Modernising IP law - the IP bill

Partner Will Cook from Marks & Clerk Solicitors comments

"In its current form, the new Bill will amend the Patents Act 1977 to give powers to bring the Unitary Patent Court Agreement into force in the UK, to establish the court's jurisdiction, provide for the payment of fees and make necessary changes to the Act so that it applies to the new unitary patent.  It shows that the UK government is actively preparing for the arrival of the new court: we seem to be ahead of the other European countries. 

“The court is still likely to come in 2015, but industry remains split on whether that is 20 years too soon or 20 years too late.  It will certainly raise the stakes of patent enforcement across Europe:  the new unitary patents will be enforceable, and revocable, across several countries in a single case in one court.  For inventors, that will be a good thing, for infringers a bad thing.  But things are not so simple:  the court will also provide opportunity for owners of weaker or questionable patents to put European manufacturers under great pressure:  the risk of a Europe-wide injunction prohibiting all manufacture and so all commercial activity.

“But the success of the court will depend on the details:  the rules of procedure, the selection of the judges and the training and oversight they get from the Court of Appeal.  None of those have been settled yet, and will not be until well into 2014 at the earliest."

Modernising IP law - the IP bill

The Intellectual Property Bill’s  main purpose is to modernise certain aspects of the law relating to intellectual property, making it clearer and more accessible. It is hoped that this will increase legal certainty for all.

The Bill makes amendments to, amongst others, the Copyright, Designs and Patents Act 1988, the Patents Act 1977 and the Registered Designs Act 1949.

Background

The UK Prime Minister commissioned the Hargreaves Review of Intellectual Property and Growth, which was published in May 2011. Following this, the Intellectual Property Office (IPO) started a programme to establish how to improve the current patents, designs and copyright framework. In summer 2012 the IPO launched various consultations with proposals to revise the current system. The measures in the Bill are a result of the work undertaken by the Intellectual Property Office following the Hargreaves Review.

We provide short explanations of the major Bill’s major proposals below:

Implementing the Unified Patent Court Agreement (UPCA

The Unitary Patent and the Unified Patent Court are now becoming a reality in Europe, and UK legislation is necessary for ratification of the UPC Agreement that was signed in February 2013. The effect of this new patent regime in Europe will be to introduce a unitary patent granted by the EPO that is effective over most of the EU, enforced by a new pan-European court system including an appeal court in Luxembourg, and regional and central divisions as the courts of first instance. The central division will be split between locations in Germany, France and the UK, with the UK branch responsible for biotechnical, pharmaceutical and chemical patents.

An aim of the new regime is to reduce the cost of obtaining and enforcing patents in Europe, partly by relaxing translation requirements and harmonising the law. National patents will however still be obtained and enforced independently.

The new Bill is subject to possible revision in its committee stages in Parliament, but in its current form at least it will amend the Patents Act 1977 to give powers to pass statutory instruments to collect fees, change court jurisdictions and make further statutory changes that are required for ratification of the UPCA. It is understood that, as part of the ratification process, a command paper will be put to Parliament for approval of the UPC Treaty. All this means that the UPC is unlikely to commence before late 2015.

Registered design right – Introduction of a new opinions service

The Bill proposes that the IPO will be able to provide a non-binding opinions service for registered designs. This service is similar to that which already exists for patents (see below). The opinions service will be able to provide opinions as to whether a UK registered design is valid or whether a UK registered design is infringed by a particular product. It will hence provide a relatively cheap way for a business to get an indication as to the likelihood of success of a registered design infringement or validity action before going to court. This measure may therefore help to avoid costly litigation.

The Bill also allows for the opinions service to be extended to include other design rights such as the UK unregistered design right in the future.

Registered design right – Criminal offence of unauthorised copying of a UK registered design in the course of business

Also proposed in the Bill is the criminalisation of deliberate copying, without permission, of a UK or Community registered design in the course of business. The offence will only apply to designs registered prior to the copying, not to those registered after the copying has taken place. In addition, reproducing a registered design unintentionally is not caught by the offence – consequently the offence will not apply if a defendant can show reasonable grounds for believing the registered design in question was invalid or that their product does not copy the registered design.

The proposed penalties the offence carries include a fine and/or a prison sentence of up to ten years.

