  • Designers who accidentally publish a design would not automatically lose the right to register and thus protect the design; and
  • Designers with a number of products could test each design in the market place for a number of months before registering and protecting the most profitable designs.

The Government responded by accepting the recommendation for the introduction of Grace Period in the Government response – ACIP Review of the Designs System and affirmed this decision in the Productivity Commission Inquiry Report in 2016. The Government has not, however, agreed on the time period for the Grace Period as of yet and this will require further consultation.

Australia’s possible accession to the World Intellectual Property Organisations’ Designs Law Treaty would mean that Australia would have to introduce a Grace Period for between six – 12 months.

Prior Use Defence

In the Productivity Commission Inquiry Report the main concern expressed by stakeholders with introducing a Grace Period to the designs registration system would be to prejudice third parties. Here, third parties who check the public register of designs, see no record of a design similar to theirs and commence to use such a design would be prejudiced if another party then proceeded to register the design later. As such a prior use defence will be introduced so that those parties who use a design prior to someone else registering it will be protected.

Our Thoughts

Design registration is certainly worth the cost for profitable designs. The introduction of the new Grace Period, however, will allow designer better access to effective design protection by allowing them to test their designs in the market place before registering them with IP Australia. The Grace Period will also allow designers the opportunity to still register and protect their designs even if they inadvertently disclose the design to the public prior to registration.

 

If you are a designer and are unsure about how to protect your rights or interests, or would like more information on design registration please contact our Business Development Team on (07) 3252 0011 to put you in touch with one of our Intellectual Property Lawyers.

This article was written by Eduardo Cruz.