My Lords, my noble friend the Minister correctly said that later in the proceedings we would be coming to the issue of criminal penalties for infringement of unregistered design. This is a rerun of an amendment that I moved in Grand Committee to provide that criminal sanctions would also apply to the deliberate infringement of unregistered designs. As I explained in Grand Committee, design is of key importance to the UK economy. However, the great majority of designers rely on unregistered rights, a point that has already been made eloquently by the noble Lord, Lord Stevenson. The introduction of criminal sanctions for the deliberate infringement of registered designs is a progressive step, but for most lone and micro designers the cost of registering every iteration of a design would be prohibitive. The extension of criminal sanctions to unregistered design rights for the majority of UK designers would be a deterrent to persistent copying in much the same way as it is for copyright and trademark infringement.
Criminal sanctions have been available for copyright infringement since 1862 and for trademark infringement since 1994. Criminal prosecutions have been used sparingly, sensibly and appropriately. Persistently copying designs, however, is not a criminal offence at all, which is anomalous. Persistently copying a two-dimensional drawing of a design or a design document can give rise to criminal liability under Section 107 of the CDPA, but when this two-dimensional work is converted into a 3D design, unless it is protected as a work of artistic craftsmanship, which we have previously discussed on the Enterprise and Regulatory Reform Act, copying that 3D version would not be a criminal offence. Nearly all designs, however, are copied from the 3D
original, not the 2D drawings. How do the Government justify providing a higher level of protection to a two-dimensional design than to the 3D manifestation of that design?
I have also described the inequality of arms between infringers and designers and said that, if anything, in these circumstances, there are stronger reasons for imposing criminal offences for unregistered design right infringement than there are for infringing a registered design. In Grand Committee, to my arguments the Minister riposted:
“Registered rights can be readily accessed through the Intellectual Property Office and the EU designs registry website. They include crucial information, including the design that is protected, the date on which protection commenced and whether it is still in force. This is not the case with an unregistered design right”.
However, there is no registration of copyright in this country, yet infringement is a criminal offence as I have described. Why is it not for unregistered design?
The Minister went on to say that,
“the uncertainties surrounding unregistered designs, such as the difficulty of knowing when the design right came into existence, mean that it is more difficult for third parties to ensure that they are not infringing that design right. Therefore, against the backdrop of a threat of a criminal conviction, third parties are more likely to wait longer than necessary to be sure that the design is in the public domain before building on it, thereby extending the design right beyond its term and delaying potential innovation”.
However, exactly the same arguments could be applied to copyright infringement. What is the difference between this and copyright? The evidential burden is exactly the same; it is very similar in these circumstances. It is simply that the term for copyright is longer.
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The Minister went on to say:
“Thirdly, because the UK unregistered right affords protection to functional designs, this could cause difficulties in criminal proceedings”—
could cause difficulties in criminal proceedings—
“where such designs are complex, as they well might be. For example, determining whether the interior of one alternator”—
this must be a good example—
“has been copied from the interior of another is a highly technical issue, probably requiring expert knowledge”.
I am sure that that is the case. However, the use of expert witnesses is common right across our court system. It is all a question of testing the evidence. It happens in trade marks and in copyright, so why not in design?
The Minister ended by saying:
“This is not the sort of discussion the Government believe should be dealt with in the criminal courts, especially where any element of doubt means that the high standard of proof required is unlikely to be met”.
Again, we are back to the evidence.
On the specific 2D versus 3D argument, the Minister said:
“The copying of 3D products is not the same as copying the original design document. Competitors therefore take inspiration from existing designs. Copying original design documents is closer to theft and that is why the law treats these matters differently”.—[Official Report, 13/6/13; cols. GC 394-395.]
As I said in Committee, the Minister said that this should not apply to unregistered 3D because 2D is not the same, the latter being “closer to theft”. That seems an entirely circular argument and the passage of several weeks since Committee stage has not made me any less wondrous at that circularity. I do not see that theft of a 3D design and theft of a 2D design should be morally or legally different.
I think that the Minister’s argument in Committee—I hope that it is different on Report—really boiled down to a policy matter: “We cannot really explain why, but we just don’t want to give the protection of the criminal law to unregistered design rights”. It seemed almost as simple as that. I hope that, on mature consideration, the Minister really will reconsider this issue. It is a matter of huge importance to the 350,000 designers whom the noble Lord, Lord Stevenson, mentioned, and this proposal would rectify a major wrong. I beg to move.