‘(7A) In this section “design right” includes an unregistered community design and a reference to the owner of the design right is also to be read as a reference to the owner of a community design right in a design.’.
The amendment would deal with extending criminal sanctions to unregistered designs. I do not understand the Government’s logic on this issue, so the amendment is to probe the Minister on the inconsistency in handling between registered and unregistered designs in the clause. As I have mentioned, about 4,000 designs are registered in the UK each year, with a similar number registered through the European regime. However, between 18,000 and 25,000 unregistered designs are lodged with Anti-Copying In Design’s database.
Given the huge contribution of design to the economy, it seems reasonable to assume, as the evidence suggests, that the vast majority of designs in the UK are unregistered. That has a valuable place for designers in the IP framework. The Minister in the other place confirmed as much when he said in Committee that
“SMEs…do not tend to register their designs”.—[Official Report, House of Lords, 13 June 2013; Vol. 745, c. GC395.]
He also said:
“The introduction of criminal sanctions for unregistered rights could lead to a negative effect on business and innovation.”—[Official Report, House of Lords, 13 June 2013; Vol. 745, c. GC409.]
My simple question, which is the reason for the amendment, is this: if that is the case for unregistered rights, why not for registered rights? How is that a consistent position?
The Minister may recall that on Second Reading I mentioned the risk that unscrupulous companies might identify unregistered designs, register them for themselves and then say to the original designer, “You’ve infringed our registered design. We will make sure that a criminal case is brought against you for deliberately copying our registered design and you may go to prison for 10 years. You can avoid that by paying us a large fee, or by assigning us the rights of that design for us to exploit commercially.” How does the clause protect small and micro-firms or help to promote innovation? The amendment would at least provide some consistency and might prevent that scenario from happening.
If the Government are intent on providing criminal sanctions for registered designs—we discussed during the previous debate how that is quite a controversial “if”—with the intention being to protect designers to the fullest extent of the law in a manner consistent with trade marks, surely they should extend those measures to unregistered designs. The purpose of the amendment is to ascertain why the Government do not propose such a consistent approach between registered and unregistered designs, given that one purpose of the Bill is to simplify the IP regime. I am interested in hearing what the Minister has to say on that.