At present, there are no criminal sanctions for those who infringe UK and/or Community registered designs or design rights even though they are defined in their respective legislations as a 'personal property' and 'property right'.
The new Intellectual Property Bill (the 'IP Bill') proposes to extend criminal sanctions to those who are deliberately copying UK and Community registered designs.
A person commits this criminal offence if, in the course of a business, they copy a registered design so as to make a product exactly or substantially to that design. The person copying must have done so knowing, or having reason to believe, that the design is a registered design, and without the consent of the registered proprietor of the design. The IP Bill also proposes to cover a person who, in the course of a business, offers, puts on the market, imports, exports or uses the product, or stocks it for one or more of those purposes, without the consent of the registered proprietor of the design. The person must do so knowingly, or having reason to believe, that a design has been copied without the consent of the registered proprietor so as to make the product exactly or substantially to the design, and the design is a registered design. It is a defence if the person facing the criminal charges can show they reasonably believed the registered design to be invalid or, of course, if there is no civil infringement. As UK and Community registered designs are not examined for validity prior to registrations, this defence proposes to tackle the concerns that invalid designs may result in criminal proceedings.
The penalties for committing such a criminal offence are imprisonment, fine or both. This reform attempts to deter those copying designs and will provide greater protection to brand owners and designers. However, counterarguments are that due to the risk of criminal proceedings, decision making dynamics such as whether to bring new products to the market within companies may change. A knock on effect to that may be consumers are less likely to see innovative competitive products and ultimately it can stifle innovation due to the fear of stigma of criminal proceedings, risk of a criminal record and the consequences.
The IP Bill will allow anyone including design right holders, to ask the Intellectual Property Office to provide an expert opinion on whether the UK design is valid or being infringed. The expert opinion will however be non-binding. As it has been mentioned by the Department of Business Innovation and Skills (BIS) "This will help businesses assess the strength of their case before embarking on more formal and costly legal proceedings, and may help avoid litigation altogether".
Under the IP Bill commissioning a design will no longer mean automatic ownership of the design, as is the case for UK unregistered design rights. The commissioner will need to obtain a written assignment of the design.
Right of prior use
The IP Bill proposes to allow a third party to continue using a design for the purposes for which, before that date, he had used it or made the preparations to use it. This will allow the third party to finish using the design for the preparation they have previously made without the fear that they may be stopped with a knock on effect of putting their investment at risk. It needs to be noted that the right of prior use may not be licenced or assigned, save for the exception that the design used or the preparations for its use were made, in the course of a business, and the right is assigned or transmitted with the part of that business.
The IP Bill is likely to receive the Royal Assent early 2014.