Registered design right – Accession to the Hague Agreement

The Hague Agreement defines an international system for the registration of industrial designs. By using the Hague agreement it is possible to file a single design application which can result in registered design rights in any desired contracting state. The Bill proposes to make the UK a member of the Hague Agreement. This would make it possible for a person to file a Hague Agreement design application and obtain a UK registered design as well as registered design rights in any other country that has signed up to the Agreement. It is generally cheaper to obtain registered designs in a number of countries using the Hague Agreement than it is to obtain the same registered designs individually without using the Hague Agreement. It follows that a UK business seeking to obtain a registered design in the UK and at least one other country which is a member of the Hague Agreement will be able to reduce the cost of applying for the design registrations by using the Hague Agreement.

Registered design right – Right of prior use

The Bill introduces a limited defence for a person who in good faith uses a design that is subsequently registered by another person. This will allow the person acting in good faith to continue using the design according to preparations they have already made, without fear of the registered design holder being able to stop them at a later date and harm their investment. As with other provisions of the Bill, this provision standardises the law in relation to UK registered design right and that in relation to Community design right.

Registered design right – Revising the way in which information about registered designs is available

The bill proposes to enable documents associated with registered designs to be made available by the Intellectual Property Office electronically online. This should make it much easier for anyone to find out relevant information about a particular registered design.

Unregistered design right – Clarifying what is covered

The scope of what is covered by unregistered design right has been reduced. Previously, unregistered design right covered “the design of any aspect of the shape or configuration (whether internal or external) of the whole or part of an article”. It is thought that the phrase "any aspect" has resulted in the scope of unregistered design right as determined by the courts being overly broad resulting in uncertainty as to the scope of protection. Consequently this phrase has been removed.

To qualify for unregistered design right a design has to be original, i.e. not "commonplace" in the relevant design field. The meaning of "commonplace" is not defined in the statute (although case law has helped to define it). This has led to confusion as to the geographical extent of the term. The Bill removes any confusion by specifying the geographical extent of "commonplace" to include any country which is part of the European Union.

Unregistered design right – Exceptions

UK registered design right and Community design right both include exceptions to infringement, i.e. acts that can be carried out without infringing the respective design right. These include private acts, experiments and teaching. Currently unregistered design right does not have equivalent exceptions to infringement. The Bill proposes to give unregistered design right equivalent exceptions to infringement to those of UK registered design right and Community design right. For example, under the Bill a secondary school design teacher would be able to teach how to make an article which is covered by unregistered design right without infringing the design right.

Unregistered design right and registered design right – Clarifying ownership of the right

Currently, if a design is created in pursuit of a commission, the commissioner of the design is the owner of any registered or unregistered design right in the commissioned design. The Bill proposes to change this situation, bringing British law in line with equivalent EU law, such that the designer of a commissioned design will initially be entitled to unregistered design right or registered design right, and not the commissioner. This also brings UK design law in relation to the ownership of commissioned work into line with UK copyright law. This will make it even more important for companies to procure transfers of IPR from those it contracts with.

Sharing information on unpublished patent applications

At present, some basic information about national UK patent applications is already made available before they are officially published, which is usually about 18 months after the priority date. This information is provided routinely to the EPO and bibliographic information is given to other organisations, e.g. for database searching. The Bill extends this by obliging the UK IPO to send any other patent offices such information as they request, following a negotiated procedure between the offices, and subject to a confidentiality safeguard. The purpose is to exchange information between patent offices around the world, to help them coordinate the processing of patent applications. According to the IPO, this is will

… help clear backlogs and speed up clearance times. As a result, UK businesses who also apply for European, US and Japanese patents in addition to a UK patent, could increase the value of their patents by £4.2 million per annum.

IPO Opinions Service for Patents

The UKIPO already provides a quick and inexpensive alternative to full-blown patent litigation – non-binding opinions on the validity (relating to novelty and inventive step only) and infringement of patents. The opinions are available to anyone and are subject to review and appeal. The Bill gives this more teeth by allowing (not requiring) the IPO to revoke a patent that in its opinion is invalid – once the patentee has had the chance of submitting amendments and supportive arguments. This has caused some concern that patent owners with limited resources run the risk of losing their patents almost automatically, although the IPO has indicated that it would exercise its power to revoke only in clear cut cases. Nonetheless it may make the opinions service less attractive for patentees who could for example use a different form of Alternative Dispute Resolution – the IPO provides a mediation service – and failing that the Patents County Court or Patents Court.

Marking patented products

It is important to mark products with an indication of the patent(s) that protect them, to stop infringers denying knowledge and avoiding having to pay damages or an account of profits. Under Section 62 of the Patents Act 1977 it is necessary to give the patent number to avoid this risk, but the Bill relaxes this by giving effect to a marking with an Internet link to web content that connects the product to the patent number and is accessible free of charge.