Whether you are a budding young designer just about to leave University or internationally recognised, you may well have considered that your creativity was now being recognised and your rights strengthened with the passing of the Intellectual Property Act 2014.[1] This legislation criminalised the infringement of registered designs and brought with it a major deterrent to offenders with the fear of a 10 year prison sentence.
NESTA estimate that designers contribute £15.5 billion worth of investment to the UK, which equates to a cost of infringement of £0.775 billion (5%).
Despite the Government estimating a spend of £8.18 million to enforce this new offence over a 10 year period, following our Freedom of Information Requests we have discovered that nearly four years on, those responsible for enforcing the offence and protecting designer’s rights have yet to prosecute a single case. Designers are increasingly turning to a private criminal prosecution to deter infringers and protect their rights.
History and background of the offence:
What is a design right?
Notably, ‘design rights’ refer to those rights relating to the configuration, shape and unique arrangements of products. A registered design right protects a rightsholder for 25-years post-registration (provided that renewal fees are paid every 5 years). Despite this protection, copying is said to take place frequently including by larger retailers who are confident that any legal action will be out of the reach of the smaller player.
The arguments in favour of criminalisation
Following substantial lobbying from pressure groups, section 13 of the Intellectual Property Act 2014 inserted section 35ZA into the Registered Designs Act 1949, to criminalise the infringement of registered designs.
This was because firstly, taking inspiration from Germany, it was recognised that there was a need for a deterrent; secondly, designers, particularly small designers, felt that they had no effective remedy when their designs were copied because of the cripplingly high cost of civil litigation in this country and because offenders used whatever means they can to delay proceedings. Given that £10,000 might not even get you ‘Past Go’ in civil litigation, cost is a very big concern to designers. Allowing parties to refer offenders to the authorities to criminally prosecute the copying as a criminal offence, or doing so oneself by way of a private prosecution, was part of the solution.
The argument on the potential cost savings to the State in prosecuting the offence was compelling explained by Viscount Younger of Leckie:
“On the same subject, the noble Lord, Lord Howarth, raised the issue of the costs to this country. In their impact assessment, the Government have estimated a cost of £8.18 million over the course of 10 years. This figure was arrived at by estimating the costs to the police, the Crown Prosecution Service, Her Majesty’s Courts and Tribunals Service, and potential legal aid costs. However, it is difficult to estimate the benefit of the offence to business. The organisation Anti Copying in Design has estimated that the cost of infringement to the design industry is around 5% of the total value of design to the UK economy. Based on the most recent estimates from NESTA of £15.5 billion as the value of design investment in the UK, this equates to an annual cost of infringement of £0.775 billion.”
Arguments against the criminalisation
The introduction of the criminal offence was not without dissent however, Lord Howard claimed that the offence could serve more as a burden on the criminal justice system than an operative solution when considering the strain on trading standards department resources as well as the subjective nature of the offence.
Despite this reservation, the Grand Committee on the Bill for this Act stressed that criminal sanction would not only provide a valuable remedy but would ‘act as a deterrent to this cynical behaviour’ whilst promoting ‘simplification’; ‘improving the services offered by the Intellectual Property Office; strengthening rights, including enforcement; and improving how disputes are resolved.’ Pivotally, design right infringement provided a gateway for criminal action in the protection of novel designs, encouraging freedom of creation as well as fair competition in the market.
Establishing an Offence:
When the legislation was passed, we looked at how the authorities (or Designers) might go about prosecuting this type of offence in our article: ‘Why, How and When to bring a Private Prosecution for Design Right Infringement!’
The Need for Action:
We have recently made various Freedom of Information (FOI) Requests to i) the Intellectual Property Office, ii) the Crown Prosecution Service, and iii) the City of London Police (who have pioneered the specialist Police in Intellectual Property Unit (PIPCU)) we have discovered that none of these organisations have commenced a criminal prosecution for design infringement, or even commenced a criminal investigation for the same. Of course, it is not known whether this is as a result of designers failing to report offenders to the authorities, or inertia on the part of the state. Either way, given that no action has been taken to enforce the offence, Lord Howard’s concern that the offence could serve more as a burden on the criminal justice system could not be further from reality.
Designers have increasingly been considering a private prosecution to protect their rights and from 2016, Edmonds Marshall McMahon have privately prosecuted a number of cases concerning design right infringement in what are believed to be the first ever design rights prosecution cases. These prosecutions have resulted in the offenders being fined, ordered to pay the prosecution costs and subjected to the draconian confiscation regime, as well as having their infringing stock forfeited and destroyed.
[1] Which brought into force section 35ZA of the Registered Designs Act 1949.
