Design rights—what next?

What’s on the horizon for the protection of design rights? John Coldham, director, and Alice Stagg, senior associate, in the intellectual property team at Wragge Lawrence Graham & Co LLP, consider the impact of the introduction of the Intellectual Property Act 2014 (IPA 2014) and the UK joining the Hague system.

Has the Intellectual Property Act 2014 significantly improved protection for designers or is it too early to say?

A number of measures introduced by IPA 2014 should improve protection for designers.

First, IPA 2014 creates criminal liability for infringement of registered designs in certain circumstances. This is intended to deter infringers from deliberate and close copying of registered designs.

Secondly, IPA 2014 introduces a new designs opinion service, to be operated by the UK Intellectual Property Office. This is likely to help designers if they are considering taking legal action to enforce their rights. They will be able to obtain an opinion as to the strength of their case and how likely it is they will win if they do proceed to litigation, for a proposed fee of £200.

IPA 2014 also introduces changes to the rules as to when a designer’s work is protected by UK unregistered design right, and who owns the unregistered design right on creation. The changes to the rules on ownership are in some ways beneficial to individual designers—if they are freelancing and they have not agreed contrary written terms, then they will now own the design rights in the work they produce, rather than the company which has commissioned them. For the companies that employ freelance designers, it is now even more important to obtain written assignments of all of the IP in the work that the designers have created.

On the other hand, where a designer is a non-EU national and is engaged by a non-EU based company, there is now more limited protection available. The qualification requirements have been tightened to encourage designers and businesses to be based in the EU (or another qualifying country, including countries such as Hong Kong, New Zealand and certain Caribbean islands) and as a result those based elsewhere will find it harder to qualify.

Finally, IPA 2014 has not addressed the overall complexity of design rights law, which involves many overlapping rights. Although this is in some senses a positive for designers—they have not lost any protection—it does mean that it remains difficult for people who are new to the field to identify the relevant rules. This was a deliberate move by the government—the alternative would have been to ditch UK unregistered design right, and this was considered to be likely to make the position significantly worse for designers, as it is often the default protection.

How will designers benefit when the UK joins the Hague system?

The Hague System for the International Registration of Industrial Designs is operated by the World Intellectual Property Organization (WIPO). An applicant can make a single international application filed with WIPO to obtain a registered design in a number of states and intergovernmental organisations, including the EU, Singapore, Switzerland, and various Central Asian and African countries.

In the UK, in becoming a member of the Hague system, the government’s intention is that designers, particularly SMEs, will be able to take full advantage of the flexibility and potential economies which it offers without having to apply via the EU’s membership. This may be of particular benefit to smaller businesses which do not need EU-wide design protection and which may not be able to afford the considerably higher cost and risk that applying for an EU-wide right incurs.

Such a company will now be able to apply for protection in the specific countries where they carry on business, including, where relevant, the UK. Their overheads in paying for, making and maintaining their portfolio of design registrations should be accordingly reduced.

What impact will the delayed repeal of the Copyright, Designs and Patents Act 1988, s 52 (CDPA 1988) have on designers?

The delayed repeal of CDPA 1988, s 52 disadvantages owners of iconic designs, and new designers looking for stronger protection for designs that they hope will become classics. It benefits those who have built up legitimate businesses selling goods that are copies of classic older designs.

Section 52 limits the term of copyright protection for artistic works to 25 years, rather than the usual 70 years after the death of the author, where the owner has made more than 50 articles that are copies of the work. In reality, this applies to things like sculptures and works of artistic craftsmanship, and is most likely to be relevant to owners of iconic designs that are no longer protected by designs or copyright.

After much debate, and as part of the Enterprise and Regulatory Reform Act 2013, the government passed a law in 2013 to repeal CDPA 1988, s 52. The repeal was originally prompted by the Court of Justice of the European Union’s judgment in Flos (Flos SpA v Semeraro Casa e Famiglia SpA: C-168/09 [2011] All ER (D) 208 (Jan)), a case about the famous Arco lamp by Achille Castiglione. This is exactly the kind of work that would be likely to benefit from this change—there are plenty of retailers of copies of classic 1960s designs, for example, that would have to stop selling them. At the moment, such sales are perfectly legitimate, provided they are sold in a way that makes it clear that they are not the originals.

Given the potential disruption to existing legitimate trade, the government ran a consultation during October and November 2013, leading to a commencement order in March 2015 which said that there should be a further five years before the repeal came into effect—ie April 2020. On 23 July 2015, however, the government announced that the commencement order has been revoked, following a claim for judicial review. So the process starts again—a new consultation, likely a new commencement order, and new transitional provisions.

For further information see the detailed Q&A on this topic with one of the authors of this article, John Coldham, published in August 2015: Repeal of s 52 on hold—good news for sellers of replicas.

In view of IPA 2014 and the growing contribution of design to the UK economy, should we revise the common perception of design as a poor relation to other IP rights?

The value of the design sector to the UK economy is significant and was a driving force behind the enactment of the clauses of IPA 2014 related to design right. For example, David Willetts, then Minister for University and Science, highlighted in January 2014, when introducing to the House of Commons the Bill upon which the Act was based, that UK business invested more than £15bn in design in 2009. More recently, in January 2015, the Department for Culture, Media and Sport (DCMS) published figures valuing the UK creative industries as a whole at £76.9bn a year.

In many of these industries, where product appearance is of primary importance, design rights have always been key. Operators in these sectors should continue to protect their design rights, especially given the evidence of the DCMS that they are outperforming competitors in other sectors. In other industries, design rights may have a lower profile. It will certainly be a positive outcome if the enactment of IPA 2014 results in further enforcement in those fields.

What is more, the recent introduction of lower-cost ways of enforcing design rights in the UK has made them more accessible, particularly to SMEs. The evidence of the UK courts is clear—it can really pay dividends for design right owners to take action, with recent successes for businesses in sectors as diverse as fashion and bathroom design.

Alice Stagg, together with Michael Carter of Wragge Lawrence Graham & Co, will be hosting a Lexis®Webinar on 11 September 2015 entitled ‘Changes to designs law and practice after the IP Act 2014’. More details are available here.

This article is republished with kind permission of WIPIT's sister site, Lexis®PSL IP & IT. For a free trial click here.The views expressed by our Legal Analysis interviewees are not necessarily those of the proprietor.

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