That the Grand Committee do consider the Designs (International Registration of Industrial Designs) Order 2017.
My Lords, this order modifies the Registered Designs Act 1949 and the Registered Designs Rules 2006, and is an essential step in the United Kingdom’s ratification of the Geneva Act of the Hague Agreement for registration of industrial designs.
The Hague system for international registration of industrial designs provides a means of obtaining protection for designs in multiple countries, or with intergovernmental organisations, through a single application filed at the World Intellectual Property Organization—the WIPO. Membership of the treaty is becoming more popular, and recent signatories include Japan, the United States of America and South Korea. There are currently 66 members, including 18 EU member states, and the EU is also a member in its own right.
The Government want the UK to be the best place in the world to do business. The promotion of strong and effective international IP regimes can reduce the risks of trading internationally for UK businesses and create further export opportunities. UK designers and design-led business are part of a global industry and, as such, it is essential that they have the option to protect their IP cost effectively when trading abroad. Equally, UK membership of the Hague system will allow non-UK owners of designs to register their rights in the UK, thereby encouraging the manufacture, distribution or licensing of their designs in the United Kingdom.
Ratification of the Hague system forms part of a raft of measures to modernise the design framework, including the criminal offence for the intentional copying of registered designs and the reduction of design fees. I know from speaking to designers about the importance of design to the economy. A Design Council study found that the design economy generated £71.7 billion in gross value added. By joining the Hague system, UK businesses, especially SMEs, which wish to have designs registered across multiple countries will have a simpler, more cost-effective method for obtaining and managing their rights. Businesses will be able to save money on design registrations and protect their intellectual property with greater administrative ease.
UK businesses have been able to access the Hague system since January 2008 by virtue of EU membership. The UK has been planning to join the Hague system since 2011 to provide users of the international system with the option to designate the UK directly, rather than under the broader umbrella of an EU designation. By joining the Hague system, UK businesses will continue to have access after the United Kingdom leaves the EU, regardless of what is agreed during exit negotiations. This order will come into force when UK ratification of the Hague agreement with the World Intellectual Property Organization is complete.
In conclusion, this order is essential to make the required modifications to the Registered Designs Act 1949 and Registered Designs Rules 2006 to give effect to the Hague agreement in United Kingdom law. Ratification of the Hague system forms part of a broader designs modernisation portfolio, intended to refine and streamline the designs legal framework so that the UK can provide a first-class, fit-for-purpose system for our design-led companies. We are committed to ensuring that United Kingdom businesses continue to have access to the international system once the UK has left the EU. Joining the agreement is essential to ensure that we achieve just that. I beg to move.
My Lords, I cannot guarantee to be a ray of sunshine this afternoon but I will give it a good try. I was quite surprised that despite the invitation on the consultation being from the noble Baroness, Lady Neville-Rolfe, only 10 responses were actually received. That is a bit sad because it shows that there is not a great deal of understanding about the benefits of this kind of Hague registration, so my first question to the Minister is: what visibility will this have after its adoption, given our ability to have business register designs under the Hague arrangements?
Secondly, this appears to be a bit of an IPO-lite solution. Filing, as I understand it, will not be directly with the IPO but with WIPO itself. I am also a little confused by the response to the consultation in terms of how publication will take place and the search mechanisms that will be in place for those kinds of registered designs. Those will be quite important if the system is to be accessible and if we are to get all the benefits that the Minister waxed so lyrical about during his introduction. I share many of his sentiments because I believe that proper design protection is extremely important. We have had many happy hours debating this over the last two years and I am of course a great believer in unregistered design, as well as registered design.
Moving on, it is clear that whether or not one is a great fan of the Hague registration system, it is not as comprehensive as the registered Community designs right. The fashion industry has been making increasing use of registered Community design because it covers surface decoration and a number of other aspects of design.
The last government word on this—this is a Brexit-related aspect—was that:
“The government is exploring various options”—
that is, how one addresses the fact that we will not be a member of the EU in relation to registered Community design rights—
“and are discussing these with users of the system to establish the best way forward”.
The Minister may not be able to tell me very much at this point, but I wonder whether he has anything to say on the matter by way of a follow-up letter. It is all part of the kind of protection package that designers, and businesses that make use of design and want to protect designs, find extremely important. There is quite a lot of anxiety about it. I will not quote all the commentary on the matter, but one comment I read recently said:
“Without an agreement to the contrary, community rights, such as registered and unregistered community designs and EU trade marks (previously community trade marks), will no longer have effect in the UK. Ultimately the scope of any rights applied for will not include the UK, and there remain questions about what will happen to the “UK portion” of such rights obtained before Brexit”.
There are some quite complicated issues here. My question is whether, as well as doing wonderful things like signing up to the Hague system, the work is apace and those options are really being unpacked in relation to the Community design right.
My Lords, what I will say follows closely on what the noble Lord, Lord Clement-Jones, has said. He and I—if I dare also bring in the noble Baroness, Lady Neville-Rolfe—are part of a declining band who followed the paths of the intellectual property legislation that this House has looked at over the past six or seven years. His intervention brought back fond memories of the time when we were happily discussing some of the issues that are clearly still in mind and will be in play as Brexit negotiations go on.
