This paper reports on the deliberations of the Bills Committee to study the Registered Designs Bill and seeks Members support for the Bill to resume Second Reading debate on 4 June 1997.

Background

2. Hong Kongs current registered design laws depend on that of the United Kingdom (UK). In accordance with the UK Designs (Protection) Ordinance, any design registered in the UK under the Registered Designs Act 1949 as amended is automatically protected in Hong Kong for as long as the registration remains in force in the UK.

3. As from 1 July 1997, Hong Kong will need to put in place an independent registered designs system in accordance with Articles 139 and 140 of the Basic Law. The Sino-British Joint Liaison Group has agreed to the proposal to localise the registered designs law in Hong Kong and the continued application of international intellectual property treaties such as the Paris Convention for the Protection of Industrial Property and the Berne Convention for the Protection of Literacy and Artistic Works.

4. In January 1994, the Hong Kong Law Reform Commission (LRC) published a Report on Reform of the Law Relating to Copyright and recommended that Hong Kong should establish its own designs registry and proposed that the registration system should be modelled on the UK Act 1949.

The Bill

5. The Bill seeks to establish an independent registered designs legislation in Hong Kong modelling on the UK Act 1949 and the European Union (EU) design registration system with some modifications. In line with the international trend, the Bill proposes a formality examination approach and a worldwide novelty requirement for registration of designs in Hong Kong.

The Bills Committee

6. At the meeting of the House Committee on 21 March 1997, Members decided that a Bills Committee should be formed to study the Bill. The membership list of the Bills Committee is at Appendix I.

7. Chaired by Hon CHAN Kam-lam, the Bills Committee has held four meetings, including three with the Administration. The Committee has considered major concerns expressed by the design industry and users including organisations previously consulted by the Administration.

Deliberations of the Bills Committee

Public consultation

8. The Bills Committee noted that only 12 organisations had responded to the Administrations invitation for comments during public consultation on the draft Bill in January 1997. Considering that the Bill would have implications on the trade and industry particularly the small and medium enterprises in Hong Kong, members considered that the Administration should make more efforts to increase awareness of the Bill by reaching out to designers associations and design users. The Administration has accepted the Committees views and organised two seminars on 23 April and 3 May 1997 to explain and clarify provisions in the gazetted Bill to designers. Members noted that designers generally supported the proposed design registration system which had already incorporated most comments received by the Administration during the public consultation stage.

9. To facilitate the industrys understanding and compliance with the requirements after enactment of the Bill, the Administration has also accepted members suggestion to publish user-friendly information brochures and organise talks and seminars for the design industry.

Non-examination approach

10. Members note that a non-examination or formality examination approach for design registration will be adopted notwithstanding LRCs recommendation of a formal examination system. The Administration has explained that, after LRC published its report, the EU has proposed a non-examination system as the norm for registration of designs and the UK is also obliged to changeover to the new approach by 1999. In view of the new trend and the fact that any form of substantive examination is bound to be subjective, the Administration does not consider it worthwhile to invest substantial resources to conduct search and examination to determine the novelty and registrability of designs. The Administration has clarified that, to facilitate search by public, the proposed design registry will maintain records of the registered designs including their particulars and images in the form of drawings or photographs. Members note that the proposed non-examination approach is in line with the rest of the intellectual property system in Hong Kong.

Worldwide novelty

11. As regards the novelty standard for registration of designs, the Administration has proposed to follow the international trend of worldwide novelty rather than local novelty as recommended in the LRC report. The Administration advises that the proposal, whereby the applicant will have to make a statement of novelty in respect of the design under registration, has received support during the public consultation stage.

Registrable and unregistrable designs

Coverage of the Bill

12. The Committee acknowledges that design articles cover a wide range of goods including domestic appliances, toys, furniture, textiles, fashion, jewellery and watches, etc. For a design to be registrable, the Bill provides that its features such as shape, configuration, pattern or ornament must be applied to an article by means of an industrial process and appeal to the eye. A design is not registrable if it does not satisfy the registration criteria such as aesthetic appearance, or if it is contrary to public order or morality. The Bill also excludes computer programs and layout designs (topographies) of integrated circuits which are covered by the Copyright Ordinance and the Layout-design of Integrated Circuits Ordinance respectively.

13. The Committee notes that two-dimensional drawings or artistic works are automatically protected under the Copyright Bill, and the Registered Designs Bill will only apply to situations where the design of such works is reproduced on articles by an industrial process for commercial uses. Articles of a primarily literacy or artistic character not intended for industrial uses therefore do not require registration under the Bill. The Administration has accepted the Committees suggestion to introduce a Committee stage amendment to clause 8 to remove any ambiguity about the scope of the Bill.

