28 May 2013

The Intellectual Property Bill


Viscount Younger of Leckie, Parliamentary Under Secretary of State for Intellectual Property


















In Digital Opportunity, A Review of Intellectual Property and Growth Professor Ian Hargreaves made 10 recommendations for IP policy which I discussed at length in "IP Policy: Does Hargreaves say Anything New?" 24 June 2011. Some of those recommendations required primary legislation. Others did not.  As I said in my article, Hargreaves was not the first review of IP policy in recent years and most of the previous ones had been left to gather dust.   I suspected the same would happen to Hargreaves.

Implementation of Hargreaves

To my surprise and delight, Hargreaves's recommendations were accepted broadly by HM Government ("HMG") (see "The Government Response to the Hargreaves Review of Intellectual Property and Growth" Aug 2011).  Not only that but HMG actually started to consult on the recommendations and even to implement some of those that do not require primary legislation.  The progress of such implementation is being monitored by the Intellectual Property Office ("IPO") on the "Implementing the Hargreaves Review" page of its website. The IPO has published a summary summarized of progress to date in its downloadable guide "What does Hargreaves mean for SMEs?" 

Intellectual Property Bill

On the 10 May 2013 Lord Younger, Parliamentary Under, Secretary of State for Intellectual Property, introduced the Intellectual Property Bill to the House of Lords. According to HMG's press release "New Bill proposes reformed intellectual property laws in the UK" 'the Bill delivers the remaining commitments from the Government's response to the Hargreaves Review." It also contains a number of provisions that Hargreaves did not recommend such as criminalizing registered design infringement. Before I discuss the Bill in detail I note with satisfaction that the minister was educated at the University of St. Andrews as was I. As he is slightly younger than me we may have been contemporaries though I don't remember him.  I also note that this is the first Intellectual Property Bill as such. We have had plenty of Bills on various types of IP but this is the first that incorporates the words "Intellectual Property" into its title. In my respectful submission that is something of a misnomer as the Bill deals mainly with patents and designs and would make a few consequential changes to copyright law.  The Designs, Patents and Copyright Bill would have been a more accurate title.

Overview of the Bill

The Bill is quite short consisting of 23 clauses in 4 parts with one schedule of minor amendments to the Patents Act 1977. According to the Explanatory Notes that have been prepared by the Department for Business Innovation and Skills ("BIS"):
"The main purpose of the Bill is to modernise certain aspects of the law relating to intellectual property (“IP”), in order to ensure that the IP system operates more efficiently, is clearer and more accessible, thus increasing legal certainty."
Part 1 provides for designs and Part 2 patents. Part 3 amends the Freedom of Information Act 2000 and the Copyright, Designs and Patents Act 1988. ("CDPA").  Part 4 makes the usual sort of consequential and transitional provisions.

Unregistered Design Right

Definition of "Design"

