Proposed redesign of Australia’s designs law

IP Australia is proposing to extend the Australian design rights system to protect virtual designs such as iPhone’s swipe-to-unlock design, in-game fashion items in Fortnite, or avatars created for virtual reality experiences. It is also proposing to expand protection to partial designs (part of a product that is made in one piece) and to make changes relating to how incremental designs (designs that evolve during the design process) are protected.

IP Australia is calling for feedback on these proposals by 8 August 2023.

This Insight will provide an overview of the design law issues being considered by IP Australia, how these issues impact your business, and will consider IP Australia’s proposed changes to designs law. 

A summary of the problems IP Australia is attempting to address, their proposals and the issues they raise is available here.

IP Australia’s consultation on potential new design rights

IP Australia is requesting feedback on three specific topics:

• VIRTUAL DESIGNS — the protection of non-physical and active-state designs including screen displays, screen icons and graphical user interfaces (GUIs)
• PARTIAL DESIGNS — the protection of only part of a product that is made in one piece and
• INCREMENTAL DESIGNS — the protection of designs as they evolve during the design process.

As part of its consultation process, IP Australia has published three separate papers that provide an overview of the issues involved in each of these areas, as well as their proposals for reform.

The current law

Under current Australian designs law, virtual designs are unlikely to meet the legislative requirements for a registered design to be certified, meaning that a registered design for virtual features only would have a low probability of being enforceable. This has been a source of controversy for decades. The Swinburne Report digs down into the complex history and details of this controversy (see pages 8-13) but it essentially comes down to the fact that under current Australian designs law:

• design rights are tied to a physical product
• transient features, such as a GUI only appearing on a mobile phone display screen when switched on, are not treated as visual features of a physical product and
• there is no express reference to ‘virtual designs’ in the definitions of ‘product’ or ‘design’ in the Designs Act 2003 (Cth). As IP Australia states:

[r]egistration of ‘display screens’ with user interfaces is allowed, but at certification, most of the visual features are disregarded, leading to refusal.

The current law leads to uncertainty for Australian and international businesses seeking protection in Australia for their virtual designs and arguably discourages investment into digital design in Australia.

IP Australia’s proposal

IP Australia proposes numerous changes to the law to extend design rights protection to virtual designs:

• Adding virtual products to the definition of ‘product’ in the Designs Act and defining a ‘virtual product’ as ‘an intangible thing, the use of which results in the display of visual features through electronic means’. This, IP Australia says, could include GUIs, icons, screensavers, and products in virtual reality. Physical and composite products would be separate categories to virtual products.
• Amending the definition of a ‘visual feature’ to explicitly include ‘visual features that appear for a limited time when the product is used in its normal way.’
• Updating the way products are identified in the design application process. IP Australia suggests that the current requirement that design applications identify the product(s) each design is for, so that the product(s) can be classified in accordance with the Locarno Agreement, is unlikely to be sufficient for virtual designs. IP Australia suggests that designs law be updated so ‘that any product in a design application must be identified clearly so that a familiar person can determine the product’s nature and intended use.’ Designs would then be classified appropriately by the Registrar.
• Allowing virtual design applicants to choose the means they employ to file the representation of the virtual design that is required to indicate the visual features that appear in an active state they wish to protect, for example by using a written statement alongside photographs, numerical sequences, or various representations showing the visual features of a dynamic product at different times.
  
• Introduce a new ‘clarity requirement’ for all registered designs that will form part of the Registrar’s formalities check. For virtual designs, IP Australia suggests that the scope of protection sought must be clear to the familiar person considering the representations, any written statement, numerical sequence, or other indicator of how the dynamic product evolves.
• Applying the existing criteria for newness and distinctiveness to virtual design applications.
• Clarifying when a virtual product is ‘being made’ since a registered design is currently ‘primarily’ infringed by the making of a product. Specifically, IP Australia suggests that a virtual product could be ‘made’ by writing and compiling source code that results in a program that, when run, produces relevant visual features.
• Clarifying that ‘primary infringement’ would exclude the making of a virtual product by merely reproducing the means to cause the display of the visual features. For example, copying or downloading the source or object code of a computer program or GUI for an app from a distributor’s website to a product user’s computer would be excluded from primary infringement.
• Clarifying that ‘secondary infringement’ of registered virtual designs should work in the same way as for registered designs for physical products, except that infringement would not extend to reasonable use of virtual products for legitimate purposes. Legitimate purposes would include study, correcting errors, making of interoperable products, back-ups, testing, research, criticism, and review.

Impact & issues

As IP Australia acknowledges, these proposals raise issues regarding the Copyright Act and Designs Act overlap provisions since many virtual designs will qualify as ‘artistic works’ that may be protected under the Copyright Act. They are interested to receive feedback on this aspect of the proposed laws and how the introduction of protection for virtual designs could potentially raise uncertainties, administrative burdens, or other unintended consequences.

Currently in Australia, a 3-dimensional design loses copyright protection when registered or if it is ‘industrially applied’, including if more than 50 copies of an article are made. As IP Australia notes in its paper, it is unclear whether virtual designs that have 3-dimensional features would be affected by the overlap provisions.  It is also unclear how the concept of ‘applied industrially’ would be interpreted in relation to virtual designs. 

Other issues that these proposals raise include:

• Would these proposals laws make the process of design applications and enforcement more or less costly, more or less complex and difficult, more or less efficient?
• Are these proposals adequately technology-neutral?
• What types of virtual designs should or should not be considered for inclusion in this new regime? Fonts? Holograms? Digital art? AI-generated virtual products?
• Would these new proposed protections have a significant impact in practice on the unlawful copying and use of virtual design assets? Do they provide businesses enough protection from being ‘ripped off’?
• Would businesses be more likely to act against third parties that infringe virtual design rights if these proposals were enacted?
• Could virtual design rights actually stifle digital innovation, particularly given the speed of the cycle of improvement in the virtual design space?
• Does the prevalence of widely-used design templates and libraries make the whole idea of virtual design rights moot due to the minor degrees of difference in these virtual products?
• Would virtual design rights protection encourage more investment in the development of virtual designs in practice?
• Would the enactment of virtual design rights allow for the misuse by malicious and/or well-resourced entities, who might take out design registrations with a view to suppressing competition? How could such misuse be prevented?

