§ 5.38 p.m.
§ Lord Sainsbury of Turville rose to move, That the draft regulations laid before the House on 10th July be approved [6th Report from the Joint Committee].
§ The noble Lord said: My Lords, the purpose of these regulations is to implement European Directive 98/71/EC on the legal protection of designs into United Kingdom law. This directive has had a long history. A Green Paper in June 1991 led to the first proposal for a directive in 1993, which was finally adopted in 1998. Throughout that time, and afterwards in preparing these regulations, the Department of Trade and Industry was in consultation with designers, manufacturers of consumer products and others who will be affected.
§ The appearance of a product can make the difference between success and failure of even the most functional of items. Good design is becoming ever more important in marketing a new range. The IJK has recognised the importance of protecting the investment of designers by protecting their designs from copying since the 18th century. The need to protect designs is recognised by several international treaties, most notably the Paris Convention of 1883 1137 and the TRIPS Agreement. However, the actual extent and effect of protection of designs is probably the least harmonised of intellectual property laws across the world.
§ Harmonisation of laws helps businesses plan their activities with more certainty. Designers cannot understand why their design might be protectable in some countries but not in others. Similarly, their competitors may be faced with determining whether rights which have been registered in different countries are actually all valid.
§ The individual assessment of the legal position which applies in different parts of Europe's internal market is unnecessarily time-consuming and expensive, particularly for small businesses which do not have their own legal departments. It can put designers off applying for protection, or put a manufacturer off launching a product in case it cannot be marketed across the whole Community.
§ The Commission and member states have sought to find the most appropriate protection for the benefit of Europe, recognising the investment made by designers and the need for fair competition for the benefit of consumers. Much of what the directive requires is similar to the protection already provided by the Registered Designs Act. There are, however, a few differences that are particularly significant: first, protection will be for the design itself, rather than a particular article bearing the design. This makes little difference when the design is the product itself but makes protection much simpler for designers of ornamentation—a floral pattern perhaps—which can be applied to many different types of product. Secondly, protection is extended to handicraft and one-off items. Up until now we have only protected designs applied to articles by an industrial process.
§ Thirdly, the protection offered by registration is improved. It gives the owner the sole right to use any design which gives the same overall impression as the design which he has registered. Until now, competitors have sometimes been able to sidestep the protection by making relatively minor changes to the design.
§ Fourthly, the quid pro quo for this is that the test to gain protection becomes conversely stiffer. Protection is only available if the design is both new and gives a "different overall impression" from earlier designs. Previously a design could be registered as long as it differed in a material detail.
§ Finally, in the past designs have had to be absolutely new to be registered. Almost any public disclosure before filing an application at the Patent Office meant that a registration would be invalid. The directive introduces a 12-month "grace period" where a designer can show and use his design in public to test the market and gain backing without prejudice to his right to apply for protection.
§ I must finally mention the significant area that this directive does not harmonise. That was one of the major reasons why it took so long to negotiate. Member states and the European Parliament could not agree on how to treat products which can be used 1138 as spare parts for complex products and have to match the original part to perform a satisfactory repair—car body panels and light clusters, for example.
§ The UK excluded such parts from registration in 1988 after it was found that some original manufacturers were using intellectual property rights to the detriment of consumers to maintain a monopoly on spare parts. Other member states allow full protection. It was finally agreed that it was important to bring the parts of the directive which could be agreed into force as soon as possible. The Commission would continue to review this area, to report in 2004 and make a further proposal in 2005. In the meantime, member states would keep their existing laws regarding the use of such parts for repair purposes. The UK's law presently excludes such designs from registration, meaning that they lack protection from others using them in original products as well as for repair purposes. The directive allows us the option of retaining this position. However, consultation with independent spare parts manufacturers concluded that that was not appropriate. The regulations allow registration of such designs, but the rights cannot be enforced against those producing, selling or using the products as spare parts. That is consistent with the interim solution which has been agreed for the forthcoming equivalent Community-wide right, the regulation for which should be adopted soon.
§ It is the practice for a Minister inviting Parliament to approve a draft statutory instrument to volunteer a view regarding its compatibility with the convention rights as defined in Section 1 of the Human Rights Act 1998. In my view, the provisions of the draft regulations are compatible with the convention rights. I commend these draft regulations to the House. I beg to move.
