More on the Designs ACIP bill

Following Friday’s post, the text of the Designs Amendment (Advisory Council on Intellectual Property Response) Bill 2020 and the Explanatory Memorandum are now available.

So:

  • Schedule 1: the 12 month ‘grace period’ before the priority date for prior use/publication by or with the consent of the design. Publications by the Registrar of Designs (i.e. on the Register of Designs) or by an equivalent overseas person or body will not be able to claim the benefit of this ‘grace period’. On the other hand, if some third party starts using, or publishes, the design or a substantially similar design after the design owner, there will be presumption that the third party derived its design from the design owner. In other words, if the registered owner is relying on the ‘grace period’, the onus will be on the person asserting invalidity by prior use or publication in the 12 month ‘grace period’ to prove the prior art relied on was not derived from the registered owner or the owner’s predecessor in title.
  • Schedule 2: will introduce new s 71A to provide an exemption from infringement for persons who start using a design during the 12 month ‘grace period’ introduced by Schedule 1. The exemption will continue to operate after the design is registered. The exemption extends not only to those who actually engage in an otherwise infringing act but also to a person who: had taken definite steps (contractually or otherwise and whether or not in Australia) to do [the otherwise infringing] act…. According to the EM, ‘definite steps’ will not be satisfied by mere ‘initial steps’. The plans must be finalised and the process of acquiring or making all components must have started. Under 71A(4), the person entitled to the exemption may “dispose” of their entitlement so that the exemption passes to the disposee – presumably, it follows from the disposal of the entitlement that the disposer cannot continue to claim the benefit.
  • Schedule 3: removes the publication option – the nice flowchart of the options for requesting registration and the formalities check is now on p. 23 of the EM.
  • Schedule 4: will amend s 75 to provide a further ‘innocent infringer’ defence for acts done prior to registration of the design (when the design representations are first published). The amendment will give the Court a discretion not to award damages where the defendant satisfies the Court that, when the infringing acts were done, the defendant was not aware, and could not reasonably have been expected to be aware, that the design application had been filed.
  • Schedule 5: will give an exclusive licensee standing to sue for infringements. By proposed s 5A, an exclusive licensee will be defined to be as a person to whom the registered owner has granted the exclusive rights in the design.[1] An exclusive licensee may be empowered to sub-license. A person will not be disqualified as an exclusive licensee, however, if their exclusive rights do not include the right to sub-license.
  • Schedule 6: will empower the Registrar to specify the formal requirements for design applications by publishing notices – these formalities will no longer by specified in the regulations and such notices will not be “legislative instruments”
  • Schedule 7
    1. Repeals “the standard of the informed user” and replaces it with the “standard of the familiar person” adopted in Multisteps.
    2. Will give the Court a discretion whether or not to revoke a registered design on grounds of lack of entitlement unless satisfied in all the circumstances it is just and equitable to do so – this will bring the revocation power on this basis in line with s 138 of the Patents Act.
    3. Will permit revocation on grounds of fraud, false suggestion etc. perpetrated at the examination stage.
    4. Makes provision for ‘revived’ designs where the renewal fees are not paid until after the expiry of the initial 5 year term:
      1. If the renewal fees are paid within 6 months after expiry of the initial term (the so-called ‘renewal grace period’), the registration will be treated as remaining in force and never to have ceased;
      2. But if the renewal fees are paid after 6 months (on the basis of an application for an extension of time), the registration will be treated as having ceased on the expiry of the 5 year term.
      The significance of these differences is that a third party should not start using the design in the 6 month ‘renewal grace period’. The protections under s 140 will be available only to persons who start using after the expiry of the ‘renewal grace period’.

  1. Strictly speaking, the exclusive rights conferred by s 10(1)(a) to (e) only. Can anyone think of a rational reason why s 10 confers on the registered owner the exclusive licence to authorise people to do the acts in s 10(1)(a) to (e), but authorising an infringement is not an infringing act under s 71?  ?