14. As regards a members suggestion of refining the definitions of registrable designs and unregistrable designs, the Administration is of the view that given the complexity of the subject and absence of a definitive ruling, any attempt to elaborate on the two categories would unduly add to the volume and contents of the Bill. In case of disputes, it will be a matter for the court to decide.

Grey areas between the Registered Designs Bill and the Copyright Bill

15. Members have expressed concern about possible grey areas with regard to protection conferred by the Registered Designs Bill and the Copyright Bill. To allay members concern, the Administration has explained that owners of artistic works automatically enjoy copyright during his life time plus a period of 50 years. However, if a copyright owner wishes to apply industrial process to his design to reproduce it on articles for commercial purposes, he will have to register the design under the Registered Designs Bill for monopoly rights up to a period of 25 years. On the other hand, unregistered designs registrable under the Registered Designs Bill will only have protection up to 15 years. In this connection, members have reservations as to whether the copyright of an artistic work would be eroded by the proposed registered designs law. Addressing members concern, the Administration has clarified that the legislative intent is not to reduce copyright protection of artistic works, but to preserve the existing position for the duration of copyright protection of a design to be cut down once it is registered for protection under the registered designs law. By way of illustration, an artistic work enjoys copyright protection before it is applied to industrial uses, and the copyright will largely exhaust if the design is subsequently reproduced for industrial uses, as the latter will then be protected by the registered designs law. After deliberations, the Administration has agreed to propose amendments to the Copyright Bill to remove ambiguity in the provisions of the Copyright Bill and Registered Designs Bill. As the concern is primarily that of copyright, no amendment is required in the Registered Designs Bill.

16. One primary consideration for registering a design will be the intent of creating the design, i.e. whether it is to be applied on articles by any industrial process. In response to a members suggestion of providing a definition on industrial process in the Bill, the Administration has advised that according to the existing UK standard, a design which has been reproduced on 50 articles or more will be considered an industrial design. The same standard will be specified in the subsidiary legislation upon enactment of the Registered Designs Bill.

Rights of a registered design owner

17. The Committee notes that, under clauses 31 to 35, a registered design owner will have the right to prevent third parties who have not obtained the owners consent, from making, importing or selling articles bearing or embodying a design which is a copy of the registered design for commercial purposes. The registered design owner will enjoy protection for an initial period of five years, and the protection period can be extended up to 25 years subject to payment of renewal fees every five years. Members have noted that the rights will be subject to terms and conditions as determined by the court, or use by government during a period of extreme urgency.

Infringement

18. The Bills Committee notes that only civil remedies will be available for infringement of a registered design under clauses 48 to 57 of the Bill. The Administration has clarified that as unregistered designs will have protection for 15 years, the owner of an unregistered design can also claim remedies for imitations of his design.

Transitional arrangements

19. To facilitate smooth transfer of designs registered in the UK to the Hong Kong designs registry, the Administration has proposed that designs already registered in the UK before commencement of the new legislation in Hong Kong will be deemed as registered in Hong Kong. The deemed registered designs, however, will have to be renewed in Hong Kong within six months of the commencement date of the new law, or six months before the next UK renewal date, whichever is later. Unless renewed in Hong Kong within the prescribed period, the UK registered design will not be protected in Hong Kong on expiry of the UK protection period. In this respect, members have expressed concern that the Administration should ensure that affected parties will be notified of the transitional arrangements in advance to avoid possible misunderstanding or disputes. The Administration has accepted the Committees view and will launch publicity programmes in Hong Kong and in the UK on the transitional arrangements, in addition to advertisements on the UK Patent and Design Journal. The local design industry and concerned organisations will also be notified of the transitional arrangements by means of information booklets and seminars organised by the Administration.

Committee stage amendments

20. The Committee stage amendments proposed by the Administration and which are agreed by the Bills Committee are given at Appendix II. The Administration will make a few minor editorial amendments to the titles of the Bill before the Second Reading debate.

Recommendations

21. The Bills Committee supports the Bill, subject to the Committee stage amendments to be moved by the administration, and recommends that Second Reading debate should resume on 4 June 1997.

Advice sought

22. Members are invited to support the recommendations at paragraph 21 above.

LegCo Secretariat

21 May 1997

Appendix I

Bills Committee on Registered Designs Bill

Membership list

Hon CHAN Kam-lam (Chairman)

Hon Mrs Selina CHOW, OBE, JP

Hon Ronald ARCULLI, OBE, JP

Dr Hon HUANG Chen-ya, MBE

Hon Ambrose LAU Hon-chuen, JP

Hon Margaret NG

Hon SIN Chung-kai

Total : 7 members

Legislative Council Secretariat

7 April 1997

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Paper for the House Committee meetingon 23 May 1997

Report of the Bills Committee on Registered Designs Bill

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