PLC Paper No. CB(1)118
(These minutes have been seen by the
Administration and cleared with the Chairman)
Ref: CB1/BC/15/96

Bills Committee on
Registered Designs Bill

Minutes of the Meeting
held on Friday, 2 May 1997,
at 4:00 pm in Conference Room B
of the Legislative Council Building

Members present :

    Hon CHAN Kam-lam (Chairman)
    Hon Mrs Selina CHOW, OBE, JP
    Dr Hon HUANG Chen-ya, MBE
    Hon Margaret NG
    Hon SIN Chung-kai

Members absent :

    Hon Ronald ARCULLI, OBE, JP
    Hon Ambrose LAU Hon-chuen, JP

Public officers attending :

Mr Augustine CHENG
Deputy Secretary for Trade and Industry
Mr Patrick NIP
Principal Assistant Secretary for Trade and Industry
Miss Elizabeth TSE
Principal Assistant Secretary for Trade and Industry
Assistant Secretary for Trade and Industry
Deputy Director of Intellectual Property (Acting)
Assistant Director of Intellectual Property
Mrs Teresa GRANT
Assistant Director of Intellectual Property (Acting)
Mr John WONG
Chief Intellectual Property Examiner (Acting)

Clerk in attendance :

Mrs Constance LI
Chief Assistant Secretary (Finance Committee)

Staff in attendance :

Mr CHEUK Wing-chuen
Senior Assistant Secretary (Finance Committee)2
Ms Kitty CHENG
Assistant Legal Adviser 2

I. Internal Discussion

The Chairman informed the meeting that four organizations had written to the LegCo Secretariat confirming that they did not have further comments on the Bill (LegCo Paper No. CB(1)1456/96-97(01)), while Design: Hong Kong indicated support of the Bill (LegCo Paper CB(1)1466/96-97(02)). Miss Margaret NG said that the Hong Kong Bar Association was still examining the Bill and would inform the Bills Committee if they had further comments.

2. Members noted that the Administration had provided information papers on the Law Reform Commission (LRC) recommendations, notification arrangements regarding transitional arrangements for designs registered in the United Kingdom (UK), the method of the public consultation exercise and major comments received on the draft Bill.

II. Meeting with the Administration

3. The Chairman welcomed representatives of the Administration to the meeting, and invited the Deputy Secretary for Trade and Industry (DS/TI) to brief members on the information papers.

Law Reform Commission recommendations

LegCo Paper No. CB(1)1429/96-97 (01)

4. DS/TI advised that the LRC recommendations for establishing a design registry in Hong based closely on the UK Registered Designs Act 1949 had been adopted by the Administration. As regards the transplant of the UK Design Registry database to Hong Kong to provide continuity of the system after July 1997, the process would take some time and the transitional arrangements were given in the information paper circulated to members. DS/TI also advised that the Administration had proposed to follow the international trend of formality examination system and the world-wide novelty standard rather than the substantive examination system and local novelty standard recommended by LRC.

Checklist of major comments received

LegCo Paper No. 1466/96-97 (01)

Compulsory licensing

5. Miss Margaret NG sought clarification on the decision of not including compulsory licensing provisions in the Bill. The Deputy Director of Intellectual Property (DD/IP) advised that there were no such provisions in other countries such as the United States, China and Germany, and that Australia also did not recommend to have such provisions. As the Administration did not consider there were special circumstances requiring compulsory licences other than for national security reasons (for which there were separate provisions in Part V of the Bill), it proposed to follow the international trend that proprietors should be given more rights of their industrial designs.

Registration database

6. The Chairman enquired about the time required to transplant the UK Registry database to Hong Kong. In response, DD/IP advised that the Administration had considered several options including purchasing the whole database from the UK Designs Registry. The Administration had decided after deliberations that the most convenient and effective arrangement was to build up the database gradually in the course of renewing registration of those UK registered designs at Hong Kong. As the registration certificates were valid for a period of five years, all existing registrations would have to be renewed within five years for continued protection in Hong Kong. The provisions under Clause 92 (Renewal of registration) should be adequate for the purpose.

