EPO Consulting on Patent Novelty Grace Periods
The EPO recently announced that it is conducting a survey regarding the EPO’s narrow and strict patent novelty grace period provisions amongst randomly selected European Patent applicants as well as consulting with user and stakeholder organisations.
Currently the grace period provisions for a European Patent (EP) only allow novelty to not be affected by disclosures resulting either from displaying the invention at an officially recognised exhibition or due to evident abuse of the rights of the inventor / applicant / assignee. For EP applications and for national validations of EP applications that received a decision to grant such disclosures are non-prejudicial to the absolute novelty requirement if they occurred no more than 6-months prior to the patent application filing date. The patent law in respect of novelty grace periods for the majority of EPC contracting states is the same as applies under the EPC. However, the patent law of EPC contracting states for patents that enter that state otherwise than via an EP application can be different to the EPC provisions. Some EPC contracting states apply the 6-month grace period in relation to the priority date for the same types of disclosures, while others apply a general grace period in respect of any disclosures by the inventor / applicant / assignee or due to evident abuse of their rights either for of period of 6 months or 12-months prior to the priority date.
Novelty grace periods are not discussed in either the Paris Convention or the TRIPs Agreement. They were provided for in the 2004 draft of the (abandoned) Substantive Patent Law Treaty (SPLT) negotiations. If ratified the SPLT would have required contracting states to apply a general grace period in respect of any disclosures by the inventor / applicant / assignee or due to evident abuse of their rights either for of period of 6 months or 12-months prior to the priority date. Countries outside of the EPC who have amended their patent novelty grace period provisions since the abandonment of the SPLT negotiations have widened rather than narrowed the grace period. In large part this has been driven by regional or trans-national free trade agreements. Of the jurisdictions having high or even moderate levels of patent applications none are subject to patent novelty grace periods that are stricter than those under the EPC. The strictness of the novelty grace period provisions under the EPC has to some extent slowed the rate at which other countries move to a more general grace period in line with the provisions in the draft SPLT as they do not want their nationals to inadvertently miss out on protection via the EPC if grace period provisions are relied upon.
The EPO is expecting to publish the feedback it receives around late Q1 or early Q2 of 2022 and that feedback will provide important input for evidence based decisions. Were a SPLT style general grace period to be more widely applied, particularly in the jurisdictions having moderate to high levels of patent applications, then inventors could test the market before deciding on their filing strategy – although it would still be an approach that is not without risks. If it is decided that the strict novelty grace period provisions in the EPC will remain unchanged it will be interesting to see if any EPC contracting states change their national law in that respect to encourage more direct filings, rather than via the EPO.
Consultation on UK Design Protection Launched
The UKIPO has launched a consultation on the protection framework for designs with the aim of creating a framework that is fit for the future and incentivises innovation led growth taking into account that the UK’s designs law no longer needs to be harmonised with EU law.
Registered designs - search and examination
In 2006 the UKIPO stopped checking for newness and individual character so as to harmonise with the EUIPO’s practice in those respects. Views are sought on whether the UKIPO should start designs searching again and examine for novelty and individual character and if so how and to what extent. Advances in technology may allow for searches to be mainly done with AI tools and these could even be available for pre-application checks. Should searches be limited to exact matches only, with individual character remaining unexamined? Should the current examination framework remain as the first tier of a two-tier system that requires a full search for novelty and individual character before enforcement actions can be made – like Australia? Should a bad faith provision be introduced so as to make it harder for third parties to register pre-existing unregistered designs that are not their own? Should an opposition period be introduced.
Simplifying the designs system
There are currently four different types of overlapping design protection in the UK. Namely:
- registered designs, protecting the 2D and 3D appearance of the whole or a part of a product for up to 25-years;
- UK unregistered design right (“design right”), protecting internal or external shape or configuration (but not surface decoration) of the whole or a part of a product for the lesser of 15 years from when the design was first made or recorded in a design document, or 10 years from when it was first sold.
- supplementary unregistered design, created to provide the equivalent of an unregistered Community design and protects the 2D and 3D appearance of a product for 3 years from when the product is first disclosed in the UK; and
- continuing unregistered design, which provides UK protection for products protected in the UK as unregistered Community designs before 1st January 2021 for the remainder of their 3-year term (and to which the UK is bound by the Withdrawal Agreement).
In addition to design protection, a product may benefit from copyright protection if it is considered an original work of artistic craftsmanship within copyright law. Copyright in original artistic works lasts for the life of the creator, plus 70 years.
