The introduction of a 12-month grace period for designs in Australia will make it easier to coordinate the filing of Australian design applications into a broader international filing strategy, where there has been a pre-filing disclosure.
A Designs Amendment (Advisory Council on Intellectual Property Response) Bill 2020 (the Bill) was passed by Parliament on 30 August 2021, which among other things, introduces the 12-month grace period for filing a design application in Australia. This grace period will have effect in Australia, but not other jurisdictions, and so cannot remedy pre-filing disclosure for an applicant in another jurisdiction without similar provisions.
A design application in Australia will need to be filed within 12 months of disclosure to receive the benefit of the grace period, and the disclosure will need to have been made by:
- The designer(s);
- The owner(s) of the design where this is someone other than the designer;
- A party authorised by the designer or design owner; or
- A party who obtained the design from the designer or design owner without their permission.
Publication of a design by any official designs office is not eligible for the grace period.
The Australian design grace period will come into effect 10 March 2022.
In order to balance the rights of design owners and third parties in light of the introduction of this grace period, the Bill also introduces an infringement exemption that protects third parties against infringing a registered design where they were using it before its priority date.
This applies to both independent creation, and in the case that the third party uses the design based on the disclosure made by the design owner before the priority date.
Accordingly, it remains preferable to file a design application in Australia before making any disclosure, or which claims priority under the Paris Convention, but the grace period will be available if required.
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A client recently asked me a question regarding the use of the TM symbol on products, and while it might sound like there’s a simple answer, it isn’t as simple as you might think. Here’s what they asked:
“Just wondering whether it’s beneficial for me to have TM on my packaging? I’ve noticed a lot of big brands don’t have TM but are in actual fact trademarked.”
All traders have a right to use the ™ symbol alongside the brand they apply to register or use in connection with the product they offer to the public from the first day that product hits the market (assuming that they are not aware that use of the brand will impinge on the rights of others). I use the term product in this answer however the same rules apply to services but the way the brand is used for services is a topic for another article.
The ™ symbol is not well understood by the general public, with most people thinking it denotes that the brand is a registered brand. That’s not correct, but, it can be an unintended advantage if most people think that’s the case. Note that the ® symbol can only be used on a product when that brand is officially registered and only used on products covered by the registration and offered into the same country in which it is registered. While most brand users know the difference between the ™ symbol and the ® symbol, the public and some competitors don’t always have the same understanding. However, the use of the ™ symbol none-the-less puts everyone on notice that there is a brand that is considered by its user/owner to be the brand for the respective product. That is generally a good thing and can be very important when claiming common law rights (those rights which accrue when the brand is not registered), since it is clear to the reviewing body that the user/owner knew that they were using the ™ symbol intentionally to signify there was a brand being used on the product distinct from any descriptive aspect of their marketing of that product (proper use of brands is a topic for a future article).
The more well-known the brand, the less the owner needs to tell everyone it is a brand (as long as the owner continues to use it as a brand). It could be that those owners want to avoid the possibility that either of the symbols will spoil the aesthetic of the package or the carefully crafted advertising script, and thus the owners are willing to forego any advantage the symbol may provide. That’s an easier choice for a well-known brand and remains a hard choice for the lesser-known brand owner. For example, L’Oréal is a house brand and there are at least 39 sub-brands including Guy Laroche, Redken, Yves Saint Laurent, Heratars, Diesel, Maybelline, and many more. The ™ symbol may not be used with those brands on products bearing the house brand or the sub-brands.
My recommendation would be to use the ™ symbol on the product, its packaging and any promotional material. It is also useful to use it on invoices for the sale of the product. A fall-back is to mention that the brand is a trade mark of the owner somewhere on the packaging or use directions, and to at least use the ™ symbol on the promotional web page and on all advertising for the sale of the product. If you start using the ™ symbol, there’s no doubt your brand will be better off.
