Intellectual Property Bill published

Practical Law UK Legal Update 1-528-6105 (Approx. 9 pages)

Intellectual Property Bill published

by Practical Law IPIT & Communications

Background

Designs law and consultation

Design law is primarily governed in the UK by the Copyright, Designs and Patents Act 1988 (CDPA), the Registered Designs Act 1949 (RDA) and the Community Designs Regulation (6/2002/EC) (CDR).

Following the Hargreaves review of intellectual property, the UK Intellectual Property Office (IPO) acknowledged that it had limited information on how important design rights were to growth and on whether the current legal framework for design protection was meeting the needs of business. It conducted economic research and issued a call for evidence and an associated survey to acquire this information. Responses to the call confirmed that the law needed to be simplified and improved in a number of areas to meet the needs of this business sector more fully (see Legal update, Government publishes summary of responses to designs consultation).

In April 2013, the government published its response to the consultation and proposals for reform (see Legal update, Government responds to designs consultation). Among its key proposals were the retention of UK unregistered design right (UDR); the redefinition of UDR to prevent claims being based on very small parts of articles; the tying of commonplaceness to a specific geographical area; and changing the first owner of a design from the commissioner to the designer. In addition, the government planned to introduce criminal sanctions for deliberate copying and a new route of appeal to the Appointed Person.

For more information on the current systems of design protection, see Practice notes, Overview of Registered designs and Overview of Design right.

Patent law

Patents Act 1977 and consultation

The Patents Act 1977 (Patents Act) is the principal statute governing the patents system in the UK and it gives the Comptroller-General of Patents Designs and Trade Marks (Comptroller-General) and the Patent Office (operating as the IPO) certain powers and duties in relation to the running of the patents system. This includes the examination of patent applications, the granting of patents and acting as a quasi-judicial body with jurisdiction over certain legal proceedings concerning patents.

In December 2012, the IPO launched a consultation on proposed changes to the Patents Act in the light of the Hargreaves review. Among its proposals were to:

Allow the sharing with other patent offices of information relating to unpublished patent applications in order to improve international co-operation and reduce backlogs.
Allow patent marking to be done by using a website address rather than having to list all the relevant patents on the product itself.

The other proposals related mainly to procedural matters, including clarifying when it is necessary to pay renewal fees on European patents that are revoked but restored on appeal.

In April 2013, the IPO published the government's response to the consultation (Legal update, IPO publishes results of consultations on changes to Patents Act and opinions service). The responses on the proposed amendments to the Patents Act were generally favourable and the government proposed to take the necessary parliamentary steps to make the appropriate amendments.

Unified Patent Court

On 19 February 2013, the government, along with other EU governments, signed the Agreement on a Unified Patent Court (UPC Agreement) (see Legal update, Unified Patent Court Agreement signed). There are two related EU Regulations: Regulation (EU) No 1257/2012 for the creation of unitary patent protection and Regulation 1260/2012 applicable to translation arrangements, which were adopted in December 2012.

The UPC Agreement and Regulations mean that it will be possible to apply to the European Patent Office for a single patent which will be effective in all EU member states, except Italy and Spain. Infringement and revocation actions in relation to the unitary patent will be subject to the exclusive competence of the new UPC. The UPC will also have competence to hear infringement and validity cases relating to existing and future European patents. It will consist of a court of first instance and a court of appeal. For more information, see Legal update, Final version of unified patent court agreement published and Article, A unified Europe? Unitary patents and the unified patent court.

Freedom of Information

The Freedom of Information Act 2000 (FOIA) contains various exemptions (absolute and qualified) from the duty to disclose information. For more information, see Practice note, Freedom of information.

Facts

Following its announcement in the Queen's Speech (see Legal update, Intellectual Property Bill announced in Queen's Speech), the government has now published the Intellectual Property Bill, which will reform the law relating to designs and patents. The Bill's second reading is scheduled to take place in the House of Lords on 22 May 2013.

The Bill is in four parts: Part 1 concerns designs; Part 2 concerns patents; Part 3 contains various provisions concerning different areas of intellectual property law, including freedom of information; and Part 4 contains consequential and transitional provisions.

