the intellectual property act 2014

The Intellectual Property Act 2014

Jane Lambert and Alexander Rozycki

Intellectual Property Act 2014

16:00 - 16:30 Introduction and Overview

16:30 - 17:00 Legislative Policy

17:00 - 17:30 Criminal Sanctions

17:30 - 18:00 Practical Consequences

Introduction and Overview

“An Act to make provision about intellectual property”

Part I: Unregistered and Registered Designs

Part 2: Patents

Part 3: Miscellaneous

Part 4: General

Schedule: Minor Amendments to Patents Act 1977

Part I: Unregistered Designs

S.1 amends definition of “design” and “commonplace” in s.213 (2) and (4) CDPA.

S.2 amends s.215 of the CDPA to provide for the designer rather than the person commissioning a design shall be the first owners of the design right in a design.

Part I: Unregistered Designs

S.3 amends s.217 to make it easier for businesses from outside the EU to qualify for design right in the UK.

This avoids the difficulty that arose in Mackie Designs Inc v. Behringer Specialised Studio Equipment (UK) Ltd. and Others

Part I: Unregistered Designs

S.4 adds a new s.244A to the CDPA providing exceptions for:(a) acts done privately for non commercial purposes;(b) for experimental purposes; or(c) teaching or citation purposes subject to conditions and a new s.244B permitting certain acts on ships and aircraft.

Part I: Registered Community Designs

S.5 extends the exception to copyright provided by s.53 of the CDPA for registered designs to registered Community designs.

Part I: Registered Designs

S.6 repeals s.2 (1A) of the Registered Designs Act 1949 which entitled the person commissioning a design to apply to register the design.

S.7 inserts a new s.7B which creates a new defence of prior user similar to s.64 of the Patents Act 1977 or s.11 (3) of the Trade Marks Act 1994 which did not exist before.

Part I: Registered Designs

S.8 inserts a new s.15ZA into the Registered Designs Act 1994 as amended which allows the Secretary of State to make an Order in Council (statutory instrument) that would enable the UK to accede to the Hague Agreement.

The Hague Agreement is a convention that allows applicants to apply simultaneously to register designs in several countries from a single application like the PCT or Madrid Protocol.

Part I: Registered Designs

S.9 repeals s.19 (3A) of the Registered Designs Act 1949 which requires an applicant for registration of a design to own the corresponding design right and inserts a new title to s.22 and a new s.22 (1) (aa) which provides for public inspection of documents through the internet.

Part I: Registered Designs

S.10 amends s.24B (1) of the Registered Designs Act 1949 and inserts a new s.27A and s.27B which provides for appeals to the Appointed Person from the hearing officer as happens under s.76 of the Trade Marks Act 1994. The section also repeals s.28 which establishes a Registered Designs Appeal Tribunal.

Part I: Registered Designs

S.11 inserts a new s.28A into the Registered Designs Act 1949 and a new s.249A into the Copyright, Designs and Patents Act 1988 which provides for examiners’ opinions on registered designs and unregistered design rights similar to s.74A and s.74B of the Patents Act 1977.

Part I: Registered Designs

S.12 inserts a new s.31A and other provisions that enable the Registrar to make regulations for the registration of designs.

S.13 inserts new s.35ZA, s,35ZB, s,35ZC and s.35ZD into the Registered Designs Act 1949 which imposes criminal liability for intentional copying of registered designs.

S.14 inserts new subsections (3) to (7) to s.35A

Part II: Patents

S.15 inserts a new subsection (1A) into s.62 of the Patents Act 1977 which provides for an internet link to give notice of the existence of a valid patent.

S.16 amends s.74A, s.74B and Sched 4A of the Patents Act 1977 to broaden the scope of the opinions service and inserts subsections (1A), (1B) and (1C) into s.73 to give the Comptroller power to revoke patents that an examiner believes to be invalid.

Part II: Patents

S.17 inserts a new s.88A and a new s.88B into the Patents Act 1977 that enables the Secretary of State to make an Order in Council to implement the Agreement on the Unified Patent Court.

S.18 inserts a new paragraph (aa) into s.118 (3) and new subsections (3A). (3B) and (3C) to permit the IPO to share information about patent applications with other patent offices.