S.213 (1) of the CDPA provides:
"Design right is a property right which subsists in accordance with this Part in an original design."
Design is defined by s.213 (2) as "the design of any aspect of the shape or configuration (whether internal or external) of the whole or part of an article."  In  Ocular Sciences Ltd v Aspect Vision Care Ltd (No.2) [1997] RPC 289, [1996] EWHC Patents 1, (1997) 20(3) IPD 20022, Mr. Justice Laddie said in relation to that definition:
"The proprietor can choose to assert design right in the whole or any part of his product. If the right is said to reside in the design of a teapot, this can mean that it resides in design of the whole pot, or in a part such as the spout, the handle or the lid, or, indeed, in a part of the lid. This means that the proprietor can trim his design right claim to most closely match what he believes the defendant to have taken."
In Ocular Sciences the claimant claimed that design right subsisted in over 200 lens designs. Its counsel said that the design comprised: 
(a) the front surface dimensions of the lens; 
(b) the rear surface dimensions; and 
(c) the edge characteristics. 
He said that together these features, many of which are determined for each power of lens by the lens designer, made up the lens design. During the argument, the judge had expressed doubt as to whether the detailed dimensions on which the claimant was relying could really be 'designs' within the meaning of the Act. He explained his doubts as follows: 
"For example the -3.00 dioptre and -3.5 dioptre lenses in the plaintiffs' D1 - Edge III Thin range would appear to any normal observer to be identical. In fact, it would take sophisticated measuring equipment in the hands of a skilled technician to tell them apart. Surely they are a single design. They certainly look like the same design."
The claimant's counsel said that this was not so. 
"He said that the use of dimension is just another way of describing or defining the shape or aspect in issue. He argued that there was nothing in the Act to indicate that a shape defined by such detailed dimensions was excluded from protection."
Upon refection, the judge concluded that the claimant was right. 
"This is one of those areas in which it is necessary to bear in mind that the design right provisions are not derived from the Registered Designs Act, 1949. By section 1(1) of the latter Act, the word "design" is defined as meaning
'features of shape, configuration, pattern or ornament applied to an article by any industrial process, being features which in the finished article appeal to and are judged by the eye.'
Furthermore the 1949 Act excludes from consideration features of shape or configuration which are dictated solely by the function which the article has to perform. As that Act and numerous decisions under it demonstrate, appearance is everything where registered design law is concerned. Although the same word "design" is used in relation to design right, its meaning is different. There is no reference in the relevant provisions of the 1988 Act to features which appeal to and are judged by the eye. The Act was intended to give protection to wholly functional designs. The worth and ingenuity of a functional design over designs of similar overall appearance may be due to its detailed relative dimensions. Its detailed shape will, because of the different dimensions, be different. The eye may not be able to distinguish the shapes but that does not mean that they are not different. That being so, it seems to me that it is not possible to exclude detailed dimensional shapes on the ground that they are not designs. This does not mean that mere changes in scale produce different designs."
Clause 1 (1) omits the words "any aspect of" from s.213 (2) of the CDPA. If passed, the subsection would read
"In this Part 'design' means the design ....... of the shape or configuration (whether internal or external) of the whole or part of an article."
There is also a corresponding amendment to the definition of "design" for the purposes of s.51 (3) of the CDPA by virtue of clause 1 (2).

According to the Explanatory Notes 
"Subsection (1) limits the protection for trivial features of designs, by making sure that protection does not extend to “any aspect” of part of an article. It is expected that this will reduce the tendency to overstate the breadth of unregistered design right and the uncertainty this creates, particularly in relation to actions before the courts."
First, the definition of a design in the Copyright, Designs and Patents Act 1988 (CDPA) is not specific enough and does not exclude relatively minor “features” of a design as opposed to the design itself. The effect of this is that claimants can unfairly trim their claims to focus on just one aspect of the copied item, and even one aspect of one part of the copied item. This interpretation of the law (which has been confirmed by the courts) favours owners of designs and makes it difficult for other traders to know what they can and cannot do. Stakeholders claim that this can have a paralysing effect on innovation and can involve parties in unnecessary disputes. To resolve this problem, the definition of UDR will be amended to create certainty whilst not diminishing its unique value.
I have to say that I have my doubts as to the wisdom of these amendments. Mr. Justice Laddie was quite aware of the difficulty expressed above:
"The defendant will not know in what the alleged monopoly resides until the letter before action or, more usually, the service of the statement of claim. This means that a plaintiff's pleading has particular importance. It not only puts forward the claim but is likely to be the only statement of what is asserted to be the design right.
The remedy is particularity in pleading and anyone with any experience of design right litigation will be familiar with the short shrift given to sloppiness. The problem with any change of the law is that it opens the way for re-litigation of decided points.  I fear that some other poor blighter will have to pay for the points that were settled in Ocular Sciences to be revisited.

Definition of "original"

