Diving Deeper Into the Amendments to the Australian Designs Act: Tips, Tricks and Risks (Part 1)

Protecting the visual appearance of a product, or its packaging, should be a key consideration in any comprehensive IP protection strategy. We have previously written about amendments to the Australian Designs Act 2003 (Cth) (here and here). All changes to the Designs Act have now come into force as of 10 March 2022. In this first of a series of articles, we delve deeper into amendments that introduce the long awaited grace period.

Background – newness and distinctiveness
In Australia, to obtain an enforceable registration for a design, the design must be both new and distinctive. Design owners frequently face problems with the newness and distinctiveness requirement in two scenarios:

1. During the design examination and certification process: To obtain an enforceable design right, the design must pass a substantive examination. A Designs Examiner will undertake a review of the design compared to the prior art base, which includes all designs that have been used in Australia, designs that have been published anywhere in the world, and designs that are the subject of earlier applications that are filed with foreign designs offices. If the Designs Examiner finds that the design – or a substantially similar design – appears in the prior art base, the design may not be certified. Notably, a third party can challenge the validity of a design registration by independently requesting substantive examination.
2. During disputes: Even if the Designs Examiner has certified a design, the validity of the design can be challenged post-certification by a third party arguing that the design lacks newness or distinctiveness. The challenge commonly occurs when a design owner sues a third party for design infringement, and where the third party counter-claims that the design owner does not have a valid design right.

Until now, if design owners had published their own design prior to filing an application for that design, then their own publication would be a part of the prior art base. Prior publication would therefore render any subsequently filed Australian design registration unenforceable. This problem has been addressed by the introduction of a ‘grace period’ provision, albeit that there are some important limitations that designs owners need to be wary of.

How does the grace period work?
The amendments to the Designs Act introduce a 12-month grace period. This means that the publication or use of a design will be disregarded when a Designs Examiner or a Court is assessing whether a design is new and distinctive. Importantly, the grace period will only be effective where publication or use of a design occurred:

• On or after 10 March 2022;
• In the period of 12 months before the design’s priority date (this is typically the filing date of the design application); and
• By a “relevant entity” (i.e., the registered owner of the design, their predecessor in title or a person who created the design).

Key points

1. Publication or use of a design before 10 March 2022 will still be fatal to the validity of a design application, if the application is filed after the publication or use.
2. Publications under normal circumstances by the Australian Designs Registrar, or foreign designs offices, in the course of filing applications cannot be disregarded under the grace period provisions. To protect a foreign-filed design in Australia, an Australian application for that design must still be filed within the 6 months of the priority date of the foreign design application.
3. The grace period provisions will apply where design protection is sought for a slight variation to an earlier disclosed design.
4. Where a design is published anywhere, or used in Australia, by a third party before the filing date of a design application for a similar or identical design, the third party is presumed to have derived the design from the design owner. The owner of the registered design must be able to show that a relevant entity published or used the design within 12 months prior to the priority date of the design application, and it is from this disclosure that the third party is presumed to have obtained the design. As a result, the prior publication or use by the third party may be disregarded as prior art. This presumption is nevertheless rebuttable – if the third party can prove it created the design independently of a design owner, then the third party’s design will form part of the prior art base.

Conclusion
Despite the introduction of the grace period, keeping a design secret until filing an application to protect it is still best practice for design owners. In part, this is because the amendments to the Designs Act also include an exemption from infringement actions for a third party which starts using a design that has been published, but before an application for the design has been filed (we will discuss this further in our next article). To this point, the intention behind the introduction of a grace period is to help designers who inadvertently publish their design before they have a chance to file the application, rather than to enable designers to test their designs in the market before choosing which designs to file.

Importantly, the nature of the grace period provisions in the Designs Act highlight that designs owners should have good systems in place for tracking details of the origination and publication of a design.

Additional information
Below we provide fictional scenarios which demonstrate how the grace period operates:

Question 1:
On 1 December 2021, Catherine shared her design of an evening gown on her Instagram. She was unaware that she needed to seek registration of her design prior to disclosure.

Has her inadvertent disclosure rendered her design ineligible for protection?

Answer:
Yes – Catherine’s publication isn’t covered by the newly introduced grace period provisions, which apply to publications on or after 10 March 2022.

If Catherine had first shared her design on Instagram today, she would have 12 month grace period in which to apply to register her design. Her Instagram post would be disregarded when assessing the newness and distinctiveness of the design.

Question 2:
Today, Catherine shares her design of an evening gown on her Instagram.

In April 2022, she becomes aware of the Australian designs protection regime and wants to file a design application. But since publishing the post on Instagram, she’s made adjustments and improvements to her evening gown and it looks slightly different to the gown in her post.

Can Catherine still protect her revised evening gown in Australia?

Answer:
Yes – Catherine can register a slight variation of her earlier published design.

The sections are intended to allow designers to make modifications and improvements to designs after the first publication.

Question 3:
Today, Catherine shares her design of an evening gown on her Instagram.

In May 2022, a retailer releases a new evening wear range on their website, which includes a gown that looks very similar to Catherine’s gown. Catherine didn’t authorise the retailer to make a gown that looks like hers.

Catherine becomes aware of the retailer’s gown and files an application to protect her design, and then applies for her design to get certified.

Does the Designs Office take into account the retailer’s gown when it assesses Catherine’s gown for newness and distinctiveness?

Answer:
No – the retailer’s gown is presumed to derive from Catherine via her Instagram post. Catherine can still file an application for her design and request that it be certified.

Should a Designs Examiner assert that Catherine’s design lacks newness and distinctiveness in view of the retailer’s publication, Catherine will have the opportunity to respond to the examiner’s report with evidence of her Instagram post and the date of its posting. The retailer’s prior publication of the gown may then be disregarded for the assessment of newness and distinctiveness.

By Dadar Ahmadi-Pirshahid, Olivia Coburn, Kerry Dick and Chris Vindurampulle