ITMA 322 APRIL 2005

would be off the hook in relation to the prior disclosure,
because, in contrast to the old law, the
Regulations provide for a grace period of one year
during which prior use of the design by the design
owner does not destroy the necessary element of
‘novelty’.
s2(2) European Communities Act 1972
In support of its argument Oakley looked at s2(2) of
the 1972 Act:
2(2) Subject to Schedule 2 to this Act, at any time after
its passing Her Majesty may by Order in Council, and any
designated Minister or department may by regulations,
make provision-
(a) for the purpose of implementing any Community
obligation of the United Kingdom, or enabling any such
obligation to be implemented, or of enabling any rights
enjoyed or to be enjoyed by the United Kingdom under or
by virtue of the Treaties to be exercised; or
(b) for the purpose of dealing with matters arising out of
or related to any such obligation or rights or the coming
into force, or the operation from time to time, of subsection
(1) above; …
Oakley submitted that s2(2) of the 1972 Act gave the
executive a limited power to implement Community
obligations, but only where those obligations were
clear and would involve no element of policy making.
Policy making of any kind, said Oakley, is the sole
prerogative of Parliament. In exercising the option to
derogate from the Directive and deciding that the
new design law would not apply to certain registered
designs, Oakley contended that the ambit of s2(2) had
been exceeded and that Regulation 12 was therefore
ultra vires and should be struck out. The effect of
striking out Regulation 12 would be to make the
Regulations applicable to all design registrations –
past and future – with the result that Oakley could
take advantage of the extended grace period.
Animal argued that a proper interpretation of s2(2)
showed that the Secretary of State was perfectly within
her powers when she chose to exercise the option,
and that regulation 12 was therefore valid.
Decision at first instance
The case was heard at first instance by Peter Prescott
QC 3 . In a judgment dated 17 February 2005 4 he held
that, in so far as the Secretary of State had by the 2001
Regulations exercised the option to retain existing legislation
in relation to old registered designs, she had
acted ultra vires. He found that Regulation 12 was not
valid under either s2(2)(a) for the purpose of “implementing
any Community obligation” or “enabling
any such obligation to be implemented”. Nor could it
be allowed under s2(2)(b) in relation to “dealing with
matters arising out of or relating to” any such obligation.
His reasoning for this decision was based on his
opinion that the decision left open by the Directive
was a “significant policy choice” which “had to be
implemented by primary legislation”.
Despite finding that Regulation 12 was ultra vires,
the judge refused to sever it from the remainder of the
Regulations. He reasoned that this would bring into
3 Sitting as a Deputy High Court Judge of the Chancery Division.
4 [2005] EWHC 210 (Ch)
DESIGN & COPYRIGHT
force Regulations which the Secretary of State had not
intended to pass.
English law governing severance is clearly established
and the basic principle is that subordinate legislation
will be held invalid as a whole if it contains a
provision which is ultra vires. One of the few exceptions
that may prevent a provision being struck out is
where a court can remove the offending matter and
be satisfied that it is causing no change in the substantial
purpose and effect of the impugned legislation.
Where it cannot be so satisfied, it may not strike
out the offending provision – the whole piece of legislation
must be taken together and treated as invalid.
Peter Prescott QC concluded that the removal of
Regulation 12 would indeed be effecting a change in
the overall purpose and effect of the legislation, and
necessarily arrived at the conclusion that the 2001
Regulations were invalid as a whole.
This decision could be classified as something of a
pyrrhic victory for Oakley. Although Oakley needed
Regulation 12 to be found ultra vires, this finding in
itself was of no use if Regulation 12 could not be severed
from the rest of the Regulations. The finding that
the entire Regulations were invalid meant that the
position reverted to what it was before the introduction
of the Regulations – the applicable law was therefore
the 1949 Act, and precisely what Oakley wanted
to avoid!
Both parties appealed. Animal argued that Mr
Prescott was incorrect to find that Regulation 12 was
ultra vires and Oakley appealed on the basis that,
although it was correct to find that Regulation 12 was
ultra vires, the judge had been wrong to say that
Regulation 12 could not be severed.
Court of Appeal
The Secretary of State also appealed that decision and
was represented in the Court of Appeal by the
Attorney General himself, Lord Goldsmith QC. The
appeal opened with the Attorney General’s submissions
on validity, on which topic he was supported by
Animal. By taking the validity issue first, if the earlier
court’s findings were found to be incorrect and the
Regulations were in fact valid, there would then be no
need to look at the severability point central to
Oakley’s appeal.
The case was heard in the Court of Appeal by Lord
Justices Waller, May and Jacob, with the leading judgment
being given by Waller LJ. In a judgment published
on 20 October 2005, all three judges agreed that
the findings of the lower court should be reversed.
They held that the 2001 Regulations, including the
provisions in Regulation 12 relating to the continuing
validity of old law, were validly passed and were not
ultra vires.
The basis for the decision differed slightly from
judgment to judgment. It is common ground between
them, however, that the decision to opt out of the
Directive for the purposes of Regulation 12 lay firmly
within the realm of the Secretary of State’s powers
under s2(2) when creating subordinate legislation
Continued on page 14
December 2005 ITMA Review 13