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New IP laws introduce criminal offence for design rights infringement

Out-Law News | 16 May 2014 | 3:08 pm | 3 min. read

Infringers of registered designs could face up to 10 years in prison under new UK laws that could come into force as soon as October.

The Intellectual Property Act, which received Royal Assent earlier this week, will introduce a new criminal offence for intentional unauthorised copying of either UK or Community registered designs.

Under the Act, it is a criminal offence to intentionally copy, without the permission of the rights holder, a registered design "in the course of a business ... so as to make a product exactly to that design, or with features that differ only in immaterial details from that design" where the infringer knows, or has reason to believe, that the design they have copied is a registered design.

It is also a criminal offence to put on the market, import, export, use, or stock for one of those purposes, an intentionally copied registered design without permission where the infringer knows, or has reason to believe, the design they have copied is registered. Use of such a copied design "for a purpose which is merely incidental to the carrying on of the business" will not be deemed a criminal offence under the new laws.

Those charged with criminal infringement can defend against those claims if they can show they "reasonably believed that the registration of the design was invalid" or that they have either not infringed the right in the design or "reasonably believed" they did not do so.

Intellectual property law expert Leila Panesar of Pinsent Masons, the law firm behind Out-Law.com, said: "The new provisions attempt to give more 'teeth' to the law of registered designs, which may well deter potential infringers from outright copying. The 'knowledge' requirement and the requirement for copying to be 'intentional' are sensible as otherwise the provisions would be too stringent and would probably deter the production of new, innovative designs. The provisions relating to stocking and putting copied registered designs on the market will no doubt encourage retailers to require more information from external designers as to their design process."

"Given the complexity of the law relating to registered designs, it is unlikely that designers, especially smaller designers lacking in resources, will want to risk criminal infringement proceedings on the basis of the defences relating to invalidity and non-infringement. The new provisions may therefore lead to a more careful approach by designers and more importance being placed on comprehensive searches of the design registers at the start of the design process," she said.

The new criminal offences do not extend to unregistered design rights. The new Act, however, has created a new exception to unregistered design rights infringement which allows for private, non-commercial use of an unregistered design to take place without that activity constituting civil infringement of the unregistered design owners' rights.

The Act also contains provisions which will allow the UK government to introduce separate new rules to establish and recognise the jurisdiction of new unified patent courts that have been proposed across much of the EU.

A new exemption to freedom of information laws has also be introduced with the passing of the Act and impacts on university research.

Under the Act, "information obtained in the course of, or derived from, a programme of research" would be considered exempt from disclosure under the Freedom of Information Act under certain conditions.

The exception would apply if the research programme "is continuing with a view to the publication ... of a report of the research", regardless of whether that would include "a statement" of the information that has been request under FOI and if pre-publication disclosure would, or would be likely to, "prejudice the [research] programme, the interests of any individual participating in the programme, the interests of the authority which holds the information, or the interests of [another public authority involved in the research programme but which does not itself hold the information sought]".

Intellectual property law and life sciences expert Seona Burnett of Pinsent Masons previously said that the exception would be welcomed by businesses that often partner with universities to fund research.

Minister for intellectual property, Lord Younger said: "Continued investment in intellectual property is vital to all businesses, as it contributes £16 billion to the UK economy each year. It is essential that we continue to work hard to create the right environment for them to flourish so we can benefit from their creative designs, inventions and ideas. I am confident that this Act will further strengthen our world-class IP system – from research to market – and to help businesses of all sizes continue to thrive."

Secondary legislation is required to be passed to implement the measures included in the new Act. The UK government said that it expects to that the new measures will come into force from October this year, with the final measures implemented before the end of 2015.