Design right does not subsist in a design unless it is original.  There is no definition of originality but s.213 (4) provides that
"A design is not “original” for the purposes of this Part if it is commonplace in the design field in question at the time of its creation."
In Farmer Build Ltd v Carier Bulk Materials Handling Ltd and Others [1999] ITCLR 297, [1999] RPC 461, [2000] ECDR 42, [1998] EWCA Civ 1900, Lord Justice Mummery endorsed Mr. Justice Aldous's decision in C & H Engineering v F Klucznik & Sons Ltd [1992] FSR 421, 427 that subject to s.213 (4) "original" in s. 213 (1) had the same meaning as in the earlier provisions of the 1988 Act relating to copyright in original literary, dramatic, musical and artistic works under s. 1 (1) (a) CDPA.  In Farmer Lord Justice Mummery said that the overall purpose of s.213 (4)
"was not to impose a requirement of novelty in order to secure the limited protection enjoyed by unregistered designs, but to guard against situations in which even short term protection for functional designs would create practical difficulties. Substantial similarity of design might well give rise to a suspicion and an allegation of copying in cases where substantial similarity was often not the result of copying but an inevitable consequence of the functional nature of the design. All that is meant by "original designs" in the context of s. 213 is (a) that the design for which protection is claimed must have been originated by the designer in the sense that it is not simply a copy by him of a previous design made by someone else (like a photocopy) and (b) that where it has not been slavishly copied from another design, it must in some respects be different from other designs, so that it can be fairly and reasonably described as not commonplace. The context is important. Design right, like copyright, is informally acquired and affords weaker protection, as only copying is actionable. Copying may be inferred from proof of access to the protected work, coupled with substantial similarity. This may lead to unfounded infringement claims in the case of functional works, which are usually bound to be substantially similar to one another. On the other hand, a registered design, like a patent, is a stronger right, is harder to obtain, but it is vulnerable to challenge on the ground that it is lacking in novelty and it would not be novel if it was well known and used by others. To introduce a requirement of novelty into unregistered designs would effectively remove from the limited new right a large measure of the protection that the right must have been intended to confer on designers to protect their work from plagiarism. It cannot have been the purpose of section 213(4) to take away by one provision all the protection given by another."
In determining whether a design was original Lord Justice Mummery said that the court should follow the following methodology:
"(1) It should compare the design of the article in which design right is claimed with the design of other articles in the same field, including the alleged infringing article, as at the time of its creation.

(2) The court must be satisfied that the design for which protection is claimed has not simply been copied (e.g. like a photocopy) from the design of an earlier article. It must not forget that, in the field of designs of functional articles, one design may be very similar to, or even identical with, another design and yet not be a copy: it may be an original and independent shape and configuration coincidentally the same or similar . If, however, the court is satisfied that it has been slavishly copied from an earlier design, it is not an "original" design in the "copyright sense" and the "commonplace" issue does not arise.

(3) If the court is satisfied that the design has not been copied from an earlier design, then it is" original" in the" copyright sense". The court then has to decide whether it is "commonplace". For that purpose it is necessary to ascertain how similar that design is to the design of similar articles in the same field of design made by persons other than the parties or persons unconnected with the parties.

(4) This comparative exercise must be conducted objectively and in the light of the evidence, including evidence from experts in the relevant field pointing out the similarities and the differences, and explaining the significance of them. In the end, however, it is for the court and not for the witnesses, expert or otherwise, to decide whether the design is commonplace. That judgment must be one of fact and degree according to the evidence in each particular case. No amount of guidance given in this or in any other judgment can provide the court with the answer to the particular case. The closer the similarity of the various designs to each other, the more likely it is that the designs are commonplace, especially if there is no causal link, such as copying, which accounts for the resemblance of the compared designs. If a number of designers working independently of one another in the same field produce very similar designs by coincidence the most likely explanation of the similarities is that there is only one way of designing that article. In those circumstances the design in question can fairly and reasonably be described as "commonplace". It would be a good reason for withholding the exclusive right to prevent the copying in the case of a design that, whether it has been copied or not, it is bound to be substantially similar to other designs in the same field.

(5) If, however, there are aspects of the plaintiff's design of the article which are not to be found in any other design in the field in question, and those aspects are found in the defendant's design, the court would be entitled to conclude that the design in question was not "commonplace" and that there was good reason for treating it as protected from misappropriation during the limited period laid down in the 1988 Act. That would be so, even though the design in question would not begin to satisfy any requirement of novelty in the Registered Designs legislation."
Clause  1 (3) of the Bill would insert the words "in a qualifying country" after "commonplace" in s.213 (4). It would also add that "and qualifying country” has the meaning given in section 217 (3)”of the CDPA. S.213 (4) would thus read
"A design is not “original” for the purposes of this Part if it is commonplace in a qualifying country in the design field in question at the time of its creation and qualifying country” has the meaning given in section 217 (3).”
Paragraph 10 of the Explanatory Notes states that there has been confusion as to the geographical coverage over which the meaning of "commonplace" applies and that the amendment aims to remove that confusion by specifying that the meaning of “commonplace” applies to those countries defined under section 217 (3). It would appear from the Impact Assessment that the rationale for this change is to achieve consistency with the Registered Designs Act 1949: 
"where the analogous concept of “novelty” extends to the whole of the European Economic Area. To resolve this problem, the definition of “commonplace” will be extended to expressly cover the EU, and other geographic areas where the UDR subsists."
Since the Court of Appeal went out of its way in Farmer to make clear that novelty and originality are very different things and that the concept of novelty had no relevance to unregistered design right it is far from obvious why the definition of "commonplace" needs to be brought in line with that of "novelty."

