With just over a month to go, the government has published in draft The Designs and International Trade Marks (Amendment etc) (EU Exit) Regulations 2019. One of the more difficult Brexit issues for IP rights is the treatment of unregistered design rights which are, of course, extremely valuable rights in a number of design-led industries. The government has proposed the creation of a 'supplementary unregistered design right' (SUDR) which will mirror the UCD, and therefore seek to plug the gap in protection that may otherwise arise (given that the UK's existing unregistered design right does not provide the same levels of protection).
However, concerns have been raised due to uncertainty in the EU over the existing disclosure requirements relating to UCDs, which may mean that businesses will need to consider taking steps to ensure simultaneous publication of their designs in the UK and the EU, or incur the expense of obtaining registered design protection, in both the EU and the UK.
This arises because there is an argument as to whether the Community Design Regulation requires a design to be 'first disclosed' in the EU for UCD to arise, or whether it is sufficient for the design to have been disclosed anywhere but so that, in the normal course of business, it could reasonably have become known to the circles specialised in the sector concerned, operating within the EU. The first interpretation (that there must be a first disclosure in the EU) has been the approach adopted in a German court decision, but there has been no decision of the European Court of Justice on the point. Given the uncertainty over the issue, non-EU designers have tended to ensure that they make their first disclosure in the EU so as to ensure that there is no argument over whether the UCD arises. This is particularly the case given that a first disclosure outside of the EU (and outside of the grace period) may destroy the novelty of a subsequent RCD design application.
The concern for UK based designers is therefore that, if they disclose their designs first in the UK, whilst they will be eligible for the SUDR, they will not be eligible for UCD protection in the EU, and may also destroy the novelty in any subsequent RCD application. But, if they disclose their design first in the EU, will this impact on their ability to rely upon SUDR?
The draft Exit Regulations 'lift' the wording on disclosure from the Community Design Regulation (as required by the approach to EU retained law), replacing references to 'in the Community' with 'in the UK' (subject to the point discussed in the next paragraph). Given the existing 'preferred' interpretation of the rules on disclosure in relation to UCD, the concern is that the same could be said to apply to the new SUDR i.e. that there must be a 'first disclosure' in the UK for the SUDR to arise (which would potentially mean no UCD would be available). However, it is entirely possible that a UK court would reach a different conclusion to the German court, and find that it is sufficient for SUDR for a design to be disclosed in, say Milan, provided it could reasonably have become known in the circles operating in the sector in the UK (particularly as a relevant provision in the EU legislation, that influenced the German court's interpretation, is not included in the draft Exit Regulations). Until this point is resolved, however, the uncertainty puts designers in a difficult position.
The particularly interesting point is that the draft Exit Regulations provide that the design should be "first made available to the public within the UK, a qualifying country or a qualifying territory" . Such 'qualifying' countries or territories would be set by Regulations to be made by the Secretary of State. This does tend to suggest that there is one eye on potential future reciprocal treatment in relation to unregistered designs with the EU.
The draft Regulations also deal with the following points in relation to designs:
Registered Community Designs (RCDs)
As with EU trade marks, any existing RCDs will be protectable and enforceable through the creation of a new UK right, with the same filing/priority date, which will be called a 're-registered design'. This will happen automatically, without any fee, and any RCD-owner that does not wish to have the new UK right will able to opt-out (other than in certain circumstances).
If an application for an RCD is outstanding at Exit day, there will be a nine month priority window in which to file an application at the UKIPO, which will require the payment of a fee.
For designers considering their options in the run up to 29 March, it is worth noting that an application for an RCD can be obtained at the EUIPO in a matter of days.
An important point in the draft Exit Regulations relates to RCDs where the applicant has deferred publication (it is possible to defer publication of an RCD for up to 30 months at the EUIPO). The draft Regulations confirm that, where publication of an RCD is deferred at the day of Exit, the owner can apply to the UKIPO for their design to be registered in the UK within the nine month priority window after Exit, and retain the earlier filing date of the RCD. This will require payment of a fee but there will be no examination at the UKIPO. Publication of the UK registered design can then be deferred at the UKIPO for up to 12 months, provided the overall deferment period does not extend beyond the total 30 months.
Existing Unregistered Community Designs (UCDs)
Existing UCDs will remain protected in the UK for the remainder of their term, and will be called 'continuing unregistered community designs'. Post-Exit, UCDs will no longer extend to the UK but, of course, UK-based designers will still be able to rely upon UCDs in the EU.