Double the grace and familiar non-users: Designs Act amendments now in effect

What you need to know

• The Designs Amendment (Advisory Council on Intellectual Property Response) Act 2021 (Cth) has received royal assent.
• Designs filed on or after 11 September 2021 will be assessed against the "new" standard of a familiar person.
• Other amendments, including the introduction of a 12 month grace period, and the ability for exclusive licensees to pursue infringers, will come into effect on 10 March 2022.

What you need to do

• Review and update any internal policies or procedures on assessing and filing for design registration in Australia.
• Be particularly mindful of the changes to the innocent infringement provisions, and consider taking steps to put potential infringers on notice during the period between filing and registration.

Background to the reforms

Designs law reform has been on the horizon in Australia for a long time.  

The Advisory Council on Intellectual Property (ACIP) review which led to these reforms was conducted from 2012 to 2015.  That review found low awareness of design rights and reported difficulties navigating the system by those who used it.

The Government accepted a number of ACIP's recommendations, many of which have now been implemented in the Designs Amendment (Advisory Council on Intellectual Property Response) Act 2021 (Cth) which received royal assent on 10 September 2021.

The corresponding Designs Amendment (Advisory Council on Intellectual Property Response) Regulations 2021 were registered on 12 November 2021.

The Government has estimated these reforms will improve the registered designs system to support design intensive industries that are estimated to contribute 68 billion dollars annually to the economy, or more than 3.5% of Australia's GDP.  No attempt was made by the Government to quantify the likely productivity improvements associated with these reforms (or the percentage of firms in "design intensive industries" who actually seek design registration).

The amendments 

The amendments made by the amending Act largely commence from 10 March 2022.  The two exceptions, which commenced on 11 September 2021 are:

1. amendments to the standard of "informed user"; and
2. minor amendments to revocation processes.

Informed user is now familiar person

The standard of "informed user" is an important aspect of the assessment of similarity between designs - which is critical to both validity and infringement.  The previous test referred to a person who "is familiar with the product", but defined this as "the standard of the informed user".  This led to some disagreement over whether the relevant perspective from which designs were assessed was just users (ie, ultimate consumers), or whether it might also include others in an industry who are familiar with the products but not users of them.

The amended Designs Act does not change the wording of the definition, but adopts a different defined term of "the familiar person".  The amendments also expressly qualify that this familiar person may or may not be a user of the product.  This is effectively siding with the interpretation of the standard of the informed user adopted by Justice Yates in Multisteps v Source & Sell (2013) 214 FCR 323.¹ It remains to be seen whether this has any practical effect on the way courts and the Office assess similarity.

The introduction of a 12 month grace period 

The Designs Act provides a period of time during which prior publications of a design are to be disregarded when deciding whether a design is new and distinctive.  This is known as the grace period.  

With effect from 10 March 2022, the grace period will be increased from six months to twelve months.  This provides increased protection to designers who accidentally publish a design before seeking legal protection, or who might not know that registration was required. The amendments align Australian designs law with other countries which provide a similar grace period.

The introduction of a prior use infringement exemption 

The new prior use infringement exception is based on similar provisions in the Patents Act 1990 (Cth).

The new provisions protect people who start using a design before the priority date of its application for registration, and either: 

• independently created an identical or substantially similar design; or
• copied the design from a public disclosure from the designer, which was made before the priority date (eg, a disclosure which was rescued by the grace period).

Extension to the innocent infringement defence

The amending Act has also expanded the scope of the innocent infringement defence.  From 10 March 2022, the defence will protect third parties who otherwise infringe a design during the time between the filing date of a design and its registration (noting that in Australia this time is typically very short).  This remedies the issue that designs are not publicly available during this time so third parties cannot become aware of an infringement risk.

To take advantage of the defence the person must prove that they did not know, and had no reasonable way to know, that an application for design registration had been made.

Designers and companies which rely on design registrations should consider publicising the existence of design applications to reduce the likelihood of this defence applying.

Exclusive licensees may commence proceedings

The changes also bring the designs system in line with the Australian patent and trade marks schemes, and allow exclusive licensees of design rights to take action against infringers.

Consistent with the patent and trade mark systems, the relevant licensee must be truly exclusive.

The publication option has been removed and all design applications will automatically proceed to registration

Previously, applicants for a design registration could request that the application be published or registered.  The publication avenue was very rarely used, and typically only used by those filing an application as a form of defensive publication (i.e. destroying the newness of subsequent similar designs). 

Following amendments, the processing of a design application is streamlined such that the publication option has been removed, and a registration will be automatically "requested" after six months.

Design applicants should be mindful of this automatic request, as design applications become public after registration occurs. 

Design application requirements streamlined

The process for the Registrar to update the formalities for design applications has been updated and streamlined.  This is intended to allow the Registrar to manage design filings and better provide for electronic filing.  

The existing formalities are based on a paper system, while 99% of design applications are filed electronically.

What do you need to do in light of these changes?

Companies which rely on design registrations should consider their portfolio and dealings with designs in light of these changes.  Are any licences truly exclusive?  If you have granted exclusive licences do they need to be amended to address how any infringement litigation will be managed? Do you have a process in place for managing the 6 month automatic registration (and associated publication of the design)?  Should you take any steps to put potential infringers on notice of design applications?

If you have any questions about your designs, we would be happy to discuss them with you.