Commissioned Designs

One of the anomalies of the CDPA is that a person who commissions a design acquires design right in the design (unless the commissioner and designer agree otherwise) but a person who commissions a copyright work such as a computer program does not acquire the copyright in that work (compare s.11 of the CDPA with s.215). Clause 2 (1) would cure that anomaly by deleting s.215 (2).

After amendment s.215 would provide that:
"(1)    The designer is the first owner of any design right in a design which is not created ....... in the course of employment.
(2)     ....................................
(3)    Where, in a case ...................... a design is created by an employee in the course of his employment, his employer is the first owner of any design right in the design.
(4)     If a design qualifies for design right protection by virtue of section 220 (qualification by reference to first marketing of articles made to the design), the above rules do not apply and the person by whom the articles in question are marketed is the first owner of the design right."
Clause 2 (2) would make consequential amendments elsewhere in the CDPA. 

I was not aware that this anomaly was ever a problem in practice.   Designers who wanted to retain design rights in their designs contracted out of s.215 (2) in their terms and conditions or other contracts.

If Parliament passes this amendment customers who need design right in their designs will have to negotiate and possibly pay a little extra for it as  those who commission software development and other copyright works have to do now. 

Qualification

Before the 1 Aug 1989 functional designs were protected in the UK by artistic copyright.  Copying an article made to a design that had been recorded in a design drawing was tantamount to copying the drawing and thus infringed the copyright in the drawing.  Under the Berne and Universal Copyright Conventions citizens and residents of states that are party to one or other of those Conventions are entitled to copyright protection for their works under the copyright laws of all the other contracting states. Thus, an American author acquires copyright protection for his work in the United Kingdom under our copyright law just as a British author acquires copyright protection in the USA under that of the USA.

One of the many problems of protecting functional designs by artistic copyright was that not all countries protected such designs in that way. A few Commonwealth and other common law countries such as Ireland and South Africa did but most states did not. Consequently, many foreign designers enjoyed more extensive protection for their designs in the UK than they did at home. More importantly, they enjoyed greater protection in the UK than British designers enjoyed in their countries. 

Part III of the CDPA substituted unregistered design right as the means of protecting functional designs for artistic copyright. Since design right is not covered by the copyright conventions new provisions for reciprocal protection had to be adopted. That resulted in the horrendously complicated provisions of sections 217 to 221 of the CDPA.

Clause 3 (2) of the Bill would simplify those provisions slightly.  After amendment s.217 would be as follows:
"(1)    In this Part—
...........................
“qualifying person” means
(a)    an individual habitually resident in a qualifying country, or
(b)    a person who has in any qualifying country a place of business at which substantial business activity is carried on.”
(2)     References in this Part to a qualifying person include the Crown and the government of any other qualifying country.
(3)    In this section “qualifying country” means—
(a)    the United Kingdom,
(b)    a country to which this Part extends by virtue of an Order under section 255,
(c)    another member State of the European Union], or
(d)    to the extent that an Order under section 256 so provides, a country designated under that section as enjoying reciprocal protection.
(4)............................
(5)     In determining for the purpose of the definition of “qualifying person” whether substantial business activity is carried on at a place of business in any country, no account shall be taken of dealings in goods which are at all material times outside that country."
Other sub-clauses of clause 3 make consequential changes elsewhere in the Act. One of the most important of those changes is that qualification by first marketing would refer to the country in which sales are made rather than the nationality or residence of the person doing that marketing.

Though fairly minor, these amendments are sensible and deserve support.