Part II: Patents

S.19 amends the Patents Act 1977 in accordance with the Schedule as follows:1. Inserts a new subsection (aa) into s.5 for WTO

member states;2. Inserts a new subsection (4A) into s.20B for

assertion of third party rights;3. Substitutes “anniversary” for number of years

in s.35 (7) and (9), s.72 (2) (b) and s.74 (4) (b).4. Widens the legal representatives who can

exercise rights of counsel

Part II: Patents

5. Corrects a typographical error in s.60 (7).6. Inserts a new subsection (5A) into s.77.

Part III: Miscellaneous

S.20 inserts a new s.22A into the Freedom of Information Act 2000 which exempts research information given in say grant applications or tenders from a freedom of information request.

s.21 imposes a duty upon the Secretary of State to report every year on how the IPO has promoted innovation and growth and how far IP legislation has facilitated innovation and growth.

Part III: Miscellaneous

S.22 amends s.154 and s.159 of the Copyright, Designs and Patents Act 1988 relating to qualification for the subsistence of copyright and inserts a new s.212A that enables the Secretary of State to make regulations to take account of changes in international law.

Part IV: General

S.23 enables the Secretary of State to make minor and consequential amendments.

S.24 enables the Secretary of State to make a commencement order.

Further Information

Jane Lambert4-5 Gray’s Inn SquareLondonWC1R 5AHDX 1029 LDEjlambert@4-5.co.uk020 7404 5252

Legislative Policy

● For some years the UK had lagged behind other countries in the number of applications for patents and registered designs and in the application of research carried out in British laboratories to the development of new products and processes.

● The previous government had been aware of this problem and had commissioned research.

Legislative Policy

Hargreaves

“Could it be true that laws designed more than three centuries ago with the express purpose of creating economic incentives for innovation by protecting creators’ rights are today obstructing innovation and economic growth?”

The short answer was “yes”.

Legislative Policy

Hargreaves published Digital Opportunity - A Review of Intellectual Property and Growth in May 2011.

On pages 8 and 9 of his report he made 10 recommendations all of which were accepted by HMG.

Most concerned copyright but there were some on patents and IP generally,

Legislative Policy

Hargreaves Recommendation #1

Policy should be evidence based:“Government should ensure that development of the IP System is driven as far as possible by objective evidence.”

Legislative Policy

Hargreaves Recommendation #2

The UK should pursue its international interests and in particular it 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"

Legislative Policy

Hargreaves Recommendation #6

As part of his recommendation to clear application backlogs which contributed to “patent thickets” Hargreaves urged the UK to "take a leading role in promoting international efforts to cut backlogs and manage the boom in patent applications by further extending 'work sharing' with patent offices in other countries."

Legislative Policy

Hargreaves made no specific recommendation on design beyond carrying out research in recommendation #7 as he considered the role of IP in supporting the design industry had been neglected. He did not recommend criminal sanctions for design infringement or any of the other provisions of Part I of the Act.

Legislative Policy

IPO created policy with ● Call for Evidence in Sept 2011● IPO Assessment in Dec 2011● Consultation on changes to design law 24 July

2012 which included proposal for criminal sanctions for design infringement

● Proposal opposed by IP Bar, Chartered Institute of Patent Attorneys, Licensing Executives Society and Sir Robin Jacob and other academics

Legislative Policy

● Supported by ACID, Institute of Trade Mark Attorneys and other groups

● HMG introduced legislative proposals in April 2012

● Lord Younger introduced Bill into Lords on 10 May 2013

● Criminal sanctions were the only controversial provision

● Bill received royal assent on 14 May 2014

Further Information

Jane Lambert4-5 Gray’s Inn SquareLondonWC1R 5AHDX 1029 LDEjlambert@4-5.co.uk020 7404 5252

S.13 - Criminal Liability

S.13 inserts a new s.35ZA into the Registered Designs Act 1949 which creates a new offence of unauthorized copying of a registered design in course of business.

It is the first time there have been criminal sanctions for registered design infringement even though there has been a system of design registration in England and Wales since the Designs Act 1839.

S.13 - Criminal Liability

Up to 31 July 1988 there were criminal sanctions for infringing copyright in a design drawing by making articles to the design under s.21 of the Copyright Act 1956 although prosecutions were rare.

S.13 - Criminal Liability

Art 61 TRIPS provides:

“Members shall provide for criminal procedures and penalties to be applied at least in cases of wilful trademark counterfeiting or copyright piracy on a commercial scale.”

There is no obligation to extend criminal liability to other IP infringements though WTO member states may do so if they so wish.

