Business Law & Compliance
Change in copyright law extends duration of owner’s rights in designed products
6 min read
24 March 2016
Hamlins' Sophie Arrowsmith unveils how significant changes to copyright law, which could come into force in April, could catch manufacturers and retailers short.
Copyright in artistic work arises automatically upon creation provided the work is original and exhibits a degree of labour, skill or judgement. A design may be protected by design rights if it is original and not commonplace. Provided it fulfils both sets of criteria, an article or object (such as a work of artistic craftsmanship, sculptures or engravings) may be protected by both the laws of copyright and design rights.
This effectively acts to extend the period of protection for such articles from the 25 years provided under the design rights to the life of the author plus 70 years provided under copyright.
In order to address this discrepancy, UK law includes a caveat whereby if more than 50 articles of the copyrighted work are made by an industrial process and marketed, the copyright protection for that work is reduced to 25 years from the end of the year in which it was first marketed. This means that after 25 years, businesses wanting to use and exploit the copyrighted work did not have to seek permission (nor pay a licence fee) of the rights holder to copy the article.
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However, this exemption is not found in the equivalent EU law and the UK government was obliged to remove it from statute following a 2011 decision of the Court of Justice of the European Union. The legislation to remove the exception was passed in 2013 but not yet implemented due to a successful challenge of the transition provisions in the legislation.
When implementation of the legislation does occur, it will create a rather “odd” risk. Businesses which import, manufacture, advertise or sell products which are copies of works made by an industrial process and first marketed more than 25 years ago will find, unless they take a licence from the owner of the rights, they are infringing the copyright of works created by authors who have not been dead for more than 70 years.
Without a licence, businesses will no longer have the right to import, manufacture, advertise or sell such products. As such, those businesses infringing copyright and the owner of the rights can seek injunctive relief and damages or an account of profit against them.
It is almost five years since the exemption was declared incompatible with EU law, but a date for the implementation of the legislation and removal of the exemption has not yet been set. The government’s hint that only a “very short period to effect the repeal would be possible” has rightly concerned industry. Whilst it is easy to empathise with the longer protection afforded to iconic design classics, it is important to appreciate this has further reaching effects on established manufacturers and retailers of reproductions and more regular design items, the ‘nuts and bolts’ of certain businesses.
Bosses fear they may have little time to prepare and find alternative solutions to current arrangements. These fears have only been partially allayed by the proposed transitional provisions. No formal guidance has yet been provided by the government. The proposed transitional provisions include:
- A six-month transitional period at the end of which the repeal comes into effect;
- A six-month depletion period of existing stock during which it will continue to be exempt; and
- Compulsory licensing of works where copyright is revived.
So what does a business need to do to prepare for the removal of the exemption? The key is not to wait for the implementation of the legislation. A prudent business should start a review of at least its bestselling products to identify whether copyright subsists in those products. If so, clearly document the efforts made to identify the owner of the copyright and to obtain a licence to continue to use the copyright work.
Whilst it may be tempting to increase production to take advantage of the depletion period, businesses should remember this is only six months and after it is over, manufacture, advertising and sale of all such stock will be infringing copyright unless a valid licence is in place.
The number of trademark oppositions has jumped significantly in recent years according to information released by the UK’s Intellectual Property Office (IPO), in many cases by as much as 15-17 per cent each year. As such, bosses need to learn how to protect their brands.
Sophie Arrowsmith is a solicitor at Hamlins.