Exceptions

Clause 4 inserts the following exceptions to design right:
insert—
Miscellaneous
 244A    Exception for private acts, experiments and teaching
Design right is not infringed by—
(a)      an act which is done privately and for purposes which are not commercial;
(b)      an act which is done for experimental purposes; or
(c)      an act of reproduction for teaching purposes or for the purpose of making citations provided that—          
(i)   the act of reproduction is compatible with fair trade practice and does not unduly prejudice the normal exploitation of the design, and
(ii) mention is made of the source
.
244B Exception for overseas ships and aircraft
Design right is not infringed by—
(a)      the use of equipment on ships or aircraft which are registered in another country but which are temporarily in the United Kingdom;
(b)     the importation into the United Kingdom of spare parts or accessories for the purpose of repairing such ships or aircraft; or
(c)     the carrying out of repairs on such ships or aircraft.”
According  to the the Explanatory Notes the policy is to bring unregistered design right in line with registered design law. Since design right is infringed by copying the design and not by making a similar work I struggle to see the need for such harmonization. I also repeat the remarks that I made above with regard to originality that novelty and originality are two very different things and novelty has no relevance to design right.

Registered Community Designs

S.53 (1) of the CDPA provides:a defence to copyright infringement in the following circumstances:
"The copyright in an artistic work is not infringed by anything done—
(a)    in pursuance of an assignment or licence made or granted by a person registered under the Registered Designs Act 1949 as the proprietor of a corresponding design, and
(b)    in good faith in reliance on the registration and without notice of any proceedings for the cancellation or invalidation of the registration or for rectifying the relevant entry in the register of designs;
and this is so notwithstanding that the person registered as the proprietor was not the proprietor of the design for the purposes of the 1949 Act. "
S.53 (2) defined a “corresponding design”, in relation to an artistic work as "a design within the meaning of the 1949 Act which if applied to an article would produce something which would be treated for the purposes of this Part as a copy of the artistic work."  Clause 5 would extend that defence to registered Community designs.

Registered Designs

Property in Commissioned Designs

S.2 (1A) of the Registered Designs Act 1949 provides:
"Where a design is created in pursuance of a commission for money or money’s worth, the person commissioning the design shall be treated as the original proprietor of the design."
Clause 6 (1) would remove s.2 (1A) and all references to that subsection in the Act. The purpose of that provision is to harmonize the 1949 Act with the Community Design Regulation.

I repeat the remarks that I made earlier in relation to commissioning functional designs.  If this provision is passed those commissioners who need to own the commissioned designs must contract for ownership of the design. They may be able to do so in their commissioning agreements or possibly terms and conditions of procurement.

Right to Apply for a Registered Design

S.3 (2) of the Registered Designs Act 1949 requires an application for the registration of a design to be made by the person claiming to be the proprietor of the design. There is no similar requirement in the Community Design Regulation. Clause 6 (2) would abolish that subsection and bring the 1949 Act in line with the Regulation.

Right of Prior Use

S.64 of the Patents Act 1977 and s.11 (3) of the Trade Marks Act 1994 provide defences of prior user in patent and trade mark infringement proceedings. There is no corresponding right in the Registered Designs Act 1949. Clause 7 (1) would establish such a right by inserting a new s.7B into that Act:
“7B Right of prior use
(1)   A person who, before the application date, used a registered design in good faith or made serious and effective preparations to do so may continue to use the design for the purposes for which, before that date,
the person had used it or made the preparations to use it.
(2) In subsection (1), the “application date”, in relation to a registered design, means—
(a)    the date on which an application for the registration was made under section 3, or
(b) where an application for the registration was treated as having been made by virtue of section 14(2), the date on which it was treated as having been so made.
(3) Subsection (1) does not apply if the design which the person used, or made preparations to use, was copied from the design which was subsequently registered.
(4) The right conferred on a person by subsection (1) does not include a right to licence another person to use the design.
(5) Nor may the person on whom the right under subsection (1) is conferred assign the right, or transmit it on death (or in the case of a body corporate on its dissolution), unless—
(a) the design was used, or the preparations for its use were made, in the course of a business, and
(b) the right is assigned or transmitted with the part of the business in which the design was used or the preparations for its use were made.”
 Accession to the Hague Agreement

