New 12 month “grace period” introduced to Australian Designs legislation

On 30 August 2021, The Designs Amendment (Advisory Council on Intellectual Property Response) Bill 2020 (Bill) was passed by the Australian Parliament. Amongst other changes the Bill effects to the Designs Act 2003 (the Designs Act), it finally introduces into Australian law a “grace period” for applicants, bringing the law in line with other jurisdictions which allow such a grace period.

While Australian patent applicants have had the benefit of a grace period since the early 2000’s, no such benefit has previously been afforded to applicants for design registration. In particular, international applicants filing in Australia have been vulnerable to self-invalidating Australian design applications by assuming they had the benefit of such grace period.

The Bill introduces other key amendments to the Designs Act and is the outcome of recommendations by the Advisory Council on Intellectual Property’s review of the Australian designs system.

There are 7 schedules in the Bill, which introduce the following amendments:

  • Schedule 1: introduces a 12-month grace period to file a design application after disclosure.
  • Schedule 2: provides for the protection of third parties from design infringement if they started using a design before an application for registration is filed.
  • Schedule 3: removes the option to publish a design without registration. The schedule also simplifies the process of requesting registration.
  • Schedule 4: introduces protection for those who infringe a design between filing and registration but had no way of knowing the design was protected.
  • Schedule 5: allows exclusive licensees of design rights to take action against infringers without having to rely upon the owner of the design.
  • Schedule 6: streamlines the process for changing formal requirements for design applications.
  • Schedule 7: introduces minor technical changes to clarify some matters in designs legislation. That is, clarification of the standard of the informed user, revocation of registration of a design and renewal of registration of design.

Schedules 1-6 and Schedule 7 Part 3 will commence 6 months after the Bill receives the Royal Assent. Schedule 7 Parts 1 and 2 will commence the day after the Bill receives the Royal Assent.

We discuss some of the key amendments in further detail below.

Schedule 1: Grace period

Schedule 1 introduces a 12-month grace period for filing a design application to protect designers who disclose their design before filing for protection.
A design must be filed within 12 months of disclosure to receive these benefits.

A person can file for protection during the grace period if the original disclosure of the design was by:

  • the designer or designers;
  • the owner of the design (if this is someone other than the designer;
  • a party authorised by the designer or design owner
  • a party who obtained the design from the designer or design owner without their permission

Certain publication of designs aren’t eligible for the grace period, namely by the Registrar of Designs, or foreign and international designs offices.

Schedule 2: Infringement exemption for prior use

Schedule 2 introduces an exemption to protect third parties from infringing someone else’s design. However, this only applies if the third party starts using a design before the priority date of a registered design, whether such use was as a result of the design being independently created, or if it was copied as a result of disclosure by the design owner before the priority date.

Schedule 2 also protects people who legally obtain products from a third party.

In such circumstances, a person will be able to continue to keep:

  • using the design;
  • making products in accordance with the design;
  • importing products in accordance with the design; and
  • selling products in accordance with the design.
Schedule 4: Relief from infringement before registration

Schedule 4 expands the scope of the ‘innocent infringer’ defence. This defence prevents third parties being liable for infringing a design if they did not know the design was registered.

The amendment means that the defence now also applies to the period between the filing date of a design application and the date of registration (approx. 6 months). This is important because in this period, the design is not publicly available on the Register of Designs, so a search of the Register will not reveal that a design has been protected.

An innocent infringer must prove they did not know and had no reasonable way of knowing the design was protected.

In such cases where the defence is available, a court will now have the discretion to:

  • refuse to award damages
  • reduce damages
  • refuse to award an account of profits.
Schedule 5: Right of exclusive licensee to bring infringement proceedings

Schedule 5 gives exclusive licensees the right to bring infringement actions under the Designs Act without having to rely upon the owner of the design.

The design owner must still be given an opportunity to play a role in the action if they wish.

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