Select Committee on Regulatory Reform Fifth Report


Explanatory Report


Introduction

1. The proposal for the draft Regulatory Reform (Registered Designs) Order 2006 was laid before the House by the Cabinet Office on 13 March 2006 on behalf of the Minister for Science and Innovation in the Department of Trade and Industry, Lord Sainsbury of Turville.[2]

2. The purpose of the proposed Order is to amend the Registered Designs Act 1949 ("the 1949 Act") which governs the registration of designs in the UK in order to remove burdens associated with four specific aspects of the legislation governing procedures for the registration of designs. The Order

a)  removes the power of the Registrar to refuse to register designs on grounds of lack of novelty or individuality and to conduct searches for establishing novelty;

b)  removes an effective block on multiple applications;

c)  requires public inspections of all designs, and

d)  facilitates lapsed registrations.

3. The 1949 Act was amended by the Registered Designs Regulations 2001 (SI/2001/3949) to comply with the EC Directive on the legal protection of designs (Directive 98/71/EC). Although the substantive law of registered designs is now governed by that EC Directive, procedural matters, which are the subject of the Order, are outside its scope and are governed by the 1949 Act.

THE REGISTRATION OF DESIGNS

4. Designs can be as diverse as works of art and graphic designs and, at the other extreme, the shape and appearance of functional objects such as umbrellas and machines. A design is defined by section 1(2) of the 1949 Act as:

5. A registered design provides the proprietor with an exclusive right to use the design and any other design which does not create a different overall impression. It gives the right to take legal action against others who might be infringing the design and to claim damages. It is a property right which can be bought or sold like any other property. However, the validity of a registered design can be challenged at any time. Although registration of designs is typically used by larger enterprises, the Patent Office points out that registration has also become increasingly popular with small and medium sized enterprises, many of which are without legal representation. UK businesses register and protect fewer designs than some of their competitors in other countries, including France and Germany.

6. Designs can be registered under national schemes, such as in the UK at the Patent Office, or under the EU registration scheme at the Community Design Office in Alicante.[3] The EU scheme provides similar rights to a national registered design, except that a Community design is a unitary right covering the whole of the European Community. According to the Patent Office the cost of registration for a single Community design is €350 (about £240) against just £60 for a UK registration. The higher cost for EU registration may discourage some small businesses from registering their new designs throughout the EU. But, as the Patent Offices points out, a national registration would make it easier for these companies to enforce their rights, at least in the UK, and would also create grounds for invalidation if the same design is later registered by a third party as a Community design.

7. Since 2003, when the Community registration system was introduced, the Patent Office has recorded a 60% fall in the number of UK national applications for registration. However, as the Patent Office makes clear, it is not its aim to win business at the expense of the EU Community system since there would be no benefit in encouraging domestic registration as an alternative to EU registration. Both systems operate in tandem. For example, the Patent Office provides information and advice to businesses about the EU Community system of registration, which is expected to feature just as prominently in the new guidance to the public as now. [4] The Patent Office told us that its aim is to offer an easy and affordable registration option to those businesses that currently do not register their designs and/or whose business is such that they are unlikely to need to assert their design rights outside the UK.

CASE FOR MODERNISING THE UK SYSTEM

8. Compared with the UK national system, the Community system is perceived as providing a more modern and liberal approach to registration procedures. The need to modernise the procedures for governing the UK national system, specifically the 1949 Act, has become increasingly obvious since the Community Design Regulations came into force in 2002.

9. The Patent Office states that the proposed amendments to the 1949 Act are required to provide similar flexibility in the domestic legislation as that provided by the EU registration system. It suggests that making UK registration easier would encourage innovation and enhance the competitiveness of UK businesses. The Patent Office identifies a number of benefits of the new system to UK businesses: it would remove any misunderstanding in the market place about whether new designs have been assessed for novelty prior to registration; it would be quicker, easier and cheaper; and should reduce the incidence of inadvertent infringement by encouraging designs to be registered. In response to our question, the Patent Office stated:

10. Some of the suggested benefits of the revised registration system also require amendments to the Registered Designs Rules which are made under section 36 of the 1949 Act and govern the various administrative and procedural arrangements for the registration of designs.[6] The process for doing so is separate from the proposed Order. The Patent Office has not yet published its summary of the Rules consultation and proposes to amend the Rules at a later date.


2   The Minister will be responsible for deciding how any Parliamentary representations should be reflected by changes to the proposal, and for satisfying himself as to other matters in section 1(1) of the Regulatory Reform Act 2001 ("the 2001 Act"). The explanatory statement provided by the Secretary of State for Trade and Industry states that the consultation was conducted by the Patent Office on behalf of the Minister. Back

3   Designs can be registered as a Community design under Council Regulation on Community Designs (EC) No.6 of 2002 (the Community Design Regulations). Back

4   For example, the Patent Office provides a downloadable booklets entitled "How to apply to register a UK design" and "How to apply for a registered Community design" as well as other information on registered and unregistered designs in both the UK and the Community. Back

5   Appendix B, Question 7 Back

6   These changes were subject to consultation in tandem with the RRO proposal. Back


 
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Prepared 26 May 2006