Part 1: Designs

The explanatory notes to the Bill state that the clauses relating to designs have three broad purposes, namely to:

Simplify design law and get the intellectual property framework to better support innovation.
Help improve the enforcement of designs and understanding the design rights of others.
Improve processes associated with the design framework, such as better provision of information.

These aims are in line with those highlighted in the IPO's 2012 consultation on designs.

Clause 1: Unregistered designs: Meaning of "design" and "original"

Clause 1(1) of the Bill amends the definition of UDR with the removal of protection for " ... 'any aspect' of the shape or configuration of designs ... " in section 213 of the CDPA. The idea behind the amendment is to prevent claims being based on very small parts of articles.

The meaning of "commonplace" in section 213(4) of the CDPA is uncertain in relation to its geographical coverage. Clause 1(3) aims to remove that confusion by extending the definition to "commonplace in any qualifying country", with the definition of qualifying country remaining as set out in section 217, which includes the UK and EU member states.

Clause 1(4) provides that the new definition will only apply to designs created after the change in the law and will not be applied retrospectively.

Clause 2: Ownership of unregistered designs

Clause 2 changes the rule that the commissioner of a UDR is the first owner, so that it will instead be the designer. The same amendment is made to registered designs (see Clause 6: UK Registered designs: Ownership of design and application for registration). This will align UK designs with the EU system and remove the distinction between UK designs and copyright.

Clause 3: Qualification criteria for unregistered designs

The amendments made to sections 217 to 220 of the CDPA by clause 3 are intended to simplify and expand the concept of qualification so that those who are economically active in the EU may qualify.

Subsections (1) and (5) amend "qualification by first marketing". Whether a design qualifies for protection because of the circumstances in which it was first put on sale ("first marketed") will now depend on the country in which those sales took place, rather than on the nationality or place of residence of the person who did the marketing ("qualifying individual").

Other subsections in the clause are generally to ensure that the changes are implemented consistently by removing other references in the CDPA to "qualifying individual". "Qualification" will be centred on a "qualifying person", which is defined according to where that person resides or carries on business activity (the "qualifying country").

Subsection (4) also removes the reference in section 218 of the CDPA to computer-generated designs as this reference is no longer considered necessary.

Clause 4: Unregistered designs: Infringement: exceptions

This clause inserts sections 244A and B into the CDPA, introducing new exceptions to infringement of UDR to mirror those in the RDA and bring them in line with those available under the EU system.

New section 244A introduces protection from infringement for private acts, experiments and teaching. These defences are similar to those found in relation to copyright (see, for example, section 32 of the CDPA).

New section 244B creates exceptions relating to overseas ships and aircrafts.

Clause 5: Registered Community design: infringement exception

Clause 5 extends the defence in section 53 of the CDPA to infringement of UK artistic copyright for those with permission to use a corresponding UK registered design to registered Community designs. (The defence is not being extended to UDRs.)

Clause 6: UK registered designs: Ownership of design and application for registration

Clause 6(1) amends section 2 of the RDA so that where a design has been commissioned, the designer will be the initial owner of the design and not the person who commissioned it. This is consistent with the changes being made to the UDR by clause 2 (see above).

Clause 6(2) amends section 3 of the RDA by removing the requirement for the applicant to be the proprietor of the design. This brings UK law into line with the way the CDR deals with applications for registered designs.

Clause 7: UK registered designs: Right of prior use

Clause 7 (which inserts a new section 7B into the RDA) introduces a limited defence where a third party acts in good faith in the use of a design that is subsequently registered by another. This will allow third parties to continue using the design according to preparations they have already made, without fear of someone being able to stop them at a later date and jeopardising their investment. It harmonises the RDA with the CDR, which contains an identical measure in Article 22 on a right of prior use.

Section 7B(1) means that the protection for the third party only applies to the use that they have already made of the design. Section 7B(5) means that there is no right, for example, to sell the design to another.

Clause 8: UK registered designs: Accession to the Hague Agreement

This clause (which inserts a new section 15ZA into the RDA) puts in place provisions to allow the UK to implement the Geneva Act of the Hague Agreement. It permits the Hague Agreement to be brought into effect in the UK by order of the Secretary of State and lists the main areas which should be included in such an order.