These rights can overlap for a given product and different aspects of a product can be protected by only some of those rights. They also have different qualification requirements, terms of protection, restricted acts, exceptions, and limitations. Unlike registered designs and design rights supplementary unregistered designs do not an exception to designs protection for spare parts. For the supplementary unregistered design there is no residency requirement, while for the design right there is a residence qualification. Should these differences be retained or should supplementary unregistered designs be subject to a spare parts exception and a residency requirement? It is noted that this complexity can inhibit investment in and the use of designs due to doubts regarding freedom to operate.
Disclosure of supplementary unregistered designs
Supplementary unregistered design protection is not available if the design is first disclosed outside the UK. Similarly, protection as an unregistered community design requires first disclosure in Europe. Although untested in Court it is possible that simultaneous first disclosure in the UK and EU will allow for both supplementary unregistered design protection and unregistered community design protection. Should UK design protection be available for first disclosures that are live streamed?
Does the use of AI tools affect who is the creator of a design? Currently for both registered designs and UK unregistered design rights, but not the supplementary unregistered design, there are specific legal provisions on who is considered the creator of a design generated by a computer. Should dynamic designs be protectable? The UKIPO has published guidance on the protection of transformable designs. In most cases, 4D printed products could be protectable as a transformable design. Should some 4D printed products be excluded from protection? Currently applicants need to provide a series of snapshots representing the animated sequence for which protection is sought. Views are sought on whether applicants should be able to submit digital files enabling designs to be seen in virtual 3D and dynamically? Should the ability to file physical specimens be retained?
Deferment provision for designs
Currently an applicant may defer publication of their design for up to 12 months. If it is not published within the set timescale it is deemed to be abandoned. This gives applicants the earliest possible filing date whilst maintaining the confidentiality of the design. Views are sought on whether to introduce a specific deferment provision, and whether it should be increased (to either 18-months or 30-months) or decreased, and whether specific provisions for prior use rights or co-pending applications should be introduced.
The cost of enforcing rights can be a barrier to enforcement, especially for individuals and SMEs. Views are sought on the issues and barriers designers face when enforcing their rights and how enforcement can be made easier. Evidence of the experiences small businesses and individual designers have had when enforcing their rights is particularly sought. Currently there criminal provisions for the intentional infringement of a registered design, but not for unregistered designs, with views sought on whether they should be available for unregistered designs.
Responses to the call for views can be made using the response form, with the closing date for responses being the 25th March 2022.
3. Trade Marks
Decision Maker Not Absolved by Lack of Acceptable Opinion Evidence for Specialist Goods
In Fantech (NZ) Limited v Systemair Aktiebolag 2021 NZIPOTM 40 the Assistant Commissioner held that when specialist goods are involved opinion evidence from people accustomed to dealing in specialist goods is not required in order for a determination to be made regarding the likelihood for confusion.
In December 2014 Systemair AB sought a declaration of invalidity in regards to Fantech’s registration of SYSTEMAIR in class 11 in relation to apparatuses for refrigerating, heating and ventilating, which was filed in August 2012. Systemair AB pleaded three grounds of invalidity – s. 17(1)(a) likely to deceive or cause confusion; s. 17(1)(b) contrary to law; and s. 17(2) bad faith.
The predecessor company of Systemair AB was established in Sweden and following a merger in 1997 it adopted the Systemair AB name, started using SYSTEMAIR as a brand, and progressively expanded its network of subsidiaries and distributors around the world. Fantech (NZ) is part of a group of companies, including Fantech Australia, belonging to the Fantech Group, all of which are under the common ownership of Elta Group (Asia Pacific) Pty Ltd. In 2007 Elta Group acquired a Western Australian company called Systemaire Pty Ltd, who in 2003 obtained registration in Australia of the series mark SYSTEMAIRE / SYSTEMAIR in class 11 for ventilating goods. That mark was assigned to Fantech Australia in 2016. In August 2012 the Fantech Group instructed its solicitors to file the above noted New Zealand application for SYSTEMAIR in the name of Fantech (NZ), which achieved registration in February 2013.
Systemair AB was the first to use the brand SYSTEMAIR in New Zealand. The evidence indicated use began around 2002 when it fulfilled orders by a New Zealand based supplier and continued to fulfil subsequent orders by various New Zealand businesses thereafter. The earliest specifically documented evidence of such sales was from 2008. The evidence even showed that Fantech (NZ) purchased relevant goods under the SYSTEMAIR brand from Systemair’s subsidiary in the USA.
Reputation in Invalidity Applicant’s Mark
Given the consistent sales with some being to major players in the New Zealand market the Assistant Commissioner found that Systemair AB had established sufficient reputation in the SYSTEMAIR brand in New Zealand to meet the onus on it in that regard under section 17(1)(a). The Assistant Commissioner downplayed Fantech’s concerns about whether the relevant market had been identified or whether the circumstances of trade had been evidenced for the purposes of establishing reputation. It was held that specific evidence of market share or the circumstances of trade while desirable is not essential to making such a determination and cautioned that the initial awareness inquiry should not be approached in such a way as to reduce the utility of s 17(1)(a) as a public protection measure.
Likelihood of Deception or Confusion
The Assistant Commissioner readily found the marks to be identical and the respective goods to be identical in part and at least similar for the remainder. Consequently, the determination of the likelihood of deception or confusion under section 17(1)(a) in this case depended primarily on the surrounding circumstances in which Fantech (NZ)’s mark would be used in relation to the goods in their specification on a notional fair use basis. This would include the circumstances in which the applicant’s mark may be used, the market in which the goods may be bought and sold, and the nature and kind of customer who is likely to buy the goods.
The Assistant Commissioner noted that the specified goods could range from household heaters and fans to commercial apparatus for ventilating, heating, or refrigerating. While the commercial goods will be more expensive and involve a higher level of attention by the purchaser, the Assistant Commissioner considered that purchasers of the relevant household goods would still be reasonably well-informed, observant and circumspect as the goods are not every day buys or impulse purchases.
For the goods that would be sold in a specialist market Fantech (NZ) sought to use the High Court decision MAN Truck & Bus AG v Shaanxi Heavy-Duty Automobile Co. Limited  NZHC 2821 to justify requiring evidence of persons accustomed to dealing in that market for determining the likelihood of deception or confusion. The Judge in that decision held that in the absence of such evidence the applicant was unable to discharge its onus of establishing that the opposed mark would not be likely to deceive or cause confusion. However, the Assistant Commissioner did not find that decision persuasive for two reasons. Firstly, the Assistant Commissioner noted that there was evidence from a person accustomed to dealing in the specialist market concerned and that it favoured Systemair AB’s position. Secondly, the Assistant Commissioner agreed with Systemair AB’s contention that the Judge in the MAN Truck case misapplied precedent when declining to make a determination on the likelihood of confusion in the absence of evidence of persons accustomed to dealing in the relevant market. The Judge considered he was applying proposition 10 from the New Zealand Court of Appeal decision Pioneer Hi-Bred Corn Company v Hy-Line Chicks Pty Ltd  2 NZLR 50, which at 62 made the following statement based on a principle stated by Lord Diplock in the UK House of Lords decision GE Trade Mark  RPC 297 at 321:
(10) Where goods are sold or may be sold to the general public for consumption or domestic use, the judge or officer making the decision is entitled to take into account his own experience and his own reactions as a member of the public, as well as evidence from other members of the public, when considering whether buyers would be likely to be deceived or confused by use of a trade mark. But where the goods are of a kind not normally sold to the public at large, but are ordinarily sold and expected to be sold in a specialist market consisting of persons engaged in a particular trade, evidence of persons accustomed to dealing in that market as to the likelihood of deception or confusion is essential (GE Trade Mark  RPC 297, 321;  2 All ER 507, 515).
The Assistant Commissioner considered that the Judge in the MAN Truck case neglected to take into account Lord Diplock’s focus being on whether the decision maker could give any weight to their own personal experience when the goods are sold in a specialist market. In particular, the Assistant Commissioner emphasised the following extract from Lord Diplock’s decision:
A judge, though he must use his common sense in assessing the credibility and probative value of that evidence is not entitled to supplement any deficiency in evidence of this kind by giving effect to his own subjective view as to whether or not he himself would be likely to be deceived or confused.
While Lord Diplock cautioned against the decision maker taking into account their own subjective impressions, he did not mean this to imply that the decision maker is absolved from reaching a conclusion as to likely confusion on the basis of any relevant evidence before them. To hold otherwise would be counter to the public protection purpose of section 17(1)(a).
The Assistant Commissioner also distinguished the MAN Truck case as being an opposition case with the onus on the trade mark applicant whereas the onus is on the invalidity applicant for invalidity cases. Further, in contrast, the MAN Truck case did not involve identical marks. It was contended that it would be inconsistent to require evidence regarding deception or confusion for identical marks involving the same goods when deception or confusion is assumed for such double identity for relative grounds and infringement purposes. The Assistant Commissioner found there to be no surrounding circumstances justifying keeping Fantech’s registered mark on the register and so declared the registration invalid under section 17(1)(a). The Assistant Commissioner either rejected or declined to rule on the other grounds for invalidity.