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Have you heard the common misconception that IP rights are the domain of big companies and that intellectual property (IP) is too expensive for Australian SMEs? We have some good news for you – it’s definitely not true that you need a big budget to have an effective global IP plan – especially if you are prepared to learn a little.
Recent studies* have shown that SMEs holding a single IP right, whether a patent, trade mark or a design, have 67 per cent greater revenue per employee than their competitors without any IP rights.
Your SME’s New Product Development Plan should always include an IP plan. While working with a good patent and trade mark attorney, and with the right approach, IP protection is affordable and should always be considered.. When forming on an IP plan, some basic DIY can help reduce IP costs and provide a solid foundation to work with. It might also help to work with supporters who have travelled the commercialisation road before, who can de-risk your IP journey.
Let’s work on the scenario of you and your team developing a new product. While there are plenty of challenges, you have confidence that it will be a market success. You have a long and expensive commercialisation road ahead. Should you spend some of your limited budget on IP? And, if so, when and how much?
Each situation will be different, but questions to ask include:
- If successful, will products arising from the project have a long commercial life?
- Are profits likely to be high enough to attract competitors and, if so, are competitors likely to produce a marketable copy?
- What would the impact to our company be if third-party IP rights prevented the sale of the new product?
If you answered yes to at least some of the above questions, then you should explore IP protection and conduct patent searching.
Large companies, be they consumer-product companies, medical device companies, research institutions or food and wines business, typically have a well-developed IP plan to navigate questions of freedom to operate, when to pursue patent rights and how to licence IP SMEs however, sometimes only deal with IP issues infrequently and may have a more difficult time navigating the patent system.
Fortunately, laws to protect IP (patents, trade marks, design and copyright) are all designed such that, early in the product life, costs are relatively modest. Later, typically years later, and ideally when your product is generating significant revenue, costs build. Costs are, however, always within the owner’s control.
Agreements between countries are such that a single patent, trade mark or design filing can be made in Australia and provide the basis of future overseas filing. This keeps initial costs low, while still preserving the option of US, Chinese and European filings (and in hundreds of other countries). Applicants have 12 months in which to file patents overseas based on an initial Australian patent filing, and this time frame can be extended to 30 months through an international (PCT) application. For trade marks and designs, six months is provided.
After an initial Australian filing, a medical devices start-up, for instance, might focus on a small target group of countries where there are well-established health systems with good reimbursement processes (e.g. one of more of Australia, the UK or China). A resources start-up or SME might focus on countries where there are well-established and relatively low-risk paths to market (e.g. one of more of Canada, South Africa and Australia). Each company should carefully consider what countries are relevant to their business plan and whether the costs, risks, and benefits support IP filings in those countries.
As an SME, you may be concerned about the significant costs of enforcement. Fortunately, enforcement action is rarely required and typically occurs many years down the track when revenue is being generated. In many ways, obtaining IP rights can be thought of as a form of insurance, buying the option to enforce at a later time. Further, a strong and layered IP position acts as a deterrent to competitors and can attract investors.
There are many simple steps you can take at little or no cost that will provide a strong foundation for the pursuit of valuable IP rights:
At Madderns, we have more than 20 patent and trade mark attorneys with a broad range of expertise and experience who have helped many companies navigate their way through IP issues. Our team is your team. Which of our team has the technical skills and experience that most closely aligns with your needs? See their profiles:
Give us a call or send us an email and we’ll help you on your journey.
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We are pleased to announce the appointment of Jeff Holman to Managing Partner, from 1 July 2021.
Jeff has a strong reputation within the profession, the firm and among his clients as a registered Australian and New Zealand patent attorney. He specialises in chemistry, pharmaceuticals, biotechnology, polymers, materials, nanotechnology, and medical device patents.
Jeff takes over from Tom Melville, who was appointed Managing Partner in 2014. Under Tom’s leadership, Madderns has grown, maintained an enviable culture, attracted outstanding new talent and continued to assist a wonderful and diverse portfolio of clients to take their great ideas to the world.