The Hague Agreement Concerning the International Deposit of Industrial Designs facilitates the registration of designs in much the same way as the Patents Co-operation Treaty does with patents and the Madrid Protocol with trade marks. The EU has been party to the Hague Agreement in respect of registered Community designs since 2008. Clause 8 would insert a new s.15ZA into the Registered Designs Act 1949 to enable the UK to accede to that Agreement:
“15ZA Accession to the Hague Agreement
(1)    The Secretary of State may by order make provision for giving effect in the United Kingdom to the provisions of the Geneva Act of the Hague Agreement Concerning the International Registration of Industrial
Designs adopted by the Diplomatic Conference on 2 July 1999.
(2)    An order under this section may, in particular, make provision about—
(a) the making of applications for international registrations at the Patent Office;
(b) the procedures to be followed where an international registration designates the United Kingdom;
(c) the effect of an international registration which designates the United Kingdom;
(d) the communication of information to the International Bureau;
(e) the payment of fees.
(3)    An order under this section may—
(a) amend this Act;
(b) apply specified provisions of this Act with such modifications as may be specified.
(4)    An expression used in subsection (2) and in the Agreement referred to in subsection (1) has the same meaning in that subsection as it has in the Agreement.”

Repeal of S.18 (3A)

S.19 (3A) of the Registered Designs Act 1949 provides that where unregistered design right subsists in a registered design, the Registrar of Designs (that is to say the Comptroller or chief executive of the Intellectual Property Office) may not register an interest unless he or she is satisfied that the person entitled to that interest is also entitled to a corresponding interest in the design right. Clause 9 (1) would abolish s.19 (3A).

Inspection of the Register

Clause 9 (2) would extend the public right of inspection under s.22 (1) of the Registered Designs Act 1949 to "every document kept at the Patent Office in connection with that design.” The remaining sub-clauses of clause 9 provide for electronic inspection of the register.

Accounts of Profit against Innocent Infringers

S.24B of the Registered Designs Act 1949 excuses innocent infringers from liability for damages or an account of profits but there is no similar provision in the Community Designs Directive. Clause 10 (1) would amend s.24B (1) as follows to allow claimants to claim an account of profits from an innocent infringer but not damages:
"In proceedings for the infringement of the right in a registered design damages shall not be awarded................. against a defendant who proves that at the date of the infringement he was not aware, and had no reasonable ground for supposing, that the design was registered."
Appeals to the Appointed Person

Clause 10 (2) would allow appeals from the Registrar to an appointed person as an alternative to the court as already happens in trade mark proceedings.  This is a very sensible reform and one for which I have argued for many years.  I have suggested it in several consultations including, most recently, on the reform of the Patents County Court (see my article "Costs: why not abolish the Patents County Court" 15 Jan 2010). Perhaps I can claim credit for this very sensible measure. Appeals to the Registered Designs Appeal Tribunal are abolished by clause 10 (4)..

Opinion on Designs

Clause 11 (1) of the Bill would insert a new s.28A into the Registered Designs Act 1949 on the lines of s.74A of the Patents Act 1977. Such new section would enable the Secretary of State to make regulations for IPO examiners to give opinions on
"specified matters relating to—
(a) designs registered under this Act;
(b) designs of such other description as may be specified."
Correspondingly, clause 11 (2) would insert a new s.249A into the CDPA to extend the new designs opinion service to unregistered design right questions.

Interestingly, no equivalent to s.74B of the Patents Act 1977 is proposed though rules for reviewing opinions could be made by statutory instrument.

Like appeals to the appointed person, this is a very sensible reform and one that I have suggested many times before.  I hope that Parliament accepts these provisions.

Forms and Directions

Another sensible reform is clause 12 which would give the Registrar the same sort of powers to prescribe forms, make rules and give directions in relation to designs as he has in relation to patents and trade marks.

Criminalizing Registered Design Infringements

A much less sensible provision and one which I hope that Parliament will reject is clause 13 which would introduce a new offence of copying a registered design punishable with a maximum penalty of 10 years imprisonment and an unlimited fine. In my very first post to this blog "Porridge for Patent Infringement" 22 Aug 2005 and many subsequent posts I warned of the dangers of extending the criminal law from bootlegging, counterfeiting and piracy to patent and registered design infringement.