S.13 - Criminal Liability

In the UK there are offences under:● s.92 Trade Marks Act 1994 (counterfeiting)● s.107 Copyright Designs and Patents Act 1988

(CDPA) (copyright piracy)● s.198 CDPA (bootlegging)● s.296ZB CDPA circumventing technical

measures● s.297 CDPA receives encoded programmes● s.297 CDPA dealing in decoders

S.13 - Criminal LiabilityS.35ZA creates two new offences:● making a product by intentionally copying a

registered design exactly or almost exactly to the design under s.35ZA (1); and

● offering, putting on the market, importing, exporting, stocking or using such a product under s.35ZA (3).

Both acts have to be carried out in the course of a business, the defendant must know or have reason to believe the design to be registered and without consent of the registered proprietor.

S.13 - Criminal Liability

Defences:● It is a defence for a person charged with an

offence under this section to show that the person reasonably believed that the registration of the design was invalid (s.35ZA (4));

● (5)It is also a defence for a person charged with an offence under this section to show that the person (a) did not infringe the right in the design, or (b) reasonably believed that the person did not do so (s.35ZA (5)),

S.13 - Criminal Liability

Distinct Aspects● copying must be intentional rather than merely

reckless● recklessness may be relevant to the

reasonableness of the Defendant’s belief for the defence in s.35ZA (5)

● the copying must be in the course of a business and subsection (6) provides that does not include a purpose that is merely incidental to the course of a business

S.13 - Criminal Liability

● the act must be without the consent to the registered proprietor.

The circumstances in which the proprietor’s consent might be relevant would be where goods are imported from a third country where they were made and sold lawfully.

S.13 - Criminal Liability

In R v Johnstone [2003] HL 28 the House of Lords held that an offence under s.92 of the Trade Mark Act 1994 must also be an infringement under s.10. The defences under s.35ZA (4) and (5) suggest that that the same must be true of registered designs.

The converse is not true. The Registered Designs Act 1949 confers a monopoly which can be infringed without copying. Thus not every infringement will be an offence.

S.13 - Criminal Liability

Art 6 ECHRIn Johnstone the House of Lords held that imposing the burden of proof of reasonable belief was compatible with art 6 of the Convention.

It is not yet clear that that will be the case under s.35ZA so it may be possible for a challenge to be made under the Convention.

S.13 - Criminal Liability

Both s.35ZA (4) and (5) (b) provide a defence where the Defendant can show that he reasonably believed that a registration was invalid or that he did not infringe the right in the registered design.

It is not enough for the belief to be honest. It must also be reasonable (Essex Trading Standards v Singh [2009] EWHC 520 (Admin).

Nor is good faith enough (R v McCrudden [2005] EWCA Crim 466).

S.13 - Criminal Liability

The belief must be reasonable having regard to objective factors (R v Malik [2011] EWCA 1107).

S.13 - Criminal Liability

SentencingThe maximum penalty for offences under the Copyright, Designs and Patents Act 1988 and the Trade Marks Act 1994 was increased from 2 to 10 years by s.1 of The Copyright, etc. and Trade Marks (Offences and Enforcement) Act 2002.

In R v Khan [2013] EWCA Crim 802 the CA took the following factors into account the difficulty of detection, deterrence, profit and other factors.

Further Information

Alexander Rozycki4-5 Gray’s Inn SquareLondonWC1R 5AHDX 1029 LDEarozycki@4-5.co.uk020 7404 5252

Practical Consequences

● Implementation of the Unified Patent Court will greatly reduce the cost of dispute resolution throughout the EU but particularly in common law jurisdictions such as England and Wales where costs are considerably higher than in civil law countries.

● Information sharing with other patent offices should reduce costs and delays of processing patent applications.

Practical Consequences

● Accession to the Hague Agreement should reduce the cost of design protection particularly as more and more countries accede to the agreement.

● The amendments to s.74A and s.74B of the Patents Act 1977 and the establishment of an opinions service for designs should reduce the cost of dispute resolution and make it easier to obtain IP insurance.

Practical Consequences

● The possibility of appeals to an Appointed Person in registered and unregistered design cases should reduce the cost of proceedings in the Designs Registry.

● The amendments to Part III of the Copyright Designs and Patents Act 1988 and the Registered Designs Act 1949 have simplified and harmonized design law slightly.

Practical Consequences

● Necessary to review standard contracts and terms of business of design agencies and businesses that commission design services.

● According to the Impact Report the government expects about 4 prosecutions a year for intentional copying of registered designs. This could stimulate a surge in invalidity applications and threats actions.

Further Information

Jane Lambert4-5 Gray’s Inn SquareLondonWC1R 5AHDX 1029 LDEjlambert@4-5.co.uk020 7404 5252