Tom will now have more time to immerse himself in client-focussed work at Madderns, including leading the firm’s engineering practice and contributing to the board.
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The Australian government agency responsible for administering IP rights in Australia has recently announced that from May 2021 to June 2022, it will be conducting a trial of an innovative machine learning model to improve the process where patent applicants are directed to request examination.
While patent examination can be requested at any time, examination must be requested within two months of receiving a direction from IP Australia to do so, or within five years of filing (whichever is sooner). Failure to request examination in time will result in lapsing of the application.
IP Australia will typically direct an applicant to request examination around 4 years after filing. Once Examination has been requested, it joins a queue, where it waits to examined, with IP Australia aiming to issue a first report within 12 months.
For applicants looking to accelerate the process, there is the existing option of requesting expedited examination, where IP Australia will aim to issue the first report within 8 weeks of the request.
S44(2) of the Patents Act 1990 stipulates that the Commissioner may, on one or more prescribed grounds, direct the applicant to request examination. The prescribed grounds are found in Reg 3.16 of the Patents Regulations 1991:
- That the Commissioner reasonably considers it expedient to give the direction having regard to the progress made in the examination of applications filed before the filing date of the application concerned;
- That the Commissioner reasonably considers it to be in the public interest to give the direction;
- That the Commissioner reasonably considers it expedient to give the direction, having regard to the examination of another application for a standard patent or the examination of an innovation patent.
The Regulations also require that the direction must be given in writing and state the grounds on which it is given.
The intent of the new model is to issue a direction to applicants when an applicant’s IP strategy is more developed, with the aim of helping applicants navigate the patent examination process more efficiently. This will apply to applications made using patent attorney firms and self-filers. The model may change the previous first come, first served order of directions by focusing on applications that are considered more likely to be ready for examination, but the model will not change the directions process as mandated by the Patents Act.
However, it will be interesting to see whether the reason provided is updated to indicate that the decision has been made because of this new process, or whether it will remain the current default reason:
“You have received this direction because either progress has been made in the examination of applications filed before the filing date of your application or I consider it to be in the public interest”
The announcement of this trial comes around the same time that the Australian Government’s commissioned review in to the accessibility of the Australian patent system to small and medium enterprises (SMEs) was tabled in parliament. Provide a link.
The final report of the Patents Accessibility Review made 16 recommendations intended to improve both the accessibility of the patent system and the support provided to Australian SMEs applying for protection in Australia and overseas.
The report was based on findings from oral consultations with SME representatives and other specialists, including commercialisation advisors, organisations representing patent attorneys such as IPTA and FICPI and patent attorneys. The research team also considered submissions and undertook their own research.
While the complete report makes interesting reading for all stakeholders, it does provide commentary on processing times for patent applications, with the executive summary stating:
“On processing times there is no significant issue, given that IP Australia can arrange for expedited review of a patent application at no extra cost, this taking three months. Some participants were quite happy for the delay of a year or so (this being the standard patent examination time under normal circumstances) – but there is no doubt that the availability of an expedited review service will deal with any problem here.”
The Report identified that for many, the delay in examination of a patent application was useful, as costs were postponed, including the following, non-attributed quote:
“Australia is amongst the fastest jurisdictions in the world.
This is a red herring. SMEs applications shouldn’t be dealt with quickly. …It’s important to defer prosecution costs.”
The decision to move to this new process raises many questions:
- What metrics does IP Australia intend using to determine how developed an applicant’s IP strategy is?
- What does IP Australia consider to be efficient navigation of the patent examination process?
- Will this model be influenced by the progress of corresponding overseas patent applications?
- What does it mean to be more likely to be ready for examination?
- What can an applicant do to prevent early directions issuing?
While the findings of the accessibility report are not contradictory to IP Australia’s efforts to improve the customer experience, it is hoped that the agency is careful when it comes to anticipating the diverse needs of its customer base.
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