At present, although UK businesses have access to the Hague system for the registration of designs through the EU having joined, the protection is only available to the EU as a whole. This makes using the system more costly and less advantageous for UK designers, specifically small and medium-sized enterprises, who are not able to use the Hague system to gain protection specifically covering relevant territories rather than the entire EU.

Clause 9: UK registered designs: The Register: changes of ownership and inspection of documents

Clause 9(1) amends section 19 of the RDA by removing subsection (3A), which requires the registrar not to register an interest in a UK registered design unless satisfied that there is a corresponding interest in the UDR. Its removal will enable the register to be updated more easily.

The rest of this clause provides for the provision of information to the public in both hard copy and electronically by amending section 22 of the RDA. There is also provision for the online inspection of relevant documents relating to a registered design.

Clause 10: UK registered designs: Legal proceedings and appeals

An anomaly currently exists because although an innocent infringer has a defence to a claim for a financial remedy (both damages and an account of profits) in the case of infringement of a UK registered design, no such defence is available for infringement of a Community design. This issue was the subject of a specific consultation by the IPO, prior to the more recent consultation in the wake of the Hargreaves review (see Legal update, IPO proposes to remove limitation on liability of innocent infringers of UK registered designs).

Clause 10(1) amends section 24B of the RDA so that a UK registered designer can seek from an innocent infringer an account of profits, but not any wider form of financial damages.

Clause 10(2) introduces new sections 27A and 27B into the RDA, which will provide new routes of appeal to the Appointed Person against decisions made by the registrar relating to designs, as an alternative to the High Court. This will bring designs in line with the system available for challenging trade mark decisions of the registrar.

Clause 11: UK registered designs: Opinions service

Clause 11 introduces, through a new section 28A of the RDA, a power for the Secretary of State to provide for a non-binding opinions service for designs, similar to that which already exists for patents. The opinions service will cover UK registered designs and its scope may be extended to include, for example, other design rights such as the UDR.

Details of the service will be set out in regulations, including the fees and the appeal procedure.

Clause 12: UK registered designs: Use of directions by the registrar

Clause 12 enables the registrar to issue directions relating to the use of forms and to change the IPO's hours of business in relation to design matters, rather than having to rely on secondary legislation made by the Secretary of State. This brings the treatment of these design-related procedural matters in line with those relating to trade marks and patents.

Clause 13: UK registered designs: Offence of unauthorised copying

Clause 13 (which inserts a new section 35ZA into the RDA) makes the deliberate copying of a UK or Community registered design a criminal offence. Deliberate copying in the course of business will need to be proven. The offence will not apply if the defendant can show reasonable grounds for believing the design in question was invalid or that his design did not copy it.

New section 35ZA(7) sets out the penalties the offence carries with it: a fine or a prison sentence of up to ten years or both. The offence is triable either way.

Part 2: Patents

The explanatory notes to the Bill state that the clauses relating to patents have five main purposes, namely to:

Introduce an easier way for patent owners to provide public notice of their patent rights.
Expand the circumstances in which the IPO may issue an opinion in relation to patents.
Provide for the agreement establishing a UPC to be brought into effect in the UK.
Allow the IPO to share information on unpublished patent applications with international partners to help reduce international patent backlogs and speed up patent processing.
Correct minor aspects of the patents legislation to provide clarity and legal certainty to users of the patents system.

Clause 14: Infringement: marking products with an internet link

Section 62 of the Patents Act currently provides that marking an article with the word "patent" or something similar does not put an infringer on notice for the purpose of depriving him of the innocence defence (which affects a proprietor's ability to recover damages), unless the number of the patent is also given.

Clause 14 amends section 62 to provide patent proprietors with an alternative way of providing notice of their patent rights. They will now have the ability to mark their products with either the specific patent number(s) or a relevant internet link which takes the user to a website (or a specific webpage) which details the specific patent number(s) associated with the patented product.

Clause 15: Opinions service

Section 74A of the Patents Act currently specifies the limited grounds on which the IPO is able to give an opinion. Clause 15(1) amends this section to replace the specified grounds with a broader power to set out those grounds in the rules. This will enable the grounds to be amended more easily in response to the demands of the users of the service.