Expanding design rights to partial designs

The ability to claim legal protection for part of a commercial product, such as the handle of a mug, a leg of a chair, or the bristles on a paint brush, is currently available in many jurisdictions around the world, such as the US, EU, UK, Japan, Korea, Singapore, Canada, and, since 2021, China.  

However, Australia does not currently provide design protection for part of a product.

The current law

Under the Designs Act, only the overall appearance of the product resulting from one or more visual features of the product made in one piece is entitled to design protection.

This means that businesses seeking design protection in Australia currently need to register multiple designs in order to cover the multiple ways one part of a product can be incorporated into related versions of that product, such as a stylised handle of a cup that can also be incorporated into a mug, jug, decanter, or beer stein. This is clearly more expensive, less efficient, and is a disincentive for businesses seeking legal protection in Australia for their products.

IP Australia’s proposal

IP Australia is now proposing to expand the current definition of a ‘design’ in section 5 of the Designs Act to include a ‘partial design’ that would be defined as ‘the overall appearance of a part of a product.’ This would include parts of virtual products as well, if virtual designs were to be recognised under the Designs Act.

IP Australia also proposes that for a ‘partial design’ to be protected as a registered design, the ‘partial design’ must be embodied in a product and other specified products. They make it clear in their proposal that this would not provide protection for every possible product on which a ‘partial design’ may be included, just those products specified in the registered design.

IP Australia also proposes that ‘common designs’ be abolished. Common designs are those designs that relate to more than one product, which can be in more than one Locarno class.

Companies who use partial design features across multiple products should consider IP Australia’s proposals in relation to partial designs and determine whether the proposals offer a practical pathway to protection for their partial designs. 

Impact & issues

These proposals raise issues for both the design application process and post-registration actions that should be considered by businesses when assessing these proposals. These issues include:

• What is the best way to indicate a ‘partial design’ visually and/or in writing?
• Do we need a new ‘clarity requirement’ to specify the scope of protection for a partial design, and for that matter, all designs? How should we define ‘clarity’, e.g. should it be clear to a familiar person, or should it be clear to a reasonable person, a reasonable consumer, or an expert? What should be involved in the practical process the Register uses to assess the clarity of a design?
• Is it desirable to abolish common designs? Would abolishing the concept make the system more or less confusing in the future?
• Do we need to update how ‘products’ are identified? IP Australia’s recommends that we need to update the ‘product’ identification process if virtual designs are enacted. They also say that our current level of identifying products is unlikely to suffice for partial designs, since they believe that the similarity of a partial design’s product(s) to other products should affect whether the partial design is validly registered or has been infringed. How would this impact the way the system currently treats design applications for multiple products?
• Should we assess the ‘newness and distinctiveness’ of a ‘partial design’ differently to how we currently assess designs? Should we then abolish statements of newness and distinctiveness?
• What counts as an infringement of a registered ‘partial design’?
• How should copyright law and the overlap provisions in the Copyright Act and Designs Act be applied to a ‘partial design’?

Further expanding design rights to incremental designs

The current law

Designers have long complained that under the current Australian design rights system they face uncertainty about what to do when they come up with an early form of their design: file immediately, wait until they have reached a final form, or file immediately and later file further applications as their design evolves (if that is even possible given their first immediate filing). The current system provides little flexibility and ignores the practical and commercial realities of the design process.

Some jurisdictions around the world avoid this issue by allowing designers to defer the publication of their designs. As the Final Report of the Review of the Designs System by the now-defunct Australian Council of Intellectual Property (ACIP) noted in 2015:

This enables applicants to obtain a priority date, but without having their design made available to the public. Deferral of publication allows the designer to keep new designs confidential until they are ready to launch in the market.

This led to ACIP recommending the removal of immediate publication without registering a design, the option of deferral of publication to 6 months after filing, and introducing a grace period before the filing date of a registered design. These changes were introduced in the Designs Amendment (Advisory Council on Intellectual Property Response) Act 2021 (Cth) and commenced in March 2022.

IP Australia’s proposal

IP Australia now proposes two further reforms to provide designers with more flexibility:

• provide designers an option to file a low-cost ‘preliminary application’ for a design and within 6 months, file the ‘main application’. The main application can include incremental changes made to the preliminary design and
• provide designers with an option to link a subsequent incremental design to the earlier registered main design, ensuring the earlier main design could not make the subsequent design unregistrable. 

Impact & issues

Do these proposals go far enough for businesses, or do they go too far? Should Australia instead simply allow designers to defer the publication of their designs, in line with other jurisdictions?  Does the concept of linking iterative designs make the system more or less complex, more or less expensive, more or less efficient?

What next?

Many people and businesses across Australia will have strong opinions on whether IP Australia’s proposals offer practical improvements to the Designs System and this is the time for your voice to be heard. Written submissions to IP Australia close on 8 August 2023, as does a survey that individuals and businesses are asked to complete here.

Once submissions close, IP Australia will review all the feedback it receives and then refine their proposals based on that feedback. It will then report the outcomes of this consultation to the Federal Government which will decide whether to proceed with legislation or further consultation.

Contact a member of KWM's IP team if you would like to discuss IP Australia’s proposals or need assistance in drafting a written submission. 

The proposed redesign of Australia’s designs law