TMT legal update: What impact will the Intellectual Property Act 2014 have on your business?

• Intellectual property
• Technology, Media and Telecoms

18-06-2014

Précis:

The Intellectual Property Act 2014 (the “Act”) seeks to implement the recommendations of the Hargreaves Review of Intellectual Property and Growth 2011 with particular focus on the reformation of patent and design law. The Act is scheduled to come into force from October 2014 and it is expected that all measures should be implemented by late 2015. 

What?           

The Act makes fundamental changes to UK design and patent law:

Patent law:

The Act will enable the UK to implement the Unitary Patent Court Agreement (the “UPCA”). The UPCA makes way for the introduction of the Unitary Patent (“UP”), a single patent that will have effect in 25 (of the 28) Member States of the European Union,  and the Unified Patent Court (“UPC”) to handle disputes concerning the UP. The introduction of the UP aims to streamline the procedure for obtaining patent protection across the Member States of the European Union and to make such procedures more cost effective. The UPC will simplify the resolution of disputes and third party challenges, requiring only one action to determine disputes that could potentially concern multiple jurisdictions within the European Union.

The Act allows the UK Intellectual Property Office (“IPO”) to send more UK patent information to other global patent offices on a confidential basis. The aim of this is to speed up the patent granting process by avoiding the duplication of work. Any reduction in the time it takes to grant a patent is an obvious bonus for businesses and enables them to bring new products to market much faster.

Under current law, in order to put a third party on notice of a patent and deprive them of the “innocence” defence to an infringement claim patented products must be marked with the relevant numbers of all UK patents protecting that product. The Act eases this burden slightly and enables businesses to simply provide a web address on that product which third parties can access to find out the patent details relating to that product.

The Act also reforms the Patents Opinions Service (“POS”). The POS allows third parties to request an opinion from the IPO in respect of patent queries. The opinion is non-binding but is nonetheless a useful tool. Under current law if the IPO gave an opinion that an existing patent is invalid it falls to a third party to initiate revocation proceedings which are often costly and lengthy proceedings. The Act allows the IPO to, in very clear cut cases, start the revocation proceedings on behalf of the third party. The amendments to the POS will likely not sit favourably with those parties already holding numerous patents as they may be easier to challenge under the Act. However, the IPO’s opinion can be challenged or the claims of the patent can be amended to overcome the opinion. The biggest beneficiaries of the changes to the POS in the Act will be those third parties that have been kept out of the market by invalid patents but that do not have the resources to challenge those same patents.

Design law:

The Act will allow for the UK to accede to the Hague Agreement concerning the International Registration of Industrial Designs (the “Hague Agreement”). The Hague Agreement is an International Design Registration System (the “IDRS”) which enables applicants to obtain protection and register their design in multiple countries by making a single application and paying a single fee. The IDRS can significantly reduce costs for applicants by removing the need for multiple translations and legal representation in several different jurisdictions.

The Act introduces a new Designs Opinion Service (“DOS”) which will operate in a similar way to the existing POS. The DOS will permit the IPO to provide a low cost, non-binding and impartial view on potential design disputes. Although non-binding, DOS will offer some helpful guidance which may serve to direct potential claims or assist settlement proceedings.

The Act harmonises UK design law with that of the EU, changing the default owner of a design from the commissioner of the design (under current law) to the commissioned designer (as per EU law). Good practice dictates that commissioners of designs should ensure ownership of those designs is transferred to them by the designer, the changes introduced by the Act simply increase the importance of doing so. It should be noted that these changes will not affect the standard position whereby employers own the rights to any design that an employee produces as part of their job and under the terms of their employment contract.

One of the most controversial changes the Act introduces is the criminalisation of the offence of deliberately copying a registered design. The protection offered to registered designs under the Act is similar to the current protection offered to copyright and trade marks. Whilst controversial, the Act does include some safeguards, in that the copying must be blatant and deliberate, and an offending party will have a defence if they reasonably believed they were not infringing the design.

The Act also makes a number of changes in respect of defences and exceptions to the use of registered and unregistered designs: the defence to an offence of infringement of UK artistic copyright for those parties having permission to use a corresponding UK registered design has been extended to registered community designs; a new defence to the infringement of designs has been introduced where use of the design is for private, experimental or teaching purposes only; and third parties that are using an unregistered design in good faith will be allowed to continue to use that design should it be subsequently registered by another party and will be able to do so without fear of infringing the new registered design.

The criteria and qualification to determine whether a design enjoys the benefits of an unregistered design right have been greatly simplified so as to clarify which aspects of the design are covered. The Act also changes the definition of a qualifying person (which enables them to own a design right) to include individuals and companies who normally reside or have a place of business in a qualifying country.

So what?  

Most of the changes in the Act seek to make the handling of patents and designs, whether that be the granting, enforcement, challenging or some other consideration of them, simpler, faster and more cost effective. Some of these simple steps will have an immediate and obvious effect. However, we will have to wait and see what impact some of the more substantial new provisions have as they are rolled out over the course of the next year or so.