The registered designs system wakes from its slumber

By Richard Hoad
02 Sep 2021

The biggest practical obstacle to obtaining registered design protection is about to disappear, as a result of some changes to Australia’s designs laws which have just been passed, so all businesses involved in product design should be reassessing their intellectual property protection strategies.

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When most normal people think about intellectual property (by definition, intellectual property lawyers are not normal), their minds turn to copyright, or trade marks, or perhaps patents. The more astute may even think of all three. However, very few people think about registered designs – the fourth of the main pillars in Australia’s statutory intellectual property system. Registered designs have become the ugly duckling of Australia’s IP system. As a result of some changes to the law which have just been legislated, as well as some more sweeping changes which are under active consideration, that may be about to change.

Making the design law regime fit for purpose

The registration system for designs gives right holders protection for the overall appearance of a product resulting from one or more of its visual features – such as its shape, configuration, pattern or ornamentation. Importantly, a design registration does not protect the function of a product. Rather, it provides protection for the visual appearance of a product. 

It has long been recognised that the registered designs system is underutilised by Australian businesses and is not working optimally to either encourage design innovation or reward innovators. In May 2012, the Advisory Council on Intellectual Property (ACIP) was asked to undertake a review of Australia's designs system in order to assess its effectiveness in stimulating innovation and encouraging economic growth. ACIP published its report way back in 2015.

After a period of consultation through late 2019, IP Australia last year announced plans to implement ACIP’s recommendations for law reform. The Bill to introduce these changes – the staidly-named Designs Amendment (Advisory Council on Intellectual Property Response) Bill 2020 – was passed by Federal Parliament on 30 August 2021.

So what changes does the Bill introduce?

Grace period for applying for a design registration

The most significant change will be the introduction of what is called a “grace period”.

For a design to be registrable, it must be new and distinctive when compared with the prior art base for the design as it existed before the priority (filing) date. This means that the design must not be published or publicly used before filing an application (ie. it must remain a secret). If a designer inadvertently publishes their design before filing – even by including a photograph of the product in pre-launch publicity material / product catalogues – the design would generally become part of the prior art base and would therefore not be capable of registration. This happens all too frequently in practice.

A “grace period” is a period of time before the filing of an application where any publication or public use of the design by the design owner will not deprive the design of its newness. Australia's patent law allows for a grace period prior to filing, but there has been no equivalent provision in Australia’s designs law. The lack of a grace period is perhaps the greatest weakness in Australia’s current designs law system.

The reforms will introduce a 12 month grace period – meaning that designers will effectively have a period of 12 months to apply for registration after publishing or using their design. In an ideal world, registration would still be sought before first publication or use, partly because it is easier not to have to rely on the grace period, but mostly because many other countries do not have a grace period or, at least, have one of a shorter duration. Nonetheless, this is a critical reform that provides designers with meaningful protection from inadvertent disclosure. Such inadvertent disclosure is often a result of a lack of awareness of the operation of the designs registration system.

Additionally, for design innovators who are prepared to rely on the grace period, the change will allow them some time to test their products in the market to assess their commercial viability, before committing to pay the costs of seeking registration. This is particularly useful for industries where designs have a short-lived shelf life and may form part of a large range, such as the fashion industry.

Prior user exemption

Allowing designers to delay filing an application for a registered design for 12 months has the potential to create difficulties for third parties who may independently come up with a design during that grace period. Such third parties could launch a product which infringes a design which is later registered in reliance on the grace period, even though no application for registration had been filed when the third party first starting using its design. This problem will be addressed by introducing a prior use defence for third parties who commence using a design before an application for registration is filed. These changes are modelled on analogous provisions in the Patents Act.

Standing for exclusive licensees

Often it is not the registered owner of the design that commercialises the design. Rather, the registered owner may license someone else to do so. Unlike other intellectual property rights, however, an exclusive licensee has not been able to sue third parties for infringement. This has been a significant constraint on the effectiveness of licensing arrangements for registered designs. This is about to change: the amendments will permit exclusive licensees to bring infringement proceedings.

Standard of the informed user

There are also several more technical changes. For example, the standard by which the validity of a registered design is assessed will be clarified. There have been divergent interpretations of the statutory requirement that the validity of a design is to be assessed by reference to the “standard of the informed user”. The amendments clarify that (curiously) the “informed user” does not need to be someone who uses the products in questions, but rather someone who is familiar with such products. This enshrines the approach taken by the Federal Court in Multisteps Pty Ltd v Source & Sell Pty Ltd [2013] FCA 743.

When will these changes come into effect?

The clarification regarding the standard of the informed user will come into effect the day after the Bill receives Royal Assent. However, all of the other changes discussed above come into effect six months after the Bill receives Royal Assent. So, for the moment, it remains critical that businesses seek registrations of their designs before disclosing them publicly.

Further intellectual property reforms are coming

Over the past couple of years, IP Australia has also been consulting with stakeholders (including the design industry) about further changes to Australia’s registered designs law. A number of significant changes are under active consideration, including regarding protection for partial and virtual designs and possible changes to recognise that design is an iterative process. We will keep you informed as these proposals are refined over the months to come.

Taking advantage of the changes to designs law

Following the passage of the Bill, reform of Australia's designs law regime has taken a long-awaited step forward. In particular, the introduction of a grace period means that businesses which have previously considered registered design protection to be an overly costly process should now be reconsidering their IP protection strategies. In six months or so, it will be possible to seek design registration even where the design has been disclosed inadvertently (eg. at trade shows or in pre-launch publicity). It will also be possible to road test design concepts to assess their commercial potential (while recognising that equivalent “grace periods” may not exist overseas). Design-intensive industries have been calling for this change for many years. They have finally been heard.

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Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this communication. Persons listed may not be admitted in all States and Territories.