First Standing Committee on
Monday 29 October 2001
[Mrs. Marion Roe in the Chair]
Draft Registered Designs Regulations 2001
The Parliamentary Under-Secretary of State for Trade and Industry (Miss Melanie Johnson): I beg to move,
That the Committee has considered the draft Registered Designs Regulations 2001.
The directive has a long history. In June 1991, a Green Paper led to the first proposal for a directive in 1993, which was adopted in 1998. Throughout that time, and afterwards when preparing the regulations, the Department of Trade and Industry consulted designers, manufacturers of consumer products and others who would be affected by them. The appearance of a product can make the difference between the success and failure of even the most functional of items. Good design is becoming ever more important when marketing a new range of products. Since the 18th century, the United Kingdom has recognised the importance of protecting the investment of designers by protecting their designs from being copied. The need to protect designs is recognised by several international treaties, most notably the Paris convention of 1883 and the agreement on trade-related aspects of intellectual property rights. However, the actual extent and effect of the protection of designs is probably the least harmonised of intellectual property laws throughout the world.
The harmonisation of laws helps businesses plan their activities with more certainty. Designers cannot understand why their design might be protected in some countries, but not in others. Similarly, their competitors may be faced with determining whether their rights that have been registered in different countries are all valid. The individual assessment of the legal position that applies in different parts of Europe's internal market is unnecessarily time consuming and expensive, particularly for small businesses that do not have legal departments. It can put off designers from applying for protection or put off a manufacturer from launching a product in case it cannot be marketed throughout the whole Community.
The Commission and member states have sought to find the most appropriate protection for the benefit of Europe, recognising the investment made by designers and the need for fair competition for the benefit of consumers. Much of what the directorate requires is similar to the protection already provided by the Registered Designs Act 1949. However, there are a few significant differences that I shall explain to the Committee. Protection will be for the design itself rather than a particular article bearing the design. That makes little difference when the design is the product itself, but makes protection much simpler for designers of ornamentationfor example, a floral patternwhich can be applied to many different products. Protection is extended to handicrafts and one-off items.
Until now, we have protected designs that are applied only to articles by an industrial process. The protection offered by registration is improved to give the owner the sole right to use any design that gives the same overall impression as the design that he has registered. Until now, competitors have sometimes been able to side step the protection by making relatively minor changes to the design.The quid pro quo for that improvement is that the test to gain protection becomes conversely stiffer. Protection is available only if the design is both new and gives a different overall impression from earlier designs. Previously, a design could be registered as long as it differed in a material detail. In the past, designs have had to be absolutely new to be registered. Almost any public disclosure before filing an application at the Patent Office meant that a registration would be invalid. The directive introduces a 12-month grace period, when a designer can show and use his design in public to test the market and gain backing without prejudice to his right to apply for protection.
I must mention the significant error that the directive does not harmonise, which is one of the major reasons why it took so long to negotiate. Member states and the European Parliament could not agree on how to treat products that can be used as spare parts for complex products and had to match the original part to perform a satisfactory repair, such as car body panels and light clusters. The United Kingdom excluded such parts from registration in 1988 after it was found that some original manufacturers were using intellectual property rights to the detriment of consumers to maintain a monopoly on spare parts. Other member states allow full protection.
Finally, it was agreed that it was important swiftly to bring into force the parts of the directive that could be agreed upon. The Commission will continue to review that area; it will report in 2004, and it will make a further proposal in 2005. Meanwhile, member states will keep their existing laws with regard to the use of such parts for repair purposes. Currently, the law in the United Kingdom excludes such designs from registration, which means that they lack protection from being used by others in original products, as well as from being used for repair purposes. The directive allows the Government the option of retaining that position, but consultation with independent spare-parts manufacturers concluded that that would be inappropriate. The regulations allow the registration of such designs, but the rights cannot be enforced against those producing, selling or using the products as spare parts. That is consistent with the interim solution that has been agreed for the forthcoming equivalent Community-wide right, and the regulation for that should be adopted soon.