Designs Amendment (Advisory Council On Intellectual Property Response) Bill 2020

The Designs Amendment (Advisory Council On Intellectual Property Response) Bill 2020 was introduced into Parliament on Wednesday, 2 December.

At the time of writing the links to the text of the Bill and the Explanatory Memorandum are inactive.[1] You can read, however, the Minister’s Second Reading speech.

Also there has already been consultation on an exposure draft and IP Australia’s response to that public consultation. So we know broadly what is in the Bill, although there were a number of details to be worked out following IP Australia’s response.

According to the Minister’s Second Reading speech:

  • the Bill introduces the 12 month ‘grace period’ for design owners who make their designs publicly available before they file their design applications – this was Sch. 1 in the exposure draft. As the Minister pointed out, this will align Australia’s registered design law with “many of our major trading partners” (including the EU and the USA);
  • the Bill will give exclusive licensees standing to bring infringement proceedings – this was Schedule 4 in the exposure draft. In the exposure draft at least and as with patents, the exclusive licensee had to be the exclusive licensee of the whole right;
  • the Bill will remove the “rarely used” publication option so that every application will be an application for registration – one consequence of this reform as implemented in the exposure draft was that a design application will automatically proceed to formalities examination and registration 6 months after filing if registration was not requested earlier;[2]
  • there will also be a prior user defence for a person who commences using a design during the ‘grace period’ before the design application is filed – this was Schedule 2 in the exposure draft;
  • in addition, in cases where registration is delayed (up to 6 months from the filing date), there will be some sort of “innocent infringer” defence for a person who commences using the design in the period between filing and registration (as it is only on registration that the design representations are published);
  • there are also “smaller technical corrections and improvements” including revocation of a design for fraud, false representation etc. during certification.

Although the Minister’s Second Reading speech does not mention it, the exposure draft also included in Schedule 6 the amendment of s 19(4) to abandon the “informed user” test and adopt the “familiar person” test.

The Minister also indicated the Bill “is just the first stage of the Government’s ongoing program of designs reform, with more improvements to come after further consultation.” According to IP Australia’s consultation page (scroll down), the following matters are still on IP Australia’s Policy Register:

  • Protection of partial designs – Policy ID 42 This issue apparently has “high priority”;
  • Protection of virtual, non-physical and active state designs – Policy ID 43 This issue apparently has “high priority”;
  • Clarify ambiguity in section 19 of the Designs Act – Policy ID 35 A third issue with “high priority”;

(This is in addition to the change from “informed user” to “familiar person”.)

  • Clarification of ‘registered’ and ‘certified’ designs – Policy ID 37 Also “high priority”;
  • Some of the amendments proposed in Recommendation 18 of the ACIP Designs Review (18b, 18d, 18e and 18g are not progressing at this time) – Policy ID 45

For the research reports arising from the longer term Designs Review Project, see here.

Debate on the Bill itself has been adjourned to the first sitting day of the next period of sittings – presumably, in 2021.

Lid dip: Genevieve Corish at LexisNexis


  1. When they do appear (presumably in the next few days), they should be accessible from here and/or here.  ?
  2. This was Sch. 3 in the exposure draft. The exposure draft Explanatory Memorandum at p. 22 had a nice flowchart illustrating the application and registration process under the proposed regime.  ?

Registered designs consultation

IP Australia has released exposure drafts of the proposed:

As the naming of the draft legislation indicates, these amendments are intended to implement the Government’s acceptance of the simpler, or less controversial, recommendations made by ACIP.

IP Australia’s landing page for the consultations states that proposals included in the draft include:

  • “Introducing a 12 month grace period to help protect designers from losing their rights through inadvertent disclosures made prior to filing.
  • “Expanding the existing limited prior use defence to protect third parties who started preparations to make a design before someone else tried to register it.
  • “Simplifying the design registration process by removing the publication option and making registration automatic six months after filing
  • “Aligning with the other IP Rights by giving exclusive licensees legal standing to sue for infringement
  • “Making several technical improvements to the Designs Act”.