Formality examination and public inspection

7. Dr HUANG Chen-ya asked about the formality examination arrangements and the type of registration records required for three-dimensional articles. DD/IP advised that in registering a design, the designs registry would require the applicant to submit photographs or drawings showing the different views of the design, but no substantive examination would take place to determine the novelty of such designs. To facilitate applicants and the public to search registration records, all registered designs would be classified into 32 categories in accordance with the Locarno Agreement. In response to members, the Chief Intellectual Property Examiner clarified that novelty was not restricted to the class of products registered, and the proprietor of the original design could seek remedies of imitations of his design. Disputes on novelty could be settled in court.

Registrable and unregistrable designs

8. Miss Margaret NG requested the Administration to explain the differences between "Unregistrable designs" and "Registrable but unregistered designs". In reply, DD/IP said this was the most complicated part of the subject of registered designs. Elaborating on the system, he advised that according to the current designs law (Cap. 44 and the 1949 UK Act), a design applied to an article giving it an aesthetic appearance would enjoy monopoly protection for 25 years if the design was registered. However, if the designer chose not to register his design, and if this was a two-dimensional drawing not for industrial use, the design could also have copyright protection as an artistic work for a term of the designer’s life time plus 50 years. Where the two-dimensional designs did not give an aesthetic appearance, copyright protection was also applicable. As copyright protection did not require registration and its protection period was much longer, some proprietors or designers might prefer not to register their designs on grounds that these were unregistrable designs. However, registrable but unregistered designs could only have a shorter protection period of 15 years.

9. To illustrate the system, DD/IP quoted the "Lego" case in which the Lego company claimed damages from a Hong Kong company for imitating Lego upon expiry of the then 15-year registration period, on the grounds that Lego should not have been registered under the designs law because it did not have an aesthetic appearance. The Lego Company argued that the Lego design should be treated as an artistic work instead and protected by the Copyright Law during the owner’s life time plus 50 years. After hearing, the court ruled that the design did have an aesthetic appearance and was therefore a registrable design. As the protection period of a registered design then was only 15 years, Lego could not enjoy monopoly right of the design after the protection period expired. There was therefore no infringement of rights by the Hong Kong company in this case.

10. Members expressed concern about the grey areas between the Copyright Bill and the Registered Designs Bill, especially with regard to the definition of registrable designs under the latter Bill. To reduce the ambiguity of copyright protection of registrable designs, DD/IP advised that the Administration would adopt a pragmatic approach to define registrable designs in the subsidiary legislation after the principal Ordinance was passed. The Administration proposed to specify in the regulations that a design applied on over 50 articles would be regarded as having undergone an industrial process and were registrable designs subject to the condition of having an ‘aesthetic appearance’. The design would be given protection for a period of 25 years if registered, or a reduced period of 15 years if not registered. On the reasons for a shorter protection period for registrable designs than that accorded under the Copyright law, the Assistant Director of Intellectual Property advised that monopoly rights of a design would be reduced once it had been exploited for industrial use. This would also apply to paintings or other two-dimensional drawings created for industrial uses. To remove the ambiguity, the Administration would propose a Committee stage amendment to the Copyright Bill to limit copyright protection for registrable but unregistered designs.

11. As to whether it was feasible to provide practical definitions on unregistrable designs, DD/TI said that there were no satisfactory definitions worldwide for unregistrable designs. DS/TI explained that this would be a very complicated task, and even the UK law was at present unclear in this respect. To define unregistrable designs in the current law would require very elaborated provisions and might unduly add to the volume and contents of the Designs law. In view of the urgency to introduce a Designs law in Hong Kong, the Administration proposed to deal with the localisation of law first, and to leave the more difficult parts on unregistrable designs to a later stage. Should there be disputes as to whether a design was registrable or unregistrable, it would be settled by the courts.

Impact on copyright of artistic works

12. Mrs Selina CHOW asked whether the proposed legislation would erode the copyright protection of artistic works. In response, DD/IP elaborated on the intellectual property protection system. He said that intellectual property could broadly be classified into three major categories. The first category was industrial property which included patents and designs, the second category covered literary and artistic works and the video and audio productions derived from these works, and the third category comprised trade marks. Unlike industrial designs, an artistic work usually took a long time to derive a profit, and was therefore given a longer protection period. Whether or not an artistic work was also a registrable design under the designs law would depend on the intention of its creation, that is, whether it was for industrial uses. If the original intention of an artistic creation was subsequently changed to industrial uses, then its original copyright protection would be cut down. This was the principle behind the designs law internationally.

13. In response to Dr HUANG Chen-ya and Mrs Selina CHOW who sought further clarifications on the copyright protection in respect of artistic works applied on commercial products, DD/IP advised that the principle described above would apply. As regards the counting of protection period in these cases, DD/IP advised that, amendments would be introduced to the Copyright Bill to cut down copyright protection of the artistic work from the date of its registration as an industrial design or, in the case it was unregistered, from the day it was applied on industrial products. In response to Dr HUANG, DD/IP agreed to consider if the counting of the protection period for these cases could be specified in the Copyright Bill.

14. Mr SIN Chung-kai asked the Administration to use the popular cartoon "Lion King" as an example to illustrate how the existing intellectual property laws could at various stages protect the monopoly rights of the author whose literary work had been used for cartoon production, video and laser copies and other theme products such as cups and plates. In response, DD/IP advised that the creation of an animated character as an artistic work under the protection of Copyright Law was known as "character merchandising". As an artistic work, it could enjoy copyright protection for a term of the artist’s life time plus 50 years. The character could also be presented in the form of an industrial design, such as stuffed toys, which if registered, would have 25 years protection under the Designs law. In the case of "Lion King", the story itself was a literary work protected by the Copyright law. The author could license the adoption right of the story for a fee for the production of a film or for other forms of utilization such as the production of video and audio tapes. As a copyright holder, the author could have a share of the profit for any economic gains generated from the literary work. This would also apply to other artistic works such as books and paintings. These circumstances were covered by the Copyright law.

Tangible rights and intangible rights

15. On the question whether the copyright of a painting would still rest with the artist if the painting itself had been sold for a profit, DD/IP pointed out that it would depend on the terms of the transaction. In some cases, the purchaser could have just paid for the physical or tangible value of the painting but not its copyright which is an intangible property right. While both tangible and intangible property rights could be traded or inherited, the intangible property right, such as copyright, often had a greater value and was limited to a specified period of time. DS/TI added that under the TRIPS Agreement, its member countries might stipulate in law that the original proprietor of a painting could have a share of the profit if the painting was sold again for a greater profit.

Imitating an unregistered design

16. Mr SIN Chung-kai asked whether imitating an unregistered design was illegal. DD/IP replied that since the unregistered design had made its appearance first, it had novelty over the imitated design. Under the proposed legal framework, an unregistered design could be eligible for 15 years protection and the owner of the unregistered design could claim damages for imitations. Various methods on proofs could be employed to determine the inception date of an unregistered design and it would be up to the Court to decide on the priority of an unregistered design. Illustrating on the method of proof, DD/IP said that some designers might put their design blueprints in envelopes and mail them back to themselves, or deposit their designs at the Designs Centre of the Hong Kong Productivity Council.

III. Date of Next Meeting

17. The Committee would hold its next meeting on Thursday, 15 May 1997, at 4:30 pm to examine the Bill clause by clause and discuss the Committee stage amendments to be proposed by the Administration.

18. The meeting ended at 5:20 pm.

Provisional Legislative Council Secretariat
6 August 1997

Last Updated on {{PUBLISH AUTO[[DATE("d mmm, yyyy")]]}}