§ Moved, That the draft regulations laid before the House on 10th July be approved [6th Report from the Joint Committee].—(Lord Sainsbury of Turville.)
§ Lord Rotherwick
My Lords, this is an uncontroversial regulation which serves, in these days of global commerce, to make sure that throughout the EC registered designs are treated in the same way.
Registration of designs protects businesses from having their goods and logos copied by unscrupulous pirates who produce cheap and usually inferior copies of high value or well-known products.
The regulation is in compliance with an EC directive. I trust that when the directive becomes fully operational by the end of this month our European partners will be as assiduous as the UK will undoubtedly be in ensuring that it is fully complied with.
We support the Motion to approve the regulations.
§ Lord Razzall
My Lords, we also support the Government in bringing in these regulations. The noble Lord, Lord Rotherwick, indicated that the regulations are non-controversial. They may be non-controversial but they are clearly complex. The regulations are brought in under EU Directive 98/71, 1139 a 1998 directive. Perhaps the Minister will confirm that the Government have until Sunday to ensure that UK laws are consistent with that directive. Therefore, by any stretch of the imagination, the Government are leaving it fairly late.
I raise two points of detail for the Minister and make two general points. As the noble Lord indicated, the test for novelty will now change. The current position for registered designs is that one cannot register one's design in the UK if it is known anywhere else in the UK. Under these regulations that restriction will apply to it being known anywhere in the world. I should be interested to hear the Government's perspective on how that requirement will be enforced. It is obviously a particular concern of SMEs, which the Government are trying to encourage in this area, to discover how they can become aware of the fact that their design is known anywhere else in the world as opposed to solely in the UK.
The second point of detail is that the regulations introduce a test for individual character. In other words, while a design-seeking registration may differ from others, the question will have to be asked whether it differs enough. The test will be undertaken by an informed user or one who is familiar with the products in question. That is clearly a fairly subjective test. I should be interested to hear from the Minister how that will be enforced. That again will be of concern particularly to the SMEs which do not employ a myriad of advisers on these kinds of subjects.
I raise finally two general points. One is with regard to the European directive in general. It is not designed to ensure that people registering their designs will have automatic protection across EU states. There will in due course be a Community design directive that will give the owners of registered designs automatic protection across the EU. Can the Minister give any indication as to the timing of that directive and whether the Government have a negotiating position they would be interested in drawing to the attention of this House?
My final point is that these proposals are extremely important for the small and medium-sized enterprise areas. The Government clearly have a policy in the DTI of encouraging the SMEs in particular to develop their intellectual property rights and to stress the importance of those rights for small businesses. I know that some correspondence has taken place with Melanie Johnson, the Minister in another place, regarding what the DTI is doing to increase the knowledge of intellectual property rights, particularly among the SMEs. I should be grateful if the Minister can give me some comfort that that campaign is continuing.
§ Lord Sainsbury of Turville
My Lords, the noble Lord, Lord Razzall, is quite right to point out that the regulations should be brought into force on 28th October. They will be brought in on 9th December. The reason for the delay is that users of the system who are aware of the effects of the 1140 regulations have asked for notice before they are brought into force. They need a short delay to provide time for them to notify partners and clients.
It has taken an extremely long time to turn the directive into legislation, for the very reasons pointed out by the noble Lord. Some aspects of the regulations break new ground. It has proved quite difficult to find a form of wording which makes the position clear. Indeed, the problem was finally solved when a certain amount of copy was taken from the directive and put directly into the legislation.
We regard this legislation as important because it relates to SMEs and we shall continue to campaign to help such enterprises in a number of ways, in particular with regard to intellectual property rights. As regards the question of novelty worldwide, that is for the courts to decide. The restriction is similar to that which has been applied for many years in the field of patents. Occasions can arise when worldwide novelty may be extremely difficult to establish.
Agreement has been reached in the EU Council on Community design legislation, which will give Community-wide protection. Those regulations will be adopted shortly. On the question of individual character, again this is very similar to a well-known concept used in patent law; namely, the inventive step. We are sure that the courts will have little difficulty in assessing whether the same overall impression is made. Again, this is a new concept, but it should prove to be manageable.
Designers across the United Kingdom and the rest of Europe are looking forward to the simplification and new opportunities offered by this harmonisation directive. It represents the result of many years of consultation and negotiation. I commend the regulations implementing the directive to the House.
§ On Question, Motion agreed to.