Let me give you just one reason why this proposal is barmy. Questions such as whether a design is new and has individual character are regarded as sufficiently difficult to remove them from the general jurisdiction of the Chancery Division and assign them to the specialist judges of the Patents Court (see CPR 63.2). Those questions, which are thought rightly or wrongly to be too difficult for all but a handful of judges, will be put routinely to juries and lay magistrates since it would be a defence under s.35AZ (4) to show reasonable relief that the registration of the design was invalid.  The litigation in California between Samsung and Apple shows the folly of entrusting difficult questions of IP law to juries (see "Apple v Samsung - Yet more Revelations" 31 Aug 2012). In the Apple case the foreman of the jury is said to have known something about patent law. Our juries and indeed lay justices are drawn from all parts of society. There is no educational or even IQ qualification for serving on a jury or serving as a magistrate.

There is an international obligation under art 61 of TRIPS to "provide for criminal procedures and penalties to be applied at least in cases of wilful trademark counterfeiting or copyright piracy on a commercial scale" but there is no obligation to extend it to any other IP right. If this proposal comes into law it will give succour to those who has been campaigning for criminal sanctions for patent infringement for years.

This dangerous proposal is no doubt the result of persistent lobbying by ginger groups of manufacturers and designers who make the very reasonable point that enforcement in the Patents and Patents County Courts was notoriously expensive. That was certainly the case before 1 Oct 2010 but it is no longer true now (see "New Patent County Court Rules" 31 Oct 2010). If any changes to the law are needed the extension of the jurisdiction of the small claims track of the Patents County Court to registered and registered Community design cases would be much more sensible.

Patents

Marking

S.61 (1) of the Patents Act 1977 provides:
"In proceedings for infringement of a patent damages shall not be awarded, and no order shall be made for an account of profits, against a defendant or defender who proves that at the date of the infringement he was not aware, and had no reasonable grounds for supposing, that the patent existed; and a person shall not be taken to have been so aware or to have had reasonable grounds for so supposing by reason only of the application to a product of the word “patent” or “patented”, or any word or words expressing or implying that a patent has been obtained for the product, unless the number of the patent accompanied the word or words in question."
Clause 14 (1) would insert the words  “or a relevant internet link”.after “the number of the patent” at the end of the subsection. Clause 14 (2) would insert a new sub-section (1A) defining "relevant internet link" as
"an address of a posting on the internet—
(a) which is accessible to the public free of charge, and
(b) which clearly associates the product with the number of the patent.”
I suppose a link to esp@cenet might do though patentees would do well to monitor their links in view of the changes to the service.

Opinions

S.74A (1) of the Patents Act 1977 confines examiners' opinions to the following issues:
"(a) as to whether a particular act constitutes, or (if done) would constitute, an infringement of the patent;
(b) as to whether, or to what extent, the invention in question is not patentable because the condition in section 1(1)(a) or (b) above is not satisfied."
Clause 15 would broaden that jurisdiction to a prescribed matters in relation to patents which could include supplementary protection certificates by virtue of sub-clause (3),  Presumably those prescribed matters will be defined by statutory instrument.  Clause 15 (4) will give the examiners' opinions some real welly since the Comptroller would be able to revoke patents found to be invalid under the following new sub-sections to s.73:
“(1A)   Where the comptroller issues an opinion under section 74A that section 1(1)(a) or (b) is not satisfied in relation to an invention for which there is a patent, the comptroller may revoke the patent.
(1B)   The power under subsection (1A) may not be exercised before—
(a)    the end of the period in which the proprietor of the patent may apply under the rules (by virtue of section 74B) for a review of the opinion, or
(b)    if the proprietor applies for a review, the decision on the review is made (or, if there is an appeal against that decision, the appeal is determined).
(1C) The comptroller shall not exercise the power under subsection (1A) without giving the proprietor of the patent an opportunity to make any observations and to amend the specification of the patent without contravening section 76.”
The threat of revocation means that patentees (and more importantly their patent agents) have to take examiners' opinions seriously and produce the sort of evidence with which they would resist a revocation application.  If that happens it will be no bad thing.

