Australian designs law undergoes a welcome update

The Designs Amendment (Advisory Council on Intellectual Property Response) Act 2021 (Act) has come into force following many years of investigation, consultation and review of Australia’s registered designs laws. The aim of the amendments is to allow the registered designs system to better support designers and encourage innovation in Australia. In addition to the introduction of a grace period for applying to register a design which will provide an important safety net for designers, there are a number of additional changes which aim to streamline the design application process, clarify the law and plug gaps in the existing legislation. We set out and examine the key changes introduced by the Act below.

Grace period for filing design application

The introduction of a grace period is the most important change introduced by the Act. Currently designers who, either inadvertently or due to ignorance of the law, publish their design before filing a design application, forfeit their right to obtain a valid registered design. This is because any use of the design or publication of it in a document anywhere in the world (without appropriate confidentiality undertakings in place) would see the design form part of the prior art base against which a design would be assessed during examination. The prior publication of the design would render the design not new and distinctive, and therefore incapable of being certified and enforced. 

The new grace period is intended to prevent designers from losing their rights in this way and brings Australia into line with the designs laws of many other countries, including the EU and the United States. For any publications or uses of a design that occur on or after 11 March 2022 (when the grace period amendments are likely to take effect), designers will be permitted to rely on the 12 month grace period. The disclosures of the design which can be relied upon under the grace period provisions are disclosures by the designer/s, an employer or successor in title, an authorised party (such as a marketing company) or even an unauthorised party. 

Importantly, publication by a foreign Designs Office will not allow an applicant to rely on the grace period. It is therefore important that if a person files a design application in another country, it files the corresponding Australian application within 6 months and claims the earlier priority date under the Paris Convention.

This significant change will give designers more flexibility during the early stages of getting registered design protection. Designers will be able to work more freely with third parties on their designs, without concerns that disclosures will inadvertently invalidate their designs. They will also be able to bring their product to market, and get a sense of whether the product will enjoy commercial success, and therefore warrant obtaining design protection.  Nevertheless, as discussed below, designers should still aim to apply to register their designs as early as possible and treat the grace period as more of a “safety net” as the Act also introduces protections for those who infringe the design during the grace period.

Infringement exemption for prior use

As a result of the introduction of the grace period, the Act now introduces a defence to infringement if a person starts using a design before it is published on the Register – that is, during the grace period. The defence applies if the third party had used a design, or had taken definite steps to do so, prior to the design application being filed. The defence continues to apply after the design has been filed, so that the third party can continue use of the design after it is registered without infringing it. 

The existence of this defence highlights the risk to designers of waiting too long to file the design application after publicly disclosing the design – that is, filing it late into the 12 month grace period. Whilst the grace period offers an important and useful safety net, “best practice” will still be to file a design application as soon as possible and, ideally, before any disclosure.

Relief from infringement before registration

Currently, there is a gap in the law that is designed to protect an innocent infringer from liability for their infringing acts. Innocent infringers are those who were not aware that the design was registered at the time they engaged in the infringing activities, and had taken reasonable steps to ascertain whether the design was registered. In cases of innocent infringement, the court is permitted to refuse to award damages or an account of profits or reduce the award of damages. However, the current law did not extend this protection to the period between when a registered design owner files their application and it becomes registered (which can be a period of several months). The changes extend the protection for innocent infringers to any time after the registered design is filed. 

Right of exclusive licensee to bring infringement proceedings

The Act gives exclusive licensees of a registered design the right to bring proceedings for infringement. Currently, only a registered owner of a design can commence an infringement action. This change brings the rights of exclusive licensees of registered designs in line with the rights of exclusive licensees of patents, trade marks and plant breeder’s rights. If an exclusive licensee commences infringement proceedings, it is required to join the registered owner of the design as a defendant to the proceedings, unless the registered owner is joined as a plaintiff. The registered owner will not be liable to pay costs if joined as a defendant if it does not participate in the proceedings.

Standard of the informed user

The Act introduces changes to the standard of the ‘informed user’, being the notional person whose knowledge and characteristics are used by an examiner or court to assess whether one design is substantially similar in overall impression to another. Currently, the distinctiveness of a design is considered by the hypothetical character referred to in the Designs Act 2003 (Cth) as the “informed user”. The Act clarifies that the notional person does not need to be a ‘user’ of the products in question,  instead the standard is that of a person who is ‘familiar with’ the product or similar products. The changes will give IP Australia and the courts more certainty and clarity about the views they can consider when assessing the substantial similarity in overall impression of designs, encompassing a broader range of consumers, experts and skilled persons. This test has come into effect immediately and will be applied when examining all designs applications filed on or after 11 September 2021.

Changes to registration and publication provisions

Currently, if registration of a design is not requested at the time an application is filed, the applicant has six months to request registration. If the applicant fails to do so, the application will lapse. The Act has amended the application process so that, if registration is not requested at the time of filing or within six months, the application will automatically become registered (assuming that a formalities report was not issued and remains unanswered).

Under the existing laws, an applicant for a registered design could elect to either register it or publish it. The publication option was rarely used – a search of the online system shows that only 25 designs are currently listed as published in Australia. The purpose of publication was to put the design into the prior art base, but without obtaining any registered design protection in respect of the product. The Act dispenses with the option of publication. 

Key takeaways

These amendments are designed to make the designs system more widely available, user friendly and comprehensive. This by no means represents the end of current efforts to improve the ability of innovators and designers to protect their intellectual property rights in Australia. IP Australia has recently completed a year of research and consultation in relation to Australia’s design economy, and is continuing to consider issues such as iterative design protection, protection for non-physical or virtual products and product parts as well as streamlining the design protection process. As a result, the registered designs system is likely to undergo a continuous process of expansion and improvement in the coming years.