Colin Hulme: IP report confirms designs are key part of UK economy
Colin Hulme comments on what new intellectual property data reveals.
A recent report by the UK Intellectual Property Office confirms what we have already known: that designs are a key part of our economy in the UK. The report discloses that as of 2015, the UK design economy was worth six per cent of the nation’s total economy – the same as the building industry and the logistics sector combined. Whilst I have some reservations as to the research methodology, the report makes some interesting points.
Designs can be protected either by registration or automatically as unregistered design rights under different regimes in the UK and EU, which can be confusing to many. Recognising the need for improvement in the designs regime, the IPO commissioned research surrounding the attitudes and behaviour of designers when they experience infringement of their designs.
The results of that research are now available (the full report can be found here). The report includes an overview of the rights which designers value most, the impact of infringement on their businesses and what happens when designers go to court. Although the recommendations of the IPO do not break new ground, the report presents a good opportunity to take stock of the protections available to designers generally, as well as the actions that can be taken when IP rights are infringed.
Experience of infringement
The majority of designers surveyed worked either on their own or for small companies. Infringement was found to be common, with most (98.3 per cent) designers having experience of it. Unsurprisingly, innovative designs with a disruptive quality tended to be infringed more frequently than less innovative designs.
The IPO found that almost all designers monitor the market for potential infringement. The most common way for designers to find out about infringement was through online searches, followed by receiving alerts from customers, hearing of breaches in emails and seeing their designs in someone else’s catalogue.
Responding to infringement?
There appeared to be a reluctance amongst respondents to take legal action against infringers. Disappointingly, many designers didn’t think that the potential gains would justify the costs – notwithstanding the considerable sums that were lost as a result of the infringement. Indeed, the most common response to infringement was to send a letter to the infringing party.
Reactions to the process of litigation were mixed. Over one-third of respondents reported that they were dissatisfied with the court system. When designers did go to court, their motivation was defending their IP as a matter of principle. Commercial considerations were not the main motivation to enforce rights.
The overall findings suggest that disputes are not as common as the incidence of infringement. While most designers had experienced infringement, fewer than 10 per cent had been involved in a dispute concerning it.
Confidence in design rights
In terms of protection, respondents cited patents as being most effective, followed by trade marks, registered design rights and copyright.
Perhaps surprisingly, unregistered design was ranked bottom of the list of useful rights when in practice it is often the most versatile. This may be partly down to the need to prove copying in an unregistered design rights case. However, the analysis of court cases from 2013-2017 shows that only 50 per cent of registered design rights are successfully defended, whereas the success rate for defending unregistered design rights is nearly 70 per cent.
Attitudes of infringers
A cause for hope is that the IPO found that most infringers cease their infringing activity when challenged by the design right owner, usually permanently. However, larger companies are more likely to ignore an infringement claim or allege that a design wasn’t valid. Taken with the reluctance of designers to seek legal advice, there appears to be significant opportunity for infringement to go unchecked.
The report’s recommendations focussed mainly on how a future report should be carried out rather than pro-actively seeking opportunities for improvement. The key suggestions put forward were:
Working with trade associations and other bodies to teach designers about their design rights.
Providing guidance to the court process, specifically tailored to the design sector.
Encouraging the legal profession to offer more pro bono advice to designers and to be clearer about the costs incurred when defending design rights.
These suggestions are clearly a long way off a concrete plan for improving the protections available to designers. Nevertheless, the report highlights key areas where designers are either unaware of the protections available or where there are misconceptions regarding the level of protection offered by certain IP rights.
Colin Hulme is a partner at Burness Paull