Unified Patent Court

Undoubtedly the most important provision of the Bill is clause 16 which would insert a new s.88A into the Patents Act 1977 to implement the agreement on the Unified Patent Court.  The text of the new section would be as follows:
88A Implementation of Agreement on a Unified Patent Court
(1)   The Secretary of State may by order make provision for giving effect in the United Kingdom to the provisions of the Agreement on a Unified Patent Court made in Brussels on 19 February 2013.
(2)   An order under this section may, in particular, make provision—
(a)   to confer jurisdiction on a court, remove jurisdiction from a court or vary the jurisdiction of a court;
(b)    to require the payment of fees.
(3)    An order under this section may also make provision for varying the application of specified provisions of this Act so that they correspond to provision made by the Agreement.
(4)  An order under this section may—
(a)  make provision which applies generally or in relation only to specified cases;
(b) make different provision for different cases.
(5) An order under this section may amend this Act or any other enactment.
(6) An order under this section may not be made unless a draft of the order has been laid before, and approved by resolution of, each House of Parliament.
(7) The meaning of “court” in this section is not limited by the definition of that expression in section 130(1).”
 The February agreement clears the last hurdle for the implementation of the unitary patent, that is to say a European patent designating the member states of the European Union except Spain and Italy as a single territory. It is the next best thing to an EU patent. The idea of a Community patent was first agreed in Community Patent Convention nearly 40 years ago and Parliament actually ratified that Convention by passing the Patents Act 1977. The Convention never came into force because of objections over language and litigation.  There have been a number of attempts to revive the idea but they have all foundered on the same objections.

The language objection is that Italian and Spanish are not official languages at the EPO in Munich as they are at OHIM in Alicante. That question has still not been resolved wholly which is why this new European patent has to be a unitary patent rather than an EU one.

The litigation objection has been resolved by the February agreement which will establish a unified patents court with a chamber in London to adjudicate on disputes over life sciences inventions. Hargreaves recommended that HMG
"should attach the highest immediate priority to achieving a unified EU patent court and EU patent system, which promises significant economic benefits to UK business."
According to the press release that I mentioned earlier it is estimated that the unitary patent will lead to direct benefits to business of up to £40 million per year and it is anticipated that the London Court will benefit the economy an estimated £200 million per annum. Of course, all those benefits will be lost if the UK ever leaves the EU.

Information Sharing with Overseas Patent Offices

Hargreaves also recommended that the UK should work to make the Patent Cooperation Treaty a more effective vehicle for international processing of patent applications. That would be achieved by clause 18 which would amend s.118 of the Patents Act to facilitate the sharing of information with overseas patent offices.

Other Provisions

Clause 19 would insert a new s.22A into the Freedom of Information Act 2000 to exempt certain information derived from a research programme from the disclosure provisions of the Act in certain circumstances.

Clause 20 would impose a duty on the Secretary of State the Secretary of State to present to Parliament by the end of September each year a report that sets out how, in his opinion, the activities of the IPO has supported innovation and growth in the UK. This is another of Hargreaves's recommendations.

Clause 21 would enable the Secretary of State to extend copyright and performers' right protection to citizens and residents of new states without listing all the countries and territories to which such protection already applies.

Conclusion

Except for clause 13 which must be resisted strenuously, this Bill contains some very sensible provisions and is generally to be welcomed. I shall be bending the ear of my MP as the Bill proceeds through the Commons and I urge everyone with an interest in IP olicy to do the same. Should anyone wish to discuss this article or IP generally he or she can call me on 020 7404 5252 or use my contact form. I can also be followed on  Facebook, Linkedin, twitter or Xing.

Further Reading

ACID Submission Details and Survey
Tanya Aplin and Others "Submissions to the UK IPO on the issue of criminal sanctions for the deliberate copying of designs" 1 Oct 2012 IPO
Thomas Dillon "UK: Intellectual Property Bill" 4-5 IP 28 May 2013
International Chamber of Commerce "Business Concerns on Use of Criminal Sanctions for Design Infringements" 30 Apr 2013
IP Federation "Criminal sanctions for Registered Design infringement" 3 June 2013
James Nurton "Should there be criminal penalties for design infringement" 10 May 2013 Managing IP
Out Law "Government considers introducing criminal sanctions for infringements of design rights"
"Reforms to design rights and patents framework proposed by Government" 13 May 2013

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