You can find some background, including links to the various consultation papers, ACIP’s Review of the Designs System on the landing page.

If you are planning to submit comments, they should be in by 28 August 2020.

The landing page says that a number of proposals which are not being progressed in the draft legislation at this stage are still under consideration and invites your comments via IP Australia’s Policy Register. Proposals identified are:

  • “Protection of partial designs – Policy ID 42
  • “Protection of virtual, non-physical and active state designs – Policy ID 43
  • “Clarify ambiguity in section 19 of the Designs Act – Policy ID 35 
    Please note the part of this proposal relating to the standard of the informed user will be progressing and is included in the draft legislation
  • “Clarification of ‘registered’ and ‘certified’ designs – Policy ID 37
  • “Some of the amendments proposed in Recommendation 18 of the ACIP Designs Review (18b, 18d, 18e and 18g are not progressing at this time) – Policy ID 45“.

Trumpet blowing

It’s that time of the year again when IPSANZ’ annual copyright and designs update comes up.

This year it takes place on 30 July, online – for those of you on the eastern seaboard starting at 1:00pm.

Registration is free for IPSANZ members, A$50 for non-members in Australia and A$46.50 for NZ and international non-members..

For registration and other details, including times for NZ and the other states and territories, go here.

Ordinarily, I would say “hope to see you there!”, but ….

Still, I do hope you can join in.

Productivity Commission Response No 2 – No 2

The Intellectual Property Laws Amendment (Productivity Commission Response Part 2 and Other Measures) Act 2020 received Royal Assent on 26 February 2020.

The Act as actually passed (with amendments) is available here (to get the text from Austlii when I went there, I had to download the RTF or plain text format). There is also now a Revised Explanatory Memorandum.

As assented to, section 2 now prescribes that the abolition of the innovation patent regime will occur 18 months after Royal Assent — 26 August 2021.

(Remember, this is achieved by specifying an additional ground for “the formalities check” in new s 52(3) – an application for an innovation patent may pass “the formalities check” only if the date of the patent would be before [26 August 2021]. There is presumably a good reason why it doesn’t just say The Commissioner must reject the application for an innovation patent if the date of the patent would be on or after [26 August 2021].)

The Revised Explanatory Memorandum explains that 18 months has been chosen to ensure that persons who have filed a provisional application or a basic application under the PCT are not prejudiced. Such a person has up to 12 months from the filing date to file a complete application in Australia and an additional 6 months has been allowed to allow them enough time to make a decision.

As you will recall both ACIP and the Productivity Commission recommended abolition of the innovation patent. The Revised Explanatory Memorandum explains that the Government has accepted those recommendations because (footnotes omitted):

The policy intention of the IPS was to encourage SMEs to innovate and benefit from their scientific progress. In practice however, the innovation patent system has been found to have limited use by SMEs as 74 per cent of SMEs and private inventors filed once and never again; 83 per cent never received an enforceable right; and 78 per cent let their innovation patent expire early rather than pay the minor cost of the renewal fee. The Productivity Commission found that the majority of SMEs who use the innovation patent system do not obtain value from it, and that the system imposes significant costs on third parties and the broader Australian community. Given this, the innovation patent system has shown to be unlikely to provide net benefits to the Australian community or to the SMEs who are the intended beneficiaries of the system.

Section 4 in the Act as passed also requires the Minister to establish a review of the accessibility of patents for small and medium enterprises within 3 months (i.e. by 26 May 2020). Matters the review should consider include:

(a) the cost of applications for patents; and

(b) processing times of patents; and

(c) advice provided by the Australian Government with respect to the patent application process; and

(d) awareness of the patent application process.

The written report from the review must be submitted to the Minister within 12 months of commencement and the Minister must table it in both Houses of Parliament within 15 sitting days of receiving the report.

