A Welcome Proposal to Introduce a Grace Period Into the Australian Designs Act

The Designs Amendment (Advisory Council on Intellectual Property Response) Bill 2020 (Bill), with important changes to designs law, is currently before Senate for consideration. It includes a much-anticipated change to implement a grace period that will allow designers to publish their designs before applying for design protection.

Presently to get an enforceable design right, the design must be “new and distinctive”, meaning that the design must not have been disclosed publicly before the design was filed. For many businesses, this non-publication requirement has made the designs regime impractical since they would not want to incur the cost of seeking design protection unless the design turned out to be commercially successful. For businesses releasing hundreds of new designs to the market each year, this cost is significant.

Businesses can try to predict the success of their designs but in many cases they just don’t know whether a design will be successful (and likely to be copied) until after the design had been released to the market. By this time the design is invalid.

For many designers and businesses, the introduction of the grace period will be welcome news by the proposed Bill, however, they should be aware that accompanying the new grace period is a “prior use” infringement exemption. Would-be infringers will be able to defend an infringement action based on their use of the design during the grace period.

The changes introduced by the Bill are as follows:

  • The 12-month grace period will be introduced. For the purpose of deciding whether a design is new and distinctive, any publication or use of a design (not necessarily the subject design) by the designer or the owner of the subject design that occurs in the 12 months before the filing date will be disregarded. Important qualifications to this rule are that:
    • Publications of designs by the Designs Office in Australia and overseas designs offices will still count towards the assessment of the “new and distinctive” requirement.
    • Where another, substantially similar design (“other design”) has been published by a third party within that 12-month grace period, the Designs Office will assume that the third person has obtained or derived the other design from the designer or owner of the applied-for design. This means that if someone is attacking the validity of the registered design on the basis of the other design, they will need to show that the other design was not derived from the registered owner of the design.
  • A prior use exemption to the infringement of designs will be created. Third parties will have a defence to infringement where they start using a published design during the grace period, or if they take “definite steps” to start using a published design during the grace period. “Definite steps” includes contractual steps or otherwise and includes steps taken within or out of Australia. The purpose of this exemption is to protect businesses who have invested in a publicly disclosed design during the grace period, when they cannot know if the designer intends to seek registered design protection.
  • The innocent infringer defence will be available any time after the design’s filing date. Currently, this is available only when infringement occurs between the filing date and the registration date. Since publication of the design can be delayed for up to 6 months after the filing date, this means that a person can infringe a design that they would not have been able to find on the Register of Designs. The innocent infringer defence will extend to those circumstances.

The introduction of a grace period would be welcome news to many of our clients that have found the current law relating to novelty difficult. It should help with clients that have found their work quickly copied where no design application was filed. It should assist fashion clients releasing hundreds of designs per year.

We will monitor progress of the Bill and will provide further news as soon as the bill progresses through parliament.

By Chris Round, Savannah Hardingham and Olivia Coburn

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