Australia’s laws protecting registered designs are inching closer towards radical change. In essence, a registered design protects the overall appearance of a product, rather than its function. Australia’s existing designs laws are generally regarded as ineffective in that it is too easy to register a design but too difficult to establish that it has been infringed. It is largely this concern which the impending changes are designed to remedy.
The current proposals to amend Australia’s designs laws have a long history. A detailed report by the Australian Law Reform Commission was released in August 1995. In response to that report, in May 2001 the Commonwealth Government released an Exposure Draft of a Designs Bill which would repeal and replace the existing Designs Act 1906 (Cth). Public comment was sought, and the Government has now tabled the Designs Bill 2002 in parliament. The main thrust of the reforms set out in the Designs Bill 2002 has not changed since the Exposure Draft.1 However, one interesting development is a proposed defence to infringement for the making of certain spare parts.
Some time ago, the Government decided in principle to provide a special exemption for the manufacture of spare parts in order to encourage competition. Concerns had been expressed to an inquiry into the overlap between intellectual property and competition laws2 that design protection for spare parts (e.g. car parts or printer cartridges) could enable the owners of such registered designs to leverage their market power in the spare parts market to dominate the market for the complete product (e.g. cars or printers). Although the Government accepted that it was appropriate to provide special treatment for spare parts, it had not decided upon the means by which such an exemption would be enacted. A number of options were explored (including the removal of spare parts from design protection), but the option ultimately adopted in the Designs Bill 2002 is a right of repair defence to design infringement.
If the Designs Bill 2002 is enacted in its present form, a defendant will not infringe a registered design if the allegedly infringing product (which would otherwise infringe the design in suit) is:
a component part of a complex product (where a "complex product" is a product comprising at least two replaceable component parts permitting disassembly and re-assembly); and
made, sold or otherwise commercially dealt with "for the purpose of the repair of the complex product so as to restore its overall appearance in whole or part" (for the sake of convenience, this is referred to below as a "genuine repair").
The second condition would be satisfied if the overall appearance of the complex product immediately after the alleged repair were not materially different from its original overall appearance, and provided that any differences which do exist after the alleged repair were solely attributable to the fact that only part of the complex product had been repaired.
The owner of the registered design would bear the onus of proving that the defendant knew, or ought reasonably to have known, that the use was not for the purpose of a genuine repair. This is a heavy burden, and one that would usually be expected to fall upon the defendant. This is because the defendant would be in a better position to establish that it did not have the requisite knowledge, than the owner of the registered design would be in to establish the converse. The reason given in the Explanatory Memorandum for the onus not being placed on the defendant is that to do so would act as a disincentive for new participants to enter the market for the supply of the relevant spare parts.
It remains to be seen whether the Designs Bill 2002 will be passed through parliament in substantially its current form. If this does occur, then owners of registered designs will find it easier to establish that their designs have been infringed, except in cases where the alleged infringer is performing a genuine repair. The right of repair defence to infringement may be considered as a trade-off for strengthening the infringement tests. Despite the proposed defence, the enactment of the Designs Bill 2002 will be a welcome development for owners of registered designs, and should at last reinvigorate Australia’s registered designs system.
For more information on these aspects of the reforms in the context of the Exposure Draft, please refer to our earlier article on page 8 of the November 2001 issue of ‘Technology and Intellectual Property Issues’. This article can be accessed online at http://www.claytonutz.com/downloads/Tech_0111.pdf.
2 The inquiry was conducted by the Intellectual Property and Competition Review Committee, and chaired by economist Henry Ergas. The Committee reported to the Government in September 2000.
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