In addition to these matters, the Act also:

  • introduces an objects clause into the Patents Act 1990 – Sch 1 Part 1;

The object of this Act is to provide a patent system in Australia that promotes economic wellbeing through technological innovation and the transfer and dissemination of technology. In doing so, the patent system balances over time the interests of producers, owners and users of technology and the public.

  • revises the Crown use provisions in both the Patents Act and the Designs Act – Sch 2 & 3;
  • amends the compulsory licence provisions for patents to be based on a “public interest” test rather than a failure to meet the reasonable requirements of the public in Australia – Sch 4;
  • provides for electronic seals in the Patents and Trade Marks Offices – Sch 5;
  • permits objection to ‘omnibus claims’ to be raised at opposition, re-examination and revocation stages as well as examination – Sch 6;
  • permits the Commissioner of Patents to redact information (i.e. parts of documents) as well as documents where confidentiality requires it – Sch 7; and
  • amends the circumstances a translation of a patent application originally in a foreign language will require a certificate of verification – Sch 8.

All the amendments commenced on 27 February 2020 except for the abolition of innovation patents and Sch 8. The timing of the abolition of innovation patents has been discussed above. Sch. 9 commences on 26 August 2020.

Productivity Commission Response No 2

Parliament has now passed the wonderfully named Intellectual Property Law Amendment (Productivity Commission Response Part 2 and Other Measures) Bill 2019. Text here[1] and EM here.

When enacted, the “Act” will amongst other things:

(a) insert an objects clause, new section 2A, into the Patents Act:

The object of this Act is to provide a patent system in Australia that promotes economic wellbeing through technological innovation and the transfer and dissemination of technology. In doing so, the patent system balances over time the interests of producers, owners and users of technology and the public.

That clears things up nicely doesn’t it?

(b) suppress the granting of more “innovation” patents;

(c) harmonise the regimes for Crown use of patents and registered designs;

(d) introduces a revised regime for compulsory licensing of patents.

The suffocation of innovation patents will be achieved by introducing new sub-section 52(3) into the Patents Act.

Sub-section 52(3) will make it a requirement of the formalities check that the date of the patent (if granted) must be a date before the date the amendment came into force.

According to the form of the “Act” on Parliament’s website sub-section 52(3) will come into force 12 months after the “Act” receives Royal Assent.[2]

Once the sub-section comes into force, therefore, it will be possible to seek further innovation patents only where they are based on filings with a date before the commencement date so, for example, a divisional application.


  1. The bill does not become an Act until it receives the Royal Assent.  ?
  2. There had been reports that the phase out period would be extended to 18 months, but that does not appear to be reflected in the document on Parliament’s website. These reports also indicated that there was to be a review of the impact of “abolition” on Australian small and medium enterprises.  ?

Registered Designs consultation

IP Australia has started consultations on policy issues to implement the accepted recommendations arising from ACIP’s 2015 Report. There is also “a more holistic review of the designs ecosystem, as part of the Designs Review Project”, but these proposals don’t relate to that.

In an interesting development, IP Australia has prepared a quick video overview.

There are three “key” topics as part of the current review:

  1. Examining the scope of design protection
  2. Early flexibility for designers
  3. Simplifying and clarifying the designs system

IP Australia’s website summarises the topics addressed by Examining the scope of design protection as including:

  • whether it should be possible to seek protection for partial designs;
  • whether screen displays, screen icons and GUIs should be protectible as designs; and
  • how s 19 works.

Early flexibility for designers addresses matters such as:

  • introducing a grace period;
  • delaying publication of design applications so that they can be synchronised with launch dates;
  • and getting rid of the pointless “publication” option.

Simplifying and clarifying the designs system trots out yet again the “technical” proposals to simplify and clarify the system. While previously these proposals were going to be the subject of a bill, now:

IP Australia seeks any views on these proposals, including their relative priorities, to help understand how and when they should be progressed.

If you want to contribute a submission, you should do so by 20 December 2019

Repeal of s 51(3)

The bill repealing (amongst other things) s 51(3) of the Competition and Consumer Act did get passed and has received royal assent.