The provisions of the draft regulations are compatible with human rights legislation. I hope that my explanation of the need for the regulations, and of their effect, has been useful to hon. Members, and I commend them to the Committee.
Mr. Nigel Waterson (Eastbourne): The Committee is grateful to the Minister for providing that explanation of the reasons for the introduction of the regulations. Although the regulations appear to be complex, a high proportion of them deal with technical and consequential amendments.
As the Minister said, the matter under discussion has had a long history. However, although she referred to provisions of the 18th century, its true origin is the Registered Designs Act 1949, which has, for a long while, required to be brought directly into line with the current regulationsand, in particular, with the EU directive.
Will the Minister confirm that the deadline for implementing the EU directive expired yesterday, and that this is, therefore, an 11th-hour debate? Although I acknowledge that the consultation has taken a long while, the deadline that was set by the European Union has not been met. The Patent Office has blamed that failure on the pressures of parliamentary time, but that cannot be right; the debate could have taken place sooner. I suspect that the true reason for the debate taking place at the 11th hour is that the regulations are complex, as I have acknowledged, and that drafting them has, therefore, been a slow process. I am not trying to pin the blame on anyone, but the record should be set straight, and there should be no attempt to employ spin to explain the matter.
My party will support the regulations; I do not intend to divide the Committee. The regulations are long overdue, as the Minister suggested. They offer new opportunities to innovators in the United Kingdom to protect their products. The UK is a powerhouse with regard to intellectual propertyand especially to the invention of new designs for products. The regulations are also important because they will produce a level playing field across Europeto employ a dreadful phrase. They will also contribute to the completion of the single market. They are, therefore, sensible and necessary.
Traditionally, designs have been registrable in limited areas, such as surface decorationwhich includes, for instance, patterns on clothand aesthetic appeal has been a key test. The directive extends what is registrable with regard to industrial products to include any aspect of them that has ``eye appeal'', such as their shape and configuration. Therefore, the design or shape of a new car will be covered by the regulations, although it will not be covered by patent regulations, which involve the concept of invention.
That is important for a great deal of British industry that is involved not necessarily in inventing new thingsalthough a great deal of that is going on all the timebut in improving, refining or modernising designs, and it will be widely welcomed by British industry that such changes and designs can now be registered under the new regulations. I am sure that the Minister will correct me if I am wrong, but ostensibly the tests for registering designs are not dissimilar to those for patentability. The design must be new: it is subject to tests for novelty and individual character. As I said, English law makes a sharp distinction between designs and patents.
The explanatory note was good enough to state that the regulatory impact assessment had been placed in the Library. Section V of that report states:
``In most respects, this is a fairly small amendment to an existing system . . . there is not expected to be any change in the cost of making a typical application.''
Will the Minister confirm that that is still the intention?
The view has been expressed that a one-off cost for legal advice will be involved for people familiarising themselves with the scope of the new regulations, but no large increase in litigation is envisaged as a result. Also important is the grace period that allows businesses up to 12 months after disclosure of a design before having to apply for protection. The Minister touched on that in her introductory remarks. I hope that it will reduce the cost. The overall conclusion of the regulatory impact assessment is that relatively little extra cost will be incurred as a result.
Until recently, I was relatively unfamiliar with the concept of exhaustion of rights, which involves matters such as parallel tradinggoods that are subject to regulations that cover intellectual property in other jurisdictions. How differently would, for example, the Tesco jeans case be considered under the new regulations? The Minister will recall the case, which involved Levi's jeans being imported from, I believe, America, by Tesco, and being sold at a low price in Tesco outlets in this country. Levi brought a case that is still to be finally resolved in the European Court of Justice to try to stop its branded product being sold at a low price in British supermarkets. How will the exhaustion of rights be dealt with in future? Will it be considered in the same way as trade marks? How would a specific case such as the case involving Tesco and Levi be affected under the new regulations? Would it be affected?
I thank the Minister for her introduction and look forward to her answers to my questions. I also wish her well in her forthcoming hospitalisation.