D15.1 Overview

Date Published

Section 50 of the Designs Act 2003 (Cth) provides that an owner can offer to surrender their design at any time. The consequence of surrender is revocation of the design. Where the surrender is associated with entitlement of the registered owner, the surrender can also be the prelude to the filing of a new design application under s 54. However, revocation does not follow automatically – the decision to accept the offer and revoke the design is in fact a discretionary power.

An offer to surrender a design is uncommon. In particular, where an owner has lost commercial interest in their design, there is no need or requirement for them to offer to surrender the design – as it will inevitably lapse in due course by merely doing nothing (even if a third party requests examination). It can thus be assumed that an offer to surrender a design has been driven by commercial or legal considerations (typically not visible to the Registrar) and that there is probably a third party that has some interest in the surrender.

Illustrative of situations where an offer to surrender might be made are:

  • There have been threats of infringement action, with counterclaims of invalidity in the design. The parties agree to settle the litigation by surrendering the design.
  • There has been an allegation that the owner is not an entitled person, with or without a proceedings being commenced under s 51. The parties agree to settle the litigation by surrendering the design – so that a new design can be applied for under s 54.
  • A person buys a license from the owner. The owner, having received payment, offers to surrender the design so that other people can freely use the design.
  • The design forms the basis of a security that has been registered (e.g. there is a registered mortgage on the design). The owner, getting into financial difficulties, decides to have the design go into the public domain rather than have it transferred to the mortgagor.

As a surrender may affect the interests of third parties, the surrender mechanism includes a number of safeguards for third party interests. In particular:

  • The Registrar must notify each person entered on the Register as having an interest in the design, of the offer to surrender. [s 50(2)(a)] An advertisement in the Australian Offical Journal of Designs (AOJD) does not meet the requirement for notifying these persons; they must be notified directly, and they then have one month in which they can make submissions about the surrender. [s 50(2)(b)]
  • The offer to surrender must be advertised in the AOJD, and any interested person can request to be heard. [regs 4.11(3) and (4)]
  • A design cannot be surrendered if there is a compulsory licence in effect. [s 50(5)].
  • If there are concurrent court proceedings in relation to the design, the Offer to Surrender cannot be accepted without the consent of the court and all parties. Note that the court proceedings could be in respect of any matter relating to the design, and not just proceedings for infringement, revocation, or validity (compare with the dictionary definition of ‘relevant proceedings’).

Because of these issues, all requests to surrender a design are to be referred to Hearings.