Circuit layout rights and how to protect them

Circuit layouts are two-dimensional layout designs or plans (topographies) of three-dimensional integrated circuits used in computers and equipment that relies on computers (such as modern cars, televisions, washing machines, and medical devices).  Circuit layouts are sometimes referred to as computer chip or semi-conductor chip designs.

In Australia, the protection of intellectual property rights subsisting in circuit layouts is governed by the Circuit Layouts Act 1989 (Cth) (Act).

When do you have a circuit layout right?

Under the Act, circuit layout rights commence automatically upon the creation of the plan or design.  In this respect, this type of intellectual property right which operates similarly to copyright.

As with copyright, you do not need to register your right or pay any associated fees to obtain protection.

For intellectual property rights to subsist under the Act, the layout or plan must be original and either:

  • made by an Australian citizen, resident, or body corporate, or a citizen, resident, or body corporate of an eligible foreign country, or
  • commercially exploited in Australia or in an eligible foreign country.

An eligible foreign country is one with laws that confer on Australian citizens or residents the same rights in that eligible foreign country in relation to circuit layout rights as conferred by Australian laws.  The Circuit Layouts Regulations 1990 (Cth) provides for the eligible foreign countries.  At present, this includes all members of the World Trade Organization.

What does protection confer on the owner?

The Act provides that the owner of the rights in an eligible layout, during the protection period of the layout, has the exclusive right:

  • to copy the layout, directly or indirectly, in a material form;
  • to make an integrated circuit in accordance with the layout or a copy of the layout; and
  • to exploit the layout commercially in Australia.

Commercial exploitation may occur by importing, selling, hiring, or distributing a layout or an integrated circuit made according to the layout.

As a proprietary right, the owner of a circuit layout right also has the exclusive right:

  • to obtain a court order to stop another person from infringing upon their circuit layout rights;
  • to grant a licence to another person to exploit their circuit layout rights, in return for licence fees, royalties, or other payments;
  • to sell their circuit layout rights; and
  • to give away their circuit layout rights to someone else.

How long does protection last?

Under the Act, the protection of circuit layout rights lasts for at least ten (10) years from the creation of the plan or design.

If the owner commercially exploits the circuit layout right during that initial ten (10) year period from creation, the protection extends for ten (10) years after the calendar year in which the plan or design was first commercially exploited.

For example, if someone were to create an original circuit layout design eligible for protection under the Act today, they would automatically receive ten (10) years of protection.  If that same person waited until the year after next to commercially exploit that design, they would receive a fresh ten (10) year period of protection from the following year, providing them with a total of thirteen (13) years of protection under the Act.

When does someone infringe upon a circuit layout right?

Under the Act, someone will infringe on a circuit layout right if, during the protection period of the layout and without the licence of the owner of that right, they:[1]

  • copy, or authorise the copying, of the layout in a material form;
  • make, or authorise the making of, an integrated circuit made in accordance with the layout; or
  • commercially exploit, or authorise the commercial exploitation of, the layout in Australia if the person knows or ought reasonably to know, that they are not licensed by the owner of that right to do so.

In response to allegations of infringement upon an owner’s circuit layout rights, one may rely on an exception under the act, such as:

  • innocent commercial exploitation, where the person did not know, and could not reasonably be expected to have known, that the circuit was unauthorised;[2]
  • copying for private use;[3]
  • copying for research or teaching purposes;[4]
  • copying for evaluation or analysis;[5] or
  • use for purposes of defence or security.[6]

Key takeaways

While similar in some ways, owners of circuit layouts are conferred specific rights and protections that last for a comparably shorter period to copyright.  The fact that the timeline to create and commercialise circuit layout plans or designs is relatively short makes it even more essential that people operating in this space are cognisant of their legal position to better strategize to secure the maximum level of protection.

If you deal with circuit layouts in your business as an owner or licensee, we encourage you to get in touch to see how we may be able to assist you to better protect your rights.

Further references

Related legislation

Circuit Layouts Act 1989 (Cth)

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Written by

Mitchell Willocks

Mitchell Willocks B.Bus., LL.B., GDLP., LL.M., MQLS
Associate
t: +61 7 3221 0013
e: mwillocks@dundaslawyers.com.au

 

 

Key contacts

Malcolm Burrows

Malcolm Burrows B.Bus., MBA., LL.B., LL.M., MQLS
Legal Practice Director
t: +61 7 3221 0013
e: mburrows@dundaslawyers.com.au

 

 

Disclaimer
This article contains general commentary only.  You should not rely on the commentary as legal advice.  Specific legal advice should be obtained to ascertain how the law applies to your particular circumstances.

[1] Circuit Layouts Act 1989 (Cth) s 19.

[2] Ibid s 20.

[3] Ibid s 21.

[4] Ibid s 22.

[5] Ibid s 23.

[6] Ibid s 25.

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