Clause 15(3) amends Schedule 4A to the Patents Act to allow opinions to be requested on the validity or infringement of a Supplementary Protection Certificate.

Clause 15(4) extends the Comptroller-General's powers to revoke a patent on his own initiative. He will be able to do so if an opinion concludes that a patent is invalid because the invention covered by the patent was either known or was obvious. It is envisaged that this additional power will only be exercised in the clearest of cases, where it is indisputable that the patented invention lacks novelty or an inventive step.

These amendments to the Patents Act follow a recent IPO consultation on extending the opinions service (see Legal update, IPO publishes results of consultations on changes to Patents Act and opinions service).

Clause 16: Unified Patent Court

Clause 16, inserts a new section 88A into the Patents Act, which permits the UPC Agreement to be brought into effect in the UK by order of the Secretary of State and lists the main areas which should be included in such an order, including, for example, provisions relating to jurisdiction of the UPC.

Subsections (4) and (5) of this clause allow for alignment of certain provisions of the Patents Act with equivalent provisions in the UPC Agreement and for different provisions to be made for different cases.

Subsection (6) of this clause provides that any secondary legislation made under new section 88A is to be subject to approval by resolution of each House of Parliament.

Clause 17: Sharing information with overseas patent offices

Clause 17 allows the IPO to share information on unpublished patent applications with other national and regional patent offices. It is hoped that this will improve international co-operation and reduce backlogs; WIPO has estimated that the current global patent backlog stands at 4.2 million which represents several years of work for the offices.

Clause 17(2) defines the other patent offices as being those which carry out the same functions relating to patents as carried out by the IPO. However, the clause requires a working arrangement to be in place between the IPO and the other patent office, which should include provision for ensuring confidential treatment of the information.

Clause 18: Minor amendments to the Patents Act

Clause 18 gives effect to the Schedule, which makes various minor amendments to the Patents Act. This includes (in paragraph 6) clarifying that it is necessary to pay outstanding renewal fees on a European patent that has been revoked by the Board of Appeal, but is subsequently restored on appeal.

Part 3: Miscellaneous

Clause 19: Freedom of Information: exemption for research

Clause 19 inserts a new exemption into the FOIA (new section 22A) for continuing programmes of research intended for future publication. Clause 19(1)(b) provides that information will be exempt only if disclosure would, or would be likely to, prejudice a matter listed in that subsection. The matters listed include the programme itself and the interest of any individual participating in it.

The exemption will be a qualified exemption and therefore subject to the public interest balance test.

Clause 20: Reporting Duty

Clause 20 requires the Secretary of State to present to Parliament by the end of September each year a report that sets out how, in his opinion, the activities of the IPO have supported innovation and growth in the UK. (This clause follows the recommendations of the Hargeaves review.)

Clause 21: Recognition of Foreign Copyright Works and Performance

Clause 21 provides for the automatic extension of certain copyright provisions of the CDPA to nationals and works of other countries without the need to include an extensive list of countries and territories in an order. The clause inserts a large number of those countries and territories into the body of the CDPA wherever relevant. In many cases protection will automatically extend to new signatory states without the need for a new order to implement the UK's obligations under the relevant treaty.

Comment

The Intellectual Property Bill does not contain any real surprises, with many of its provisions having been contemplated by the government's proposals in the various design and patent-related consultations in the wake of the Hargreaves review.

Many of the reforms to design law are long overdue and, once enacted, will help harmonise various laws (such as the ownership of commissioned works) and procedures (such as the right of appeal to an Appointed Person). However, only time will tell if the reforms will be enough to meet the needs of business as identified in the consultations.

With regard to the patent provisions, the Bill does not address many of the concerns raised by the Parliamentary European Scrutiny Committee about the UPC including concerns about the effect of effect of bifurcation on forum shopping, the training and quality of UPC judges, and the prohibitive expense of using the unitary patent and UPC (see Legal update, Parliamentary committee comment on unified patent court agreement). It remains to be seen, what if any steps, are taken in, for example, secondary legislation to address these concerns.

Source

Intellectual Property Bill; Explanatory Notes; Government press release, 10 May 2013.

Intellectual Property Bill published | Practical Law