Part 2 Design rights – registered designs and un-registered design right.
31.10A.28 Designs – General
A design relates to the outward appearance of a product or part of a product (such as a component), rather than the product itself. Design does not relate to the way a product works – which would normally be subject to a patent.
There have been a number of changes to the law as regards the protection of designs and there are now four ways in which a design may be protected in the United Kingdom (UK):
There is a certain amount of overlap of the protection afforded by the afore-mentioned methods of protection, and similarities with other forms of intellectual property protection such as copyright and trade marks.
31.10A.29 Registration of design rightsThe majority of registered design rights effective in the UK are registered through the Trade Marks and Designs Registration Office (TMDRO) via The OHIM in Alicante, Spain, rather than directly with the UK Intellectual Property Office (UKIPO) Designs Registry. See paragraph 31.10A.44 for contact details for the TMDRO in Alicante.
31.10A.30 Registered design
A registered design right provides a legal monopoly right for the outward appearance of an article or a set of articles of manufacture to which the design is applied by any industrial process, provided the design(s) is novel or original (“of individual character”).
31.10A.31 Eligibility for registration of a design
In order for a design to be eligible for registration in the UK it must meet the definition of design set out in the RDA49 [note 1], be novel and have individual character [note 2]. Designs which are dictated by technical function [note 3], are contrary to accepted moral standards [note 4], have to be reproduced to exact form and dimensions, are not a visible part of the product, or the design is protected (such as a royal emblems, flags or a hallmark), are not able to be registered designs.
31.10A.32 First proprietor of a design
The person creating the design is considered to be the first proprietor of the design except in cases where the design was created under a commission or by an employee in the course of employment, in which case the commissioner or employer would be the first proprietor [note 5].
31.10A.33 Protection afforded by a registered design rightA registered design right gives the designer exclusive right to use the design and any similar design. Use of the product constitutes the making, offering, selling, importing, exporting, stocking or licensing of the design [note 6].
31.10A.34 Duration of a registered design
The initial protection afforded by a UK registered design is for a period of five years. Thereafter the registration can be renewed every five years to a maximum registration period of 25 years. The renewal fees (which are payable to the UKIPO) can be paid in the three month period before the due date. If the renewal fee is not paid within six months of the due date then the design registration will lapse and the design will not be protected [note 7]. This loss of protection means that the monopoly rights to the design are lost, and anyone can use the design whilst the registration is lapsed without having to pay any royalties.
31.10A.35 Restoring a design registration
Where a design registration has lapsed due to failure to pay the renewal fee on time, it is possible to restore the design registration by application to the UKIPO. It is necessary for the applicant to satisfy the UKIPO that he/she intended to pay the renewal fee on time. Restoration is not available for designs which were applied for before 1 August 1989 [note 8].
If the official receiver is considering making an application to restore a registered design in order to sell it, the UKIPO should be asked to confirm that the time limit for restoration has not expired, though they cannot give any indication of the likely success of such an application. The costs of the application should be taken into account in the negotiations relating to the sale and should not exceed the potential sale proceeds.
31.10A.36 Ascertaining the owner of a registered design
The UKIPO maintains a register of designs that have been granted the protection of registration. The register is available here (www.ipo.gov.uk/.../d-find-proprietor.htm) and gives details of the owner of the design, its renewal date and details of others with an interest in the design.
31.10A.37 Dealing with a registered design as an asset
Once a design is registered it may be bought and sold like any other property, provided the disposition is made in writing and signed by all parties to the transaction. A registered design may also be subject to a secured loan by way of a mortgage. A registered design vests by operation of law in the same way as any other personal property [note 9][note 10]. A registered design owned by a company subject to a winding-up order would belong to the liquidation estate. Similarly, a registered design owned by a bankrupt would vest in the trustee of a bankruptcy estate. Where the owner of an unregistered design right (see Section B of this part for information on unregistered design rights) is also the owner of a registered design, it is assumed that any assignment of the design right also includes an assignment of the registered design, unless a contrary intention is shown.
The official receiver should establish ownership of a registered design from the insolvent’s records and/or by carrying out a search of the information held at the UKIPO.
Where a registered design (or a registered design assigned to a bankrupt or a company in liquidation) has vested in the liquidation estate or trustee, the registered design may be sold with the assignment being signed by the trustee of the bankruptcy estate or liquidator of the liquidation estate as assignor. The UKIPO should be informed of the change in ownership [note 11].
31.10A.38 Collecting royalties due to the insolvent owner of a registered designRoyalties may be paid by a third-party to the owner of a registered design in exchange for exploiting that registered design. The royalties may be payable under the terms of a licence, with the owner retaining the registered design. In circumstances where a winding-up or bankruptcy order is made against the owner of a registered design, the official receiver should make contact with the third party paying the royalties and ask them to pay any outstanding or further royalties due to the liquidator or trustee.
31.10A.39 Royalties due as a condition of sale of a registered design (collecting income)It may be the case that a bankrupt is in receipt of royalties as a condition of the sale of a registered design. In this case the royalties cannot be claimed as an asset as the registered design does not vest in the estate. Instead, the royalties should be treated as income and can be claimed under an income payments agreement or an income payments order (see chapter 31.7).
