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UK INTELLECTUAL PROPERTY BILL

2013-08-20

INTRODUCTIONDesign law in the UK is often criticised as being overly complicated. In response to these criticisms, The Intellectual Property Bill (“IP Bill”) has been drafted to try to reduce this complexity and make UK Design law more “robust”.The IP Bill had its Third Reading in the House of Lords on Tuesday 30 July and is now proceeding to the next stage, the First Reading at the House of Commons.

THE PROPOSED CHANGES?

There are many aspects to the new IP Bill but one of the most controversial is the introduction of criminal penalties for intentionally copying UK registered designs.

Under the proposed wording of the IP Bill (Section 13), the Registered Designs Act (RDA) will be amended to include a new Section 35ZA providing that a person commits a criminal offence, and is liable for a term of imprisonment not exceeding ten years (or a fine or both), if in the course of a business they knowingly copy a UK registered design so as to make a product exactly or substantially to that design. Moreover, anyone that (in the course of a business) offers or puts on the market, imports, exports or uses such a product, or stocks it for one or more of those purposes, also commits an offence under the proposed Section.

SO IS THIS A GOOD THING?

The proponents of the new Bill have argued that there are criminal provisions for trade mark infringement and copyright infringement under the Trade Mark Act 1994 (Section 101(5)) and Copyright, Designs and Patents Act 1988 (Section 110) respectively. Therefore, it seems a natural extension to include criminal provisions for Design infringement. Moreover, individual designers who go to the expense of obtaining registered design protection, have often felt that the civil remedies currently available are not a sufficient deterrent to design infringement.

Others have, however, expressed a more cautious view to the proposed changes.

The difficulty with design law is that it can be a very subjective test as to whether one design actually infringes another. The current proposed wording under the IP Bill states that a criminal offence is committed if you copy a design exactly, or substantially to the design. What does “substantially to” mean in this context and why has this wording been introduced here when it is not included in the (civil) infringement provisions within the Registered Designs Act?  One can envisage situations whereby users of an allegedly infringing design could be held criminally liable, even when they had taken steps to distinguish their product from the registered design.

THE LATEST DRAFT

The latest draft of the IP Bill has tried to alleviate these concerns by including new Section 35ZA (5) (b) RDA which states that there is a defence under these provisions if the defendant “reasonably believed” that he did not infringe the design.

Whilst this can be seen as a “softening” of the proposed Section, our concern is that it only serves to create greater uncertainty.  It is anticipated that assessing whether an alleged infringer was aware they were infringing will be very difficult to prove.  Moreover, does the term “infringing” here refer to the test for criminal liability introduced in the new proposed Section 35ZA (“…exactly, or substantially to the design…”) or to that in the existing Section 7(1) RDA relating to (civil) infringement (“The registration of a design under this Act gives the registered proprietor the exclusive right to use the design and any design which does not produce on the informed user a different overall impression”).  On the face of it, the two tests are quite different.

WHERE DO WE GO FROM HERE?

One alternative amendment that has not been adopted is to remove the element of the provision that causes the greatest uncertainty, namely the encompassing of “copies” that are “substantially to” the design in question. It seems unusual to include this terminology when it is not included in other sections of the RDA. By removing this “substantially to” criteria, liability would only occur if the design were copied exactly, thereby creating a higher threshold before criminal proceedings can be invoked.  Whilst it might be argued that this could enable copyists to avoid liability by making small changes to the design, such an amended Section would appear to satisfy the Bill’s proponents’ main concern which is the manufacture and sale of low cost replicas of registered designs.

As mentioned, the IP Bill is now proceeding to the first of three readings in the House of Commons and so it will be some time before we have any further news, but we will keep you posted. One thing is for sure - the introduction of criminal liability, in whatever form, will be a further deterrent to potential infringers and so further increases the need to consider registered designs as part of your IP portfolio.

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