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Govt's twiddles with design and patent law raise industry fears

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Changes to UK patent and design law affecting thousands of British businesses have been criticised by industry and Labour's front bench business team.

The Intellectual Property Bill contains changes to design and patent law proposed in the so-called Google Review, better known as "The Independent Review of IP and Growth” by Professor Ian Hargreaves. These intangible rights are vital to a range of UK industries, ranging from high value manufacturing to fashion.

The tweaks, packaged into what David Willetts, the minister of state for universities and science, called a "small but perfectly small bill" were supposed to be relatively uncontroversial.

In particular, functional designs protect the classic, clever "Better Mousetrap" innovations which might not be covered by a patent, but which are still essential to the UK's high-value manufacturing sector. Industry says some changes make offshoring more likely.

What's in the Bill?

Although the bill puts in place the UK law necessary to implement the European Unified Patent Court, much of it is about design. Unlike copyright, protection for designs and inventions is not automatic, and requires formal registration. Many designers and inventors are solo operators or very small businesses.

Copying is rife, and the law is a muddle. For example: how many people know that there are two classes of design protection in the UK? One for “registered designs”, and one for “un-registered designs”, called, um, a Design Right.

Each has a different scope of protection: you can sue in a criminal court for copying a Registered Design, but not an infringement of the unregistered Design Right.

While the IP Bill was supposed to clear up such inconsistencies, MPs yesterday criticised the government for missing the opportunity. Shadow business minister Iain Wright (Hartlepool, Lab) noted that the Government had consulted on the issue, been told to clear it up, but decided to leave it alone. It was extending criminal law to the Design Rights, but not the unregistered Design Right.

"It is as if the Government are saying, 'We like consistency in certain areas, but not in others',” said Wright, “which merely provides inconsistency by a different name. The measure is a new inconsistency, so it provides greater complexity and subsequent uncertainty to business."

Business Minister David Willets said that this is one part of the Bill on which he won't budge. Why? "It can be difficult, however, to track down information about unregistered design—such as who owns it and whether it is still protected," he pleaded.

In addition, "the UK unregistered right can protect functional designs, and where these are complex and highly technical, it could cause difficulties in criminal cases," added Willetts.

And worst of all, someone, somewhere might be unfairly accused of being a copycat, he said:

"If we think about the risks of injustice from criminal sanctions in cases where unregistered designs are involved—we have had a long consultation on that—we believe that we have got the balance correct in extending criminal protection to registered but not to unregistered designs."

So the government is clear. You might think you're Jony Ive, but you're still going to have register your designs just in case.

A number of organisations, including The IP Federation and the Law Society, oppose the extension of criminal law to registered designs, with the IPF arguing it's "a sledgehammer to crack a nut". The proposal encourages "design trolling" - raising the cost and risk for design rights holders.

"Larger organisations will have more capability for taking advantage of the criminal measures available and will, without doubt, use them to maximum advantage against other organisations, large and small," notes the Federation. The cases would be heard in a criminal court (expensive and risky) rather than a specialist court and in any case, the holder of registered design IP can already launch a criminal action.

Copycat markets

Labour also highlighted another part of the bill which has alarmed engineering companies. Stuff is now often designed in the UK and manufactured overseas. But some of these countries don't recognise the unregistered design right.

"Companies manufacturing in the UK for export to a country without the same level, extent, or duration of protection (i.e. most countries in the world) could easily find themselves in the position where the sale in the export territory or the possession of the product by the customer was not an infringement of any right of their Chinese, Japanese, Korean, or US competitors, but the manufacture in the UK is,” the IP Federation warned last year.

“The obvious way of avoiding the problem would be, if possible, to offshore the manufacture either to the customer country or to any other country where the manufacture could not be blocked," they added.

Other parts of the bill, which is still up for grabs as it moves to its parliamentary report stage, are less contentious. The bill makes the individual designer the first owner of an unregistered design. It absolves "unintentional" copiers of culpability, and "trivial features" will not be protected, although it is not clear why that needs to be written into law.

The bicycling Liberal Democrat Julian Huppert MP ("often greeted by a collective sigh before he talks in the chamber" - The Times ) has added an amendment for designs created during research. Quite what happens if academic researchers come up with a clever design they want to commercialise isn't clear. Maybe he thinks they shouldn't?

The bill will expand the non-binding Patents Opinion service and create a new one for Designs, too.

You can read the Bill text here, find background from the IPO on the changes here, and read Tuesday's very interesting Commons debate here.

The Bill now moves to the report stage where further changes can be made.®

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