The repeal takes effect on 13 September 2019.

So, if you thought you were relying on s 51(3)’s protection, you have a bit less than 6 months to get your house in order.

Your licences and assignments of IP rights probably will not get you into trouble for the most part unless you have market power. But that is not exactly a hard and fast rule so you should discuss your arrangements with your lawyers ASAP.

As discussed in this post, one area of potentially significant concern is where the IP holder has its own retail outlets and also licenses other retail outlets – e.g. not uncommon for franchisors who have their own outlets and franchisees. There is a concern that may give rise to criminal cartel conduct.

If you want to know about the prohibitions on cartel conduct, Ian Wylie has published a paper “Cartel conduct or Permissible Joint Venture?

On Tuesday, the ACCC also announced it hopes to publish draft guidelines by “mid-2019” and finalise them before 13 September. Amongst other things, these proposed guidelines will outline:

how the ACCC proposes to investigate and enforce Part IV in relation to conduct involving intellectual property rights. They will also provide hypothetical examples to illustrate conduct that the ACCC considers is likely or unlikely to contravene Part IV.

Cartel conduct and IP licences and assignments

Will your assignments and licences of intellectual property, such as in a typical franchise agreement, expose your client to liability for cartel conduct or will you be ready to apply for an authorisation?

One of the bills pending before Parliament contains the long pursued (by the ACCC) repeal of s 51(3) of the Competition and Consumer Act 2010.

Section 51(3) exempts from most of the prohibitions in Pt IV of the Competition and Consumer Act terms and conditions in assignments and licences of intellectual property which most of us take for granted.

The rationale for repeal is that most transactions involving IP do not have anti-competitive effects or purposes and, if they do, they should not be exempt from the competition laws.

Rodney De Boos, a consultant at DCC with many years’ experience in licensing and commercialisation of IP, however, points out that this explanation was developed before the provisions banning cartel conduct were introduced into the Act. And, he contends, typical arrangements in IP agreements which allocate, for example, territories or customers will constitute cartel conduct and so need authorisation if the parties are not to be in breach of the cartel provisions.

As Rodney explains, a cartel provision are certain types of specified provisions between competitors.

Now, it may well be that an assignor and assignee, or a licensor and licensee, will not be competitors. There are many types of arrangements, however, where the Competition and Consumer Act will deem them to be competitors. An obvious example is the case of a franchisor who has retail outlets (either itself or through a related body corporate) as well as retail franchisees. Other arrangements involving IP could also be similarly problematical.

You can read Rodney’s concerns in more detail here.

The bill repealing s 51(3) has already passed the House of Representatives and is due to be debated by the Senate in the sittings coming up.

Hague consultations – outcome

IP Australia has published a report on the results of its consultations on the economic consequences of Australia joining The Hague Agreement for the international registration of industrial designs.

In short, there’s a bit of minor tweaking, but the outcome is pretty much the same. The revised best estimate:

  • net benefit to Australian designers is $3 million (up from $1.7 million)
  • net cost to Australian consumers is $39.7 million (down from $58 million)
  • net cost to Australian IP professionals is $2.5 million (unchanged)
  • net cost to the Australian Government is $2.8 million (unchanged).

Perhaps one of the most interesting aspects of the report is an analysis of all infringement court cases involving patents, trade marks or registered designs since 2008:

Rate of infringement cases by registered IPR

There have been far less design infringement cases but, having regard to the number of registered designs, litigation is in approximately the same proportion as trade mark infringement cases,[1] but approximately only one third the rate of patent litigation.

Another surprising aspect: the New Zealand Intellectual Property Association also made submissions – which appear to have been rather influential – which strongly opposed Australia joining the Hague system.

Finally, the report is at pains to say that the costs benefit analysis of joining Hague is only one factor being considered. Anyone want to put money on Australia joining (before we sign up to anothere one-way trade agreement with, this time, the EU)?


  1. The report gets a bit over-excited by the high proportion of certified designs which get litigated – well, duh!  ?