I make a slightly different point—also one that the Minister may wish to take back—which is that a lot of the effort that went into the earlier Bills was around the question of registered and unregistered designs. We are still in the situation alluded to by the noble Lord, Lord Clement-Jones: a huge proportion of the designs generated in this country—for which we should be very proud—are unregistered. That is partly to do with the nature of the industries involved: where short-term designs, such as fashion designs, are being created, there is probably no incentive to register them, because they are copied and lose economic value so quickly. That design element would not necessarily qualify as a design. However—I made this point before to the noble Baroness; I am sure that she will recognise it and I do not need a response— the Government missed a trick on this. Government ought to be thinking very hard about what package of measures could be brought together to encourage people with design skills and knowledge, of whom we have so many talented examples, to register their designs, because the protections that they can get, as exemplified by this order, are significant, though they are not recognised as such. The point was well illustrated by the fact that so few responded to the consultation document; I was a bit shocked to hear how small a number it was.
Nevertheless, we are where we are. I am sure I will make myself slightly unpopular with the noble Lord, who will find a way of coming back to me—
Will the noble Lord give way on the subject of designs? Like him, I am very keen that design rights should be properly protected. It is such a growing part of the creative industries. The Intellectual Property Office has done some very good work. I know this because my daughter-in-law was looking to register a design and I discovered, first, that it was relatively inexpensive and, secondly, that the IPO had set up a very good IT option. The Minister may well be able to tell us more about what they were doing, but I thought that this was interesting consumer research.
That is very good news indeed. If it is moving in that direction that picks up the point I am making. There is an unexplored case for more work here, which will bring benefits to UK plc in time.
As I was saying, I was going to grandstand a little on the instrument to ask a couple of questions that I am very confident the Minister will not be able to respond to directly. I am happy to have a letter on them. The first is specifically on the consultation exercise. The Minister touched on this in his opening speech. The comment is made that the UK does not need to keep its own register of registered design rights because after we accede to the Hague agreement, which is what we are doing today, it automatically confers protection on the UK because the UK signed up to the Designview database, operated by OHIM. However, what is the mechanism under which we will continue to have access to it after Brexit? If it is in any way tied to membership it will raise, as the noble Lord, Lord Clement-Jones, said, considerable difficulties in negotiating a fair price and the conditional arrangements. If there are to be cost barriers that will further diminish the pressure on people who wish to register designs. It is important and clearly a useful tool for protecting design rights, but if it is inaccessible it will obviously not be of any value. WIPO and the role it plays are very valuable. The IPO does not have much of a role in this. It again seems a slightly missed opportunity to beat the drum for registration, but if the connection is directly to WIPO and we are to be affected by Brexit, clearly that is a problem.
Secondly, the Minister may be aware of a Supreme Court decision in the Trunki case, PMS v Magmatic. It raised the interesting question of whether one could register or even protect shapes of articles. In this case, the well-known Trunki is a small ride-on suitcase that children use rather irritatingly, at speed, in airport lounges, which my ankles have felt over the years—not my children, I confess; there were third parties involved. The case raised the interesting issue that our systems do not allow anyone who has a visual representation or design representation to register it. As I understand it, the Hague agreement has some flexibility about what can or cannot be registered. It would be interesting to get a sense from the officials in due course about whether they think it would be possible to use the flexibilities in the Hague agreement to allow those talented members of our design profession who design representation to register those designs. I look forward to hearing from the Minister in due course.
My Lords, I am grateful to the noble Lords, Lord Stevenson and Lord Clement-Jones, for their responses. As they said, it will be important that I write with a little more detail on this. I certainly promise to do so. The noble Lord, Lord Clement-Jones, was alarmed about the visibility of the Intellectual Property Office and of these matters more generally.
I am a huge fan of the IPO. I merely say that it has reduced the fees for registered designs. That made me even more of a fan, but I am concerned about the visibility of the Hague system.
I am grateful that the noble Lord said that because I was going to refer to the exchange between my noble friend Lady Neville-Rolfe and the noble Lord, Lord Stevenson, on the Intellectual Property Office, which showed that it is doing a good job. One should give it credit for that, but I take the noble Lord’s point that this is really more about the visibility of the Hague system. I am not sure there is much we can do other than to continue our engagement with business representatives about these matters to promote the importance of Hague and designs in general. We will continue to do that.
As the noble Lord, Lord Stevenson, asked, we will also continue to promote the benefits of registration. We know that registrations with the UK IPO are rising. Since we reduced the fees in October 2016, as referred to in the most recent intervention by the noble Lord, Lord Clement-Jones, we have seen an increase of more than 100%. There is always more to do to raise awareness, and we will do what we can through programmes of business outreach. We want to get over the message that it is important for businesses to register when it would be of benefit to them, and we will continue to do that.
As I have said, I would prefer to go into greater detail on these matters in a letter to both noble Lords, but I am grateful for their general support and recognition that we want to approve the order today and see how we get on thereafter.
Considered in Grand Committee