Unregistered design rights will pose a problem for companies following Brexit. But there are solutions, says Ewan Grist of Bird & Bird.
Great product design is an indispensable requirement for all luxury goods. Not only does it make the product inherently desirable, it also serves a key role alongside trade marks in distinguishing product ranges from those of competitors.
In the UK, product design is protected by a patchwork of some five interlocking and overlapping rights, derived under both EU and UK law. Both EU and UK law offer a registered and an unregistered design right, and the UK additionally protects certain artistic works under copyright. To add to the complexity, each of these rights can differ, not just in territory covered, but in terms of the kind of design that can be protected, the requirements for protection to arise in the first place, the duration of protection and the test for infringement.
Registered designs (i.e. UK registered designs (UKRDs) and registered Community designs (RCDs)) offer by far the most robust protection. The RCD, for instance, provides monopoly-style protection for both 2D and 3D designs throughout the EU for up to 25 years. RCDs can be obtained extremely quickly (often within hours) and are inexpensive. In addition to the ease of enforcing registered rights, such rights are publicly searchable thereby serving as an important deterrent to would-be infringers. It is little wonder that so many design-led industries, including luxury goods companies, rely upon RCD protection as a central plank in their design protection strategies.
Of course, it is scarcely practical (or affordable) to seek registrations for each and every design created and so the unregistered rights (i.e. UK unregistered design (UKUDR), unregistered Community design (UCD) and copyright) also play an extremely important role, particularly in fast moving industries such as fashion. UCD has proven to be especially important: whilst only short-lived (3 years), it provides immediate protection for almost any 2D and/or 3D design throughout the whole of the EU.
Against this backdrop of available rights, luxury goods companies often adopt a sensible balance between using registered designs to protect core, iconic or long-lasting product lines, and unregistered rights to protect everything else. However, a spectre looms large on the horizon: Brexit.
The impact of Brexit
Because of the already complex regime for design protection in the UK, Brexit is likely to be significantly more disruptive in this area than it will be for the other IP rights, such as trade marks and patents. Design-rich companies in all sectors need to start their contingency-planning now to avoid being caught out by the inevitable uncertainty that the next few years will bring. The heart of the problem is that once the UK leaves the EU, the Community design regime, on which many have long relied, will no longer apply in the UK. RCDs and UCDs existing at the point of Brexit will of course continue to offer protection in the remaining 27 EU member states, but not in the UK.
Brexit and registered designs
Fortunately, the impact of Brexit is likely to be fairly limited in respect of registered designs at least. As noted above, UK law already has its own national UK registered design system which mirrors the EU's RCD system in all substantive areas, including both the requirements for validity and the rules for infringement. It is highly likely that the UK government will legislate such that any existing RCDs at the point of Brexit can be 'converted' into the equivalent UKRDs, whilst maintaining the original filing/priority date. This would leave the design owner with the pre-existing RCD (giving protection in the remaining 27 EU member states), and a new sister UKRD (giving protection in the UK). How exactly this conversion will operate (automatic or opt-in, re-examination or not, fees payable, etc) is still not known however.
In terms of registering new designs in the run up to Brexit, the designer has a choice: (i) continue to file RCD applications only and convert these RCDs into UKRDs at the point of Brexit; or (ii) file both RCD applications and UKRD applications now to avoid having to rely on any future conversion mechanism and the uncertainty as to what that might entail. The option chosen is likely to depend on the commercial importance/value of the design in question. Some larger design owners are opting for the security of getting the UKRD now (alongside the RCD), despite the potential for duplicate protection in the UK.
Brexit and unregistered designs
Unfortunately, the impact of Brexit on the unregistered design protection regime is much more problematic. This is principally because, whilst UK law already provides for an UK unregistered design right regime (i.e. UKURD), this right is significantly narrower in scope that the EU's unregistered design right regime (UCD). Most significantly in this regard, UCD protects both 2D and 3D designs, whereas UKUDR only protects 3D designs (surface decoration, so colour, patterns, etc, are expressly excluded). A consequence of this mismatch is that many designs will only attract UCD protection, and not UKUDR protection. Whilst UCD protection remains available (i.e. whilst the UK remains in the EU), this does not matter much in practice. Post-Brexit though, when UCD protection ceases to be available, those same designs will not have any protection at all (unless registered of course). They would be sitting ducks for copycats.
A further difficulty is that designs first made available to the public (e.g. displayed at a trade show) outside the EU, are not eligible for UCD protection at all. Once the UK has left the EU therefore, a new design which was first displayed in the UK would not therefore obtain any UCD protection in the EU (again unless it had been registered). It too would be wholly unprotected.
It remains to be seen whether and, if so, how the UK government will attempt to plug these alarming gaps. One option is to create a new UK unregistered right, sitting alongside UKUDR, which mirrors the outgoing UCD, but that will entail significant legislative effort at a time when Parliament's resources are already being stretched to their limit. It may be that, upon Brexit, we simply fall back on the existing UK regime, but that would amount to a very significant erosion of protection available to UK companies. The only way to be sure that designs remain protected post-Brexit both in the UK and the EU is to start to register them.