Proposed Modernisation of the UK IP System
The UK government has announced an intellectual property Bill which aims to modernise the IP system in the UK so that it “operates more efficiently, is clearer and is more accessible”.
The Bill was included in the programme of legislation announced in the Queen’s Speech on 8 May, and the Bill has already started its progress through parliament with the formality of a first reading in the House of Lords on 9 May. Substantive debate started with the second reading on 22 May.
Primary legislation in the UK (such as this Bill) is a rare occurrence, and the Bill has therefore attracted keen attention from observers with an interest in IP. Its provisions mainly relate to patent and designs. The Bill is part of the government’s response to the Hargreaves Review of IP and Growth, which was published in May 2011.
In a press release, issued in response to the announcement, the UK IPO commented:
The Bill, published today, proposes changes that would help businesses to better understand what is protected under the law, reduce the need for costly litigation, and provide greater certainty for investors in new designs and technologies.
Furthermore, an impact assessment performed on the Bill estimates that the net benefit to the UK will be £19.61 million over a ten year period.
Some of the more notable provisions of the Bill are discussed below.
In relation to the marking of patent numbers (so as to avoid an innocent infringer being able to escape liability for paying damages), the patent proprietor will now be able to mark a product with an internet link to a website or webpage which specifies the patent number(s) associated with the product.
The existing Opinions service offered by the UK IPO will be made more flexible in that the UK IPO will now have freedom to expand the areas relating to a patent on which an Opinion can be requested.
The Bill also allows Opinions to be requested on the validity or infringement of a Supplementary Protection Certificate (SPC) that has been granted on a patent.
At present, the UK IPO has limited powers to revoke a patent on its own initiative. The Bill will extend those powers so that an Opinion adverse to validity may result in the UK IPO revoking the patent. Apparently, it is envisaged that this new power “will only be exercised in the clearest of cases, where it is indisputable that the patented invention lacks novelty or inventive step”. Where this new power is to be used, the patent proprietor will be able to apply for a review of the adverse Opinion, and to amend the patent to fend off the envisaged revocation.
In relation to the EU’s Agreement on a Unified Patent Court (UPC) which was signed by the UK government in February 2013, and which will enable the long-awaited ‘unitary EU patent’ (UP), the Bill includes provisions enabling the Agreement to be brought into effect in the UK and aspects of national UK patent law to be brought into alignment with the Agreement.
The UK IPO will be able to share search results with overseas patent offices, before a UK patent application is published at the 18-month stage as an ‘A’ publication. However, an agreement will need to be in place between the UK IPO and the overseas patent office governing issues such as confidentiality of the shared information.
In relation to unregistered designs under national UK law, the definition of a design will no longer include ‘any aspect’ of part of an article. This amendment is intended to prevent the protection of trivial features of an article and to reduce the speculative assertion of a broad scope of unregistered design right in infringement actions before the courts.
An unregistered design is not protectable if it is ‘commonplace’ in its design field. The Bill limits commonplace to being assessed in the same ‘qualifying countries’ as are capable of giving rise to unregistered design right (broadly, the EU countries).
Ownership of unregistered design right in designs which are commissioned will no longer reside with the commissioner. Instead, the designer will retain initial ownership. This brings national UK law into harmony with the provisions of EU law governing ownership of unregistered community designs.
Subsistence of unregistered design right is governed by the concept of ‘qualification’. The Bill simplifies and expands the concept so that, broadly speaking, those who are economically active in the EU will qualify for unregistered design right protection.
It will no longer be an infringement of an unregistered design to perform a private act, an experiment or teaching. This brings unregistered designs into harmony with the law governing registered designs at the national and EU level.
Registered designs at the national UK level already benefit from a provision that use with the permission of the owner will excuse any infringement of associated copyright. The Bill extends this benefit to registered community designs.
For a registered design, where the design has been commissioned, ownership will no longer pass to a commissioner, and will remain with the designer. Again, this harmonises UK law with the EU law governing registered community designs.
There will now be a defence of ‘prior use’ in relation to registered designs, and this brings UK law into harmony with EU law which already provides a prior use defence in relation to infringement allegations concerning community registered designs. The Bill includes enabling provisions for the UK to be able to accede to the Hague system of international design registration. This will enable an international design application to designate the UK nationally, rather than, as at present, only via an EU designation giving rise to a registered community design. The government anticipates that this will make the Hague system more attractive to SMEs in the UK. Business Secretary, Vince Cable commented:
Figures show that UK business invests nearly £16 billion in design each year, which represents 1.1% of GDP. The changes in this Bill are to help SMEs and innovative businesses get on and grow.
When assigning a registered design, it will no longer be necessary also to assign any associated unregistered design right before the UK IPO will be prepared to record the assignment on the public Register. This brings national UK law into harmony with EU design law.
In relation to the defence of ‘innocent infringement’ of a registered design, the defence will be narrowed, and a successful proprietor of a registered design will now be able to claim some or all of the profits made by the infringer. This brings national UK law into closer harmony with EU design law.
The Bill allows for a non-binding Opinions service to be set up for registered designs, along the lines of the Opinions service already in place for patents.
The deliberate copying of a national UK registered design or EU registered community design will now also be a criminal offence (although this is already being scrutinised by practitioners).
There are limitations, such as that the registered design must have been registered prior to the copying taking place. The copying must be deliberate copying in the course of business. The accused person must have acted without the consent of the proprietor of the registered design, and must have known or had reason to believe that the registered design had been copied. A defence will be for the accused person to show that they reproduced the registered design unintentionally. They will also not be liable if they can show reasonable grounds for believing that the registered design was invalid or that their product did not reproduce the registered design. The penalties for proven deliberate copying include a fine and/or a prison sentence of up to ten years. The various Trading Standards Authorities around the UK will be able to assist with policing deliberate copying of registered designs, as they already do for copyright and trade marks. Forfeiture powers are included, and in certain circumstances a court will be able to order the removal of infringing products, or items which have been used to make them, from the premises of an actual or suspected criminal infringer.
Patents, designs and trade marks
The Bill imposes a requirement for an annual report to be published by the Secretary of State for Business, Innovation and Skills as to whether the activities of the UK IPO (in relation to patents, designs and trade marks) have supported innovation and economic growth in the UK. This implements one of the recommendations of the Hargreaves Review.
When the Bill receives Royal Assent and becomes law in due course, it will be known as the Intellectual Property Act 2013. Our full analysis will follow as and when the bill gains Royal Assent.