31.10A.40 Sale of a licence to use a registered designA licence of a registered design may also be sold. The assignment should be in writing and signed by the parties. The UKIPO should be informed of the transfer.
31.10A.41 Protecting a registered design
Where an insolvent owns a registered design, the UKIPO should be informed of the winding-up or bankruptcy order and asked to note the official receiver’s interest in the design. The UKIPO should also be asked to provide details of the remaining “life” of the registration – as this could materially affect the value and details of any renewal fees outstanding. Enquiries should be made to establish whether there are any licensees or mortgages of the patent in order that they can be informed of the making of the insolvency order and asked to note the official receiver’s interest.
The UKIPO contact details are as follows:
Intellectual Property Office
Telephone: 0300 300 2000
Telephone (outside the UK): +44 (0)1633 814000
Minicom (text phone): 0300 0200 015
Fax: +44 (0)1633 817777
31.10A.42 Valuation of a registered design
The valuation of intellectual property is a complicated and sometimes controversial area and the value will very much depend on circumstances. It is unlikely that the official receiver’s local agents will have experience in this field and the official receiver should exercise discretion as to whether or not to employ specialist agents. A specialist in designs may be contacted through:
The Chartered Institute of Patent Attorneys
95 Chancery Lane
Tel: 020 7405 9450
Fax: 020 7430 0471
31.10A.43 Jointly owned registered designs
Joint entitlement to ownership of a registered design can arise where there are co-designers or if a share of the design is sold. Where a design is registered to two or more persons they are entitled, unless there is agreement to the contrary, to equal undivided shares. The interest of each would survive his death as part of his estate. Joint owners may not sell their interest to a third party without the consent of the co-owners.
31.10A.44 European Community registered designs
The rules governing the procedures, processes and requirements for EC design registration are largely the same as those relating to the UK registration process. The guidance given in paragraphs 31.10A.21 to 31.10A.29 can be followed in respect of an insolvent that owns an EC design registration. The registration authority in this case is:
The Trade Marks and Designs Registration Office of the European Union (TMDROEU, which is part of the OHIM)
Avenida de Europa 4
Tel +34 96 513 9100
Fax +34 96 513 1344
The enquiries required under paragraph 31.10A.41 should be directed to the TMDROEU, which maintains a searchable on-line register (available HERE) similar to that kept by the UKIPO in terms of its use and the information it contains.
31.10A.45 General information, eligibility and duration of design right
Unregistered design right is a hybrid displaying characteristics of both registered design and copyright. It is similar to copyright in that the protection afforded is automatic and does not require registration. It shares characteristics of registered designs in that it relates to designs, but it differs in that it does not give a total right of design ownership (as outlined in paragraph 31.10A.77), rather it gives protection against copying. The right lasts for 10 years after the date that an item made to the design is first marketed, up to a limit of 15 years from the creation of the design. Design right is exclusive for the first five years but thereafter anyone is entitled to a licence of the right to make and sell articles copying the design [note 12].
31.10A.46 Exception to design right protection
Design right does not extend to “must fit” designs (for example, a component such as a spark plug for a car where the design of the shape of the plug is dictated by the need for it to fit in a certain type of engine) [note 13]. This is to ensure that competitors cannot be prevented from copying the features of a design to allow them to connect their own design to existing equipment designed by someone else. Competitors must not copy elements of the design which are not essential to the fitting.
31.10A.47 Ownership of design right
The designer is the first owner of the design right except in the circumstances that the design is created under a commission or in the course of employment, in which case the commissioner or employer is the first owner [note 14].
31.10A.48 Design right as an asset
Design right is property [note 15] and it may be bought and sold like any other property, provided the disposition is made in writing and signed by all parties to the transaction. A design right may also be subject to a secured loan by way of a mortgage. A design right vests by operation of law in the same way as any other personal property. A design right owned by a company subject to a winding-up order would belong to the liquidation estate. Similarly, a design right owned by a bankrupt would vest in the trustee of a bankruptcy estate [note 16].
In the case that the owner of a design right is also the owner or a registered design it is assumed that any assignment of the design right also includes an assignment of the registered design, unless a contrary intention is shown.
31.10A.49 Royalties an asset where the bankrupt owns a design rightRoyalties may be paid by a third-party to the owner of a design right in exchange for exploiting that right. Royalties may be payable under the terms of a licence, with the owner retaining the registered design. In circumstances where a winding-up order or a bankruptcy is made against the owner of a design right, the official receiver should make contact with the third party paying the royalties and ask them to pay any royalties due to the trustee.
31.10A.50 Royalties as income received by the bankrupt as a condition of sale of a design right
It may be the case that a bankrupt is in receipt of royalties as a condition of the sale of a design right. In this case the royalties cannot be claimed as an asset as the design right does not vest in the estate. Instead, the royalties should be treated as income and can be claimed under an income payments agreement or an income payments order (see Chapter 31.7).
A licence of a design right may also be sold. The assignment should be in writing and signed by the parties. The UKIPO should be informed of the transfer (see paragraph 31.10A.41).