Why an entitled person is important - the Designs Act 2003 (Cth)

Section 13 of the Designs Act 2003 (Cth) (”the Act”) specifies who is entitled to be registered as the registered owner of a design.  Those people include:

• (a) the person created the design (the designer);
• (b) if the designer created the design in the course of employment, or under a contract, with another person-the other person, unless the designer and the other person have agreed to the contrary;
• (c) a person who derives title to the design from a person mentioned in paragraph (a) or (b), or by devolution by will or by operation of law;
• (d) a person who would, on registration of the design, be entitled to have the exclusive rights in the design assigned to the person.

 

Incorrectly identifying the entitled person can have severe consequences, as a certified registered design may be revoked by a Court under section 93(3) of the Act if:

• one or more of the original registered owners was not an entitled person in relation to the design when the design was first registered; or
• each of the original registered owners was an entitled person in relation to the design when the design was first registered, but another person or persons were entitled persons in relation to the design at that time.

Nb: original registered owner, in relation to a design, means each person entered in the Register as the registered owner at the time the design was first registered.

 

The Court’s findings

Mr Collymore’s employment contract did not specify whether he or Metroll would own any designs or inventions he created which related to Metroll’s business.  Metroll argued that its ownership of the designs should be implied, because Mr Collymore created the design “in the course of his employment”.  The Court disagreed with Metroll.  Instead, the Court accepted Mr Collymore’s evidence that he created the designs outside of the course of his employment.  The Court also accepted Mr Collymore had told Metroll that he owned the designs and that he proposed to charge Metroll a royalty for the use of his modular tank designs. 

 

Evidentiary issues

The Court rejected various pieces of evidence given on behalf of Metroll as to what was discussed in certain meetings regarding the creation and ownership of the designs.  In particular, evidence was given for Metroll from one person that a “tank-making team”, of which Mr Collymore was said to be a part, was given instructions to create the tank designs.  However, that evidence was not corroborated by anyone else who was said to be part of the “tank-making team”.  The Court said

“Their absence is unexplained, and I infer that none of those witnesses would have provided evidence helpful to Metroll.” (at [34]).

 

Conclusions

In practice, a design application may proceed to registration in a matter of weeks if registration of the design is requested at the time of filing the application.  It is therefore very important to know who is an entitled person(s) under the Act before filing any design application.  If an entitled person is left off or incorrectly included in an application, the design application could quickly proceed to registration and may ultimately be susceptible to revocation. 

 

Of course, ownership of intellectual property should always be clarified as early as possible, such as by including relevant provisions in employment contracts. 

 

This case also shows that when ownership of intellectual property, such as designs, inventions or copyright, is unclear, people’s recollections of discussions which took place many years before may become very important in resolving any ownership dispute.  If contemporaneous notes of relevant conversations and meetings exist, such documents may end up being very important when people have different recollections of what was previously discussed.

 

A further point to be taken from this case is that design registrations may provide effective protection of designs which, at least at first glance, look relatively simple.

While the two countries treat each other in the same way when it comes to cross-border court proceedings, this legislation will enable closer integration of the two civil justice systems.

Some important measures in the Bill include:

1. Simplifying the service requirement for civil court proceedings.  For instance the new legislation will enable a statement of claim filed in a court to be served on someone in New Zealand as of right and visa versa. A plaintiff will no longer be required to prove a connection between the proceedings and New Zealand, or to seek leave of the court.
2. The New Zealand Bill and its Australian equivalent will adopt a common give-way rule for deