As the previous Bill finished earlier than expected, is it appropriate to adjourn?
Industrial Designs Bill, 2000: Report and Final Stages.
It is a matter for the House.
I am happy to wait for Deputy Rabbitte.
I move amendment No. 1:
In page 17, line 46, after "proceedings", to insert ", unless objection is taken thereto by a party to the proceedings".
Section 33(5) provides that, in proceedings before the High Court concerning rectification of the Register, the Controller may submit to the High Court a statement in writing signed by him or her instead of appearing and being heard by the High Court. In such cases, where the Controller submits a written statement in lieu of appearing in person, that statement shall be admitted as evidence in the proceedings. The amendment proposed by Deputy Rabbitte seeks the addition of the text "unless objection is taken thereto by a party to the proceedings" to the end of section 33(5). The addition of this text would effectively mean that the written statement provided by the Controller would not be deemed to form part of the evidence in proceedings where any party to the proceedings objects and that, in these cases, the Controller would be obliged to be present and speak at these proceedings.
I have considered further Deputy Rabbitte's comments on this matter since the debate during Committee Stage. I remain of the view that, for practical reasons, there should be no obligation on the controller to appear before the High Court in every proceeding relating to rectification of the designs register. The provision of a written statement of evidence signed by the Controller should be more than sufficient in the vast majority of cases. The current text of section 33(5) gives the High Court the power to direct the Controller to appear and be heard if it so wishes, despite the provision of such statements. This, in effect, means that any party to the proceedings can make an application to the High Court requesting the presence of the Controller at proceedings and the High Court will grant this request if it considers it appropriate.
I suggest that Deputy Rabbitte's concerns are accommodated on the basis that the High Court has the power to direct the Controller to appear. I ask the Deputy to consider withdrawing the amendment.
I see the import of the amendment now. The concern expressed by Deputy Rabbitte, giving rise to the amendment, is that the statement shall be deemed to form part of the evidence. In other words, the statement could be taken as evidence without the opportunity being given to an offending party, or to the other side, to cross-examine. In his reply, the Minister of State said that the High Court may order the Controller to be present. The Controller would have to be present in a High Court action, particularly where the court will make a direction. I heard what the Minister of State said but, if he will not accept the amendment, it is important that, at least, the law would recognise that the production of a written statement, however certified that statement might be, might not be sufficient, in certain circumstances, without the opportunity to ask questions and conduct a thorough oral examination. I am concerned but, having regard to what the Minister of State said, if he will give an assurance that this point will not arise, that oral evidence may be adduced in cases, I will not press the matter.
Amendment, by leave, withdrawn.
I move amendment No. 2:
In page 21, between lines 39 and 40, to insert the following:
"(5) The design right shall not apply to the use of a component part of a complex product for the purpose of repair of that product so as to restore its original appearance.".
During Committee Stage, I indicated that I had referred a proposal to the Office of the Attorney General for legal clearance to amend this Bill to facilitate liberalisation of the spare parts market in the law. Time constraints prevented the office of the Attorney General from providing drafting and legal clearance for a text to give effect to this proposal in time for a suitable amendment to be brought forward on Committee Stage. Since then, I have received confirmation from the Office of the Attorney General that the amendment I am now proposing to section 42 is in order.
Section 14 implements the provisions of Article 3.3 of the directive in respect of spare parts in general. There is then the matter of how we choose to treat spare parts when they are used for repair purposes in the new legislation. The provisions of section 14(1) would, if left unqualified, operate to protect spare parts when they are used for repair purposes. This would mean that manufacturers of, for example, motor cars, electrical goods such as fridges, washing machines, cookers etc., and a host of other consumer durables, would be empowered in the law to prevent smaller independent spare parts manufacturers from making and selling replacement parts for their products.
As I pointed out in committee, the existing Irish law on the protection of industrial designs is primarily set out in the Industrial and Commercial Property (Protection) Acts 1927 to 1958. There is some reference to designs in copyright law but it is not worth mentioning in the context of the use of spare parts for repair purposes. The 1927 Act contains a definition of "design" that does not explicitly exclude spare parts, whether or not they are used for repair, from the protection afforded by the Act. It excludes from the definition such designs as are "mere mechanical devices" or those that do not have aesthetic appeal. The only conclusion that can reasonably be drawn from an examination of the existing law, therefore, is that spare parts, including when used for repair purposes, are potentially capable of being protected under the current Irish law, where they meet the criteria set down in the 1927 Act. However, this matter is very unclear and results in an unacceptable level of uncertainty in Irish design law. We have now been presented, by virtue of the EU directive, with an opportunity to tidy up Irish law in this area and provide much needed clarity in the law.
As Deputies will be aware, there is a significant spare parts industry spread across all industrial sectors in Ireland and in Europe. In the motor car sector, there are many businesses currently involved in producing replacement parts such as car doors, car wings, mirrors and upholstery, to name but a few, active in the Irish market. Ireland does not have a significant primary vehicle manufacturing sector and, therefore, legislation to prevent the production by independent companies of replacement parts for cars would not operate in favour of Irish industry. Neither would it operate in the interests of Irish consumers, given that monopoly rights tend to produce pricing structures which do not operate generally in the favour of consumers.
My proposed amendment, which will have the effect of liberalising the market for spare parts production, is therefore in Ireland's strategic interests and in the interests of small and medium sized enterprises in Europe but, most of all, in the interests of consumers. We debated this at some length on Committee Stage and, as I recollect, Deputies Flanagan and Rabbitte welcomed this approach. Having clarified our objective, particularly from a consumer point of view, I ask the House to support the amendment.
I have no difficulty in supporting the amendment. For clarification purposes, could the Minister of State give a practical example of how the amendment might apply to a day to day business transaction?
People are not being denied the right to register their spare parts, but we cannot stop independent car parts manufacturers. This applies to parts for the purposes of restoration work. In a sense, we are giving the spare parts industry a boost. In relation to car parts, while we cannot, under design law, allow a person to simply copy a car, we can liberalise the regime in relation to spare parts. The car is really the best example of that.
It is still not very clear to me. As a practical example, is the Minister saying that a radiator grille for a Mercedes Benz can be produced in a workshop in Ballydehob for the purposes of repairing a car? Is that the explanation?
It would apply where a car part is needed – for example, if a car door handle breaks, it has to be replaced. That is the type of situation we are dealing with.
Amendment agreed to.
I move amendment No. 3:
In page 30, line 30, after "location" to insert "if to do so would divulge the identity of confidential informants".
Section 62(4) provides that a witness giving hearsay evidence to the effect that infringing material may be found in a particular location shall not be obliged to indicate the source for that information. This provision protects the identity of those persons who supply information to design right owners as to where infringing products or articles are to be found. Such protection would be necessary in cases, for example, where an employee informs the registered proprietor of a design that his or her employer is infringing the design right in that design or in cases where an informant might fear reprisals. It also permits persons close to a piracy operation to report such activity to the authorities, without fear of being identified. In many cases, piracy operations are run by organised criminals who would not be unknown to take reprisals against an informant if they knew that person's name and address. It is considered that the provision will encourage people to assist in countering design rights infringement – an identical provision to the current text, as passed by the Oireachtas, as section 132(4) of the Copyright and Related Rights Act, 2000, in respect of copyright work.
As agreed on Committee Stage, I looked again at the amendment put forward by Deputy
Rabbitte regarding section 62(4) and I remain of the view that the proposed amendment does not add anything to the effect or the intention of this subsection as it stands. It may complicate matters for witnesses and deponents seeking to give evidence revealing the illegal activity in question by forcing them to reveal their informant's identity where the information was not necessarily given in confidence. This could involve the identification of a company's systems for monitoring its intellectual property rights and reveal the mechanisms employed in enforcing intellectual property rights, thus enabling infringements to remain one step ahead of detection. In any case, the call as to whether an informant's identity would be revealed by virtue giving evidence could be a difficult one to make for an ordinary person who is not legally qualified and even for the legal profession itself. If even one such call was made in error and resulted in a breach of that confidentiality, it is likely that this provision would not ever be trusted again and would be rendered useless.
As a result of these complications, it is better to have a broad unambiguous clause to protect the identity of all informants in this highly sensitive area and other provisions of the Bill allow abuses of this provision to be dealt with through the award of damages. For those reasons, I cannot accept the proposed amendment.
I thank the Minister for his detailed note. I apologise to the House for being late; Dublin traffic accounts for it. Having heard the Minister's note, the main point with which I am concerned is that if I was to give the analogy of a District Court in a similar situation, I think it is protected by something along the lines that a garda may give evidence to the effect that his informant is a confidential source and it is taken as such. The point was that this provision should not apply unless it was to protect a confidential informant because it goes too far as it stands. If it resulted in divulging the identity of a confidential informant, obviously, that would not be acceptable. I take it from the detailed note the Minister put on the record that he is not minded to accede to it at this stage but I would like to hear from him again.
Deputy Rabbitte, are you withdrawing amendment No. 3?
I will withdraw it if the Minister stands by the note he put on the record. The alternative—
It might be foolhardy for the Minister to depart from his notes.
Notwithstanding what the Deputy said, it is better, and it is my advice, to have a broad unambiguous clause to protect the identity of all informants in what is a very sensitive area. The provisions in the Bill will clearly give protection to the kind of people to whom the Deputy referred.
Amendment, by leave, withdrawn.
I move amendment No. 4:
In page 30, to delete lines 36 and 37, and substitute the following:
"(b) the person had no reasonable grounds for such seizure.”.
Amendment No. 4 relates to section 62. As it stands, the test is very high, which is, effectively, to prove malice in terms of applications to the District Court for seizure of infringing articles or products. Section 62(5)(b) states: “the information on which the registered proprietor applied for the order was given maliciously.” I seek to insert an alternative which would read: “the person had no reasonable grounds for such seizure.” In all the circumstances, it softens the test a bit and it is more reasonable. Malice is very difficult to prove.
I remind the Minister that we had this same discussion on the Copyright and Related Rights Act. He ultimately ended up accepting a similar amendment from me, or else he drafted his own version of it. My note refers to section 133(12)(b) of the Copyright and Related Rights Act, 2000, which at least started life as an amendment by me. Either the Minister accepted it as we progressed through the Act or else he drafted his own – I cannot recall which. Again, the issue is the same – the test was malice. It would be far more reasonable in all the circumstances if the hurdle was reduced somewhat and the test was “no reasonable grounds for such seizure” because malice is very hard to prove. It is a very high test and I have some concerns about it.
There is a very important distinction here. The Deputy referred to the copyright legislation. In relation to copyright, we were talking about section 133(12), as he rightly said, and that dealt with where the person was involved in a direct seizure. This relates to section 132(5) if we look at the parallel situation in copyright where there is an application to the court for an order to search for and seize goods. I will take the Deputy through this again because we had some debate on it on Committee Stage.
Section 62(5) is concerned with those persons who are aggrieved by an order made by the District Court for the seizure of infringing products or articles. It provides that following the implementation of the order on the application of a person aggrieved by it, the court may award damages against the applicant for the order as it considers just where it is satisfied that no infringement of design right has been established and the information on which the design right owner applied for the order was given maliciously. In effect, a person who is wrongfully accused of the infringement of a design right has recourse to damages against the applicant where there is no infringement and the information was maliciously supplied. It is designed to discourage and prevent false accusations of piracy that may be purposely made in order to destroy a competitor's business or his or her reputation.
I have examined further the amendment resubmitted by Deputy Rabbitte in regard to subsection (5). The proposed amendment seeks to lower the thresholds set in the existing text to provide that damages may be payable where it is shown simply that the person reporting suspected infringing activity had no reasonable grounds for the seizure. It removes the need to prove that there was malicious intent in the reporting. This has the effect of exposing people who, in their own judgment and belief, are of the view that illegal activity is occurring to an award of damages against them even though they were acting in good faith and in the public interest.
The current text, which is aligned with that of section 132(5) of the Copyright and Related Rights Act, 2000, provides the possibility of rightful damages awards in cases of malicious reporting while not punishing good faith reporting by financial penalties. On Committee Stage Deputy Rabbitte referred to an amendment to section 133(12) of the Copyright and Related Rights Bill, 1999, along the lines of this proposed amendment, which was accepted by me during the passage of that Bill through the Dáil. That section was concerned with copyright owners entering and seizing illegal goods without making an application to the District Court. There is, therefore, a clear difference.
In the case of section 62 of the Industrial Designs Bill, an application must be made to the High Court in the first instance under subsection (1), upon which the District Court must be satisfied that there are reasonable grounds for believing that infringing products are being sold etc., prior to making an order for search and seizure. This is sufficient to address any concerns about the threshold test for damages in this case. Section 62 is the equivalent of section 132 of the Copyright and Related Rights Act, 2000, which was the subject of similar amendments from the Deputy which were rejected by the House on that occasion also. On that basis I cannot accept the proposed amendment. I hope I have clarified the matter.
One of the main planks of my argument was that it seems desirable that both codes ought to be similar. Both matters have to do with intellectual property in the broad sense of the term, and it seems that what was agreed in the Copyright and Related Rights Act ought to apply here. However, I accept the Minister of State's rebuttal of that argument.
Amendment, by leave, withdrawn.
I move amendment No. 5:
In page 37, line 23, to delete "is in force" and substitute "has been confirmed by the Revenue Commissioners".
This amendment relates to section 73 of the Bill, which has to do with infringing products being treated as prohibited goods. It relates back to section 73(1) which provides that the registered proprietor of a design may give notice in writing to the Revenue Commissioners that he or she is the registered owner and that under subsection (f2>b) he or she requests the Revenue Commissioners for a period specified in the notice to treat infringing products or infringing articles as prohibited goods. Section 73(4) states that provided the procedure in subsection (1) is adhered to and is in force – in other words, has legal effect – the importation of the goods etc. is prohibited. Whether it is adequate just to give such notice in writing and that once it is complied with it is taken to have legal effect, I seek to substitute the words "in force" with the words "has been confirmed by the Revenue Commissioners." I do not think that is an unreasonable test. We are talking here about the wing of the Revenue Commissioners which deals with customs and excise and the importation dimension. It is, therefore, fair to give the Revenue Commissioners some role in deciding whether to accept such a notice. It is not right that the customs law of the State can be set aside unilaterally or modified or altered in any fashion by a private entity. What can be the objection to requiring the Revenue Commissioners to state that it is so? It seems a reasonable check, given the general balance of the Bill. Given that the whole purpose of the section is to provide for the prohibition of the importation of infringing products, it seems a reasonable balance to require the Revenue Commissioners to state that they are satisfied that what it says is true.
The purpose of section 73 is simply to make it possible for a design right owner to give notice to the Revenue Commissioners in writing that he or she is the registered proprietor of a design and requesting them to prohibit the importation of infringing products or articles for a specified period, which may not exceed five years and which may not extend beyond the period for which design rights subsist. This provision is a general prohibition provision which would apply at the time of importation, but would also apply subsequently and enable the Revenue Commissioners or Customs and Excise to impound infringing products or articles found anywhere in the country during the specified period.
The subsection at issue, subsection (4), provides that when such a notice is in force third parties will not be entitled to import goods to which the notice relates except where the use is intended for private and domestic purposes. The amendment resubmitted by Deputy Rabbitte seeks the deletion of the wording "is in force" in line 1 of subsection (4) and its substitution with the wording "has been confirmed by the Revenue Commissioners." I reiterate that the wording "is in force" has been used with the purpose of taking into consideration the intention of subsection (2) which clarifies that the period for which the notice is to be in force shall not exceed five years and shall not extend beyond the period for which the design right is to subsist. To simply receive confirmation from the Revenue Commissioners that a notice has been given would not adequately implement the intention of subsection (2) as it would make it possible for notices under this section to be effective beyond the maximum period specified in that subsection. The subsection limits the effective period of the prohibition of importation. The Deputy's amendment would effectively remove, unintentionally, that limitation and prevent importation forever. The key point is that the subsection with which we are dealing is linked to subsection (2) in relation to time limits.
Deputy Rabbitte has made a reasonable point. The words "is in force" are somewhat unusual in legislation. I would press the Minister of State on what exactly is meant by "is in force" in this case. Does it mean having been received by the Revenue Commissioners, having been served on the Revenue Commissioners, having been confirmed by the Revenue Commissioners? It appears that a notice could be lodged somewhere and might not be given due consideration, might not even be subject to rigorous inspection, and yet be in force. The point Deputy Rabbitte makes is that at least there should be confirmation that the notice has been served, that it has been received, that such receipt has been accepted, and that this activates the process of the notice having the force of law. Perhaps it is a small point, but it is important that the Minister of State be clear as to the precise point when a notice is in force.
I agree with the arguments advanced by Deputy Flanagan. I still do not understand, despite the Minister of State's comments, how the point is unreasonable. The Minister of State is tying his rejection of the amendment to subsection (2). I am at a loss to understand the reason the amendment invalidates that subsection as that is not its intention. I do not understand how the time limitation would be affected by excising the words "is in force" and replacing them with "has been confirmed by the Revenue Commissioners."
The Minister of State deals elsewhere in the Bill with false or mischievous assertions. What is preventing anybody exercising the right conferred by section 73 wrongly or falsely? Once the person makes application to the Revenue Commissioners in writing, it is taken at face value. A number of matters derive from this. The one that is the focus of this discussion is subsection (4) which uses the somewhat unusual choice of words "is in force". I cannot see how the time limitation envisaged in subsection (2) would be damaged if the Revenue Commissioners were required to confirm that they had such a notice. I fail to make the connection. Perhaps it is straightforward; if so, the Minister of State might explain it.
The main point is that the wording in the amendment would interfere with the substantive issue, which is that the notice is in force. The net effect is that it is illegal to import. The amendment seeks to delete the phrase "is in force" and substitute "has been confirmed by the Revenue Commissioners." This is a crucial aspect of section 73 in that it refers to illegal importation. The words "in force" refer to the period of time specified in the notice by the rights order. This is the heart of the section and it is important that this language remains as it is. It provides the strength of the section and refers back to the per iod specified, which is part and parcel of this type of intellectual property legislation.
I still do not understand the rejection, but do not anticipate winning a vote on the matter.
With regard to requests, it appears to be a one way street. The applicant is making a request of the Revenue Commissioners, but it is already in force. It does not give the
Revenue any room to consider the request.
As the next section gives powers to Revenue to specify the form of notice they require, Revenue will be in control.
Amendment, by leave, withdrawn.
Amendments Nos. 6, 7 and 8 are related and may be discussed together. Is that agreed? Agreed.
I move amendment No. 6:
In page 40, to delete lines 29 to 34.
The amendment seeks to excise the subsection. Under this subsection, which relates to costs, the controller has the power in any proceedings before him to levy costs. In so doing his judgment appears to be on a par with that of a judge of the High Court. I wonder about the fairness of this provision. It seems especially unfair because further in the Bill the reverse is not the case. The controller is never liable for costs. This is expressly provided for in section 83 which states: "In proceedings before the courts under this Act, the Controller shall not be awarded costs and shall not be ordered to pay the costs of any other party."
If I am before the controller, he is allowed not only to make a quasi judicial decision on the matter before him, but he is also enabled, under this section, to levy costs against a party in the proceedings before him. When I go before the controller, therefore, I run the risk of him deciding against me, but he can also effectively fine me by way of this facility to raise costs. The controller, however, is protected against the reverse being the case. I am at a loss to understand the fairness or equity in the provision.
The next amendment would remove the controller's discretion to order security for costs. Its effect would be to state that this should be a function of the High Court alone. The excision of the relevant words would leave it to the jurisdiction of the High Court to make that decision.
Section 81 gives the controller the power to award costs and require a person to give security for costs. It also provides for the enforcement of an order for costs by leave of the High Court in the same manner as a court order. Subsection (1) empowers the controller to award any party to proceedings before him or her under this Bill such costs as he or she may consider reason able and to direct how and by what party the costs are to be paid. It is a standard provision in intellectual property law concerning proceedings before the controller.
Subsection (2) provides that certain foreign based parties may be required by the controller or, in the case of an appeal, the High Court to give security for the costs of the proceedings. It is likely that an order will be made under this section prescribing that if a person neither resides nor carries on business in Ireland or another member state of the European Union, the controller may require him or her to give security for the costs of any application or appeal falling within the terms of this Bill. The intention here is to ensure that Irish based parties are not subjected to incurring onerous legal costs in protecting their rights in circumstances where an order for payment of their costs on success in legal proceedings would not be enforceable. The lodgment of security by persons in the State would, at the very least, provide access to some recompense, if not all costs, where the foreign party refused to meet an order for costs made by the Controller or the High Court.
Subsection (3) allows discretion to the Controller or the Court to treat the proceedings as abandoned where security for costs, under section 81(2) is not provided. This means that where a foreign party institutes proceedings against an Irish person in relation to an infringement of a design right under this Bill and subsequently fails to provide the required security for legal costs the Controller or the High Court may strike out these proceedings. It is intended to prevent nuisance cases being taken against legitimate Irish users of designs.
The amendments put forward by Deputy Rabbitte seek to delete subsection 81(1) and to remove the references to the Controller in the other two subsections of the section. It is clearly the intention behind the amendments to take away any proposed role for the Controller in deciding costs in proceedings before him or her and in deciding on the issue of security for costs. These functions are currently allocated to the Controller in respect of patents proceedings in section 91 of the Patents Act, 1992, and in respect of trade marks proceedings in section 72 of the Trade Marks Act, 1996. I have not been made aware of any difficulties or particular problems with the operation of these provisions in practice.
The net effect of these amendments would be to have the High Court decide on all matters relating to costs in proceedings before the Controller. As pointed out during the debate on Commitee Stage, this would be a costly and possibly time consuming procedure for parties to hearings in the Patents Office to have to undertake. It would also be a backward step in the efficient operation of the adjudicatory procedures under intellectual property law. In any event, the Bill provides that any decision of the Controller, including decisions on costs, may be appealed to the High Court and, therefore, parties to pro ceedings before the Controller are not being denied access to justice or to a full hearing before the courts in matters of costs.
For these reasons and for reasons of consistency in the various areas of intellectual property law and procedures, I cannot accept these amendments.
Is the amendment being pressed?
I am persuaded by the Minister of State's eloquence.
Amendment, by leave, withdrawn.
Amendments Nos. 7 and 8 not moved.
Amendment No. 9 arises out of Commitee proceedings.
I move amendment No. 9:
In page 41, line 22, after "High Court", to insert "or the Supreme Court".
The Supreme Court is not adverted to in this section, as it stands. This is a serious deficiency because it allows the High Court to shut off an appeal on an important point, even though the Supreme Court might be willing to hear that appeal.
The effect of my amendment would be to allow the Supreme Court to give leave to appeal. That facility is in our justice system because High Court judges sometimes make mistakes. Sometimes the Supreme Court can be appealed to in order to give this right of appeal and I do not see why it is denied here. I do not know if this point was consciously thought about or not. It may merely be worded in this way because we have been talking about the High Court until now. The Minister for Public Enterprise recently accepted two similar amendments in two Bills processed by her Department. I cannot see why we should shut off the prospect of an appeal to the Supreme Court. This Bill appears to be constructed on the assumption that any person coming before the courts in these circumstances is the wrong doer. There may be exceptional circumstances where the Supreme Court would take a different view from the High Court. I ask the Minister of State to accept this amendment.
The Deputy's concerns will be met by the legislation. The purpose of section 84 is to make it clear that all decisions or orders made by the Controller of Patents, Designs and Trade Marks under this Act are capable of being appealed to the High Court. There are similar provisions in the Trade Marks Act, 1996, and the Patents Act 1992. Subsection 84(2) provides:
An appeal from any decision of the High Court under this section shall lie to the Supreme Court on a specified point of law by leave of the High Court.
The effect of the amendment proposed by Deputy Rabbitte would be that an appeal from a decision of the High Court under this section would lie to the Supreme Court on a specified point of law by leave of the High Court or the Supreme Court.
As I promised during the debate on Committee Stage, I referred Deputy Rabbitte's proposed amendment to section 84 to the office of the Attorney General. That office has confirmed that section 84 in its present form makes sufficient provision for the granting of leave to appeal to the Supreme Court since a High Court Order refusing leave would itself be capable of being appealed to the Supreme Court. The additional text proposed by Deputy Rabbitte is, therefore, redundant. There are similar provisions in other intellectual property legislation. The Deputy's concerns are met by this provision.
Amendment, by leave, withdrawn.
Bill received for final consideration and passed.
Sitting suspended at 6.50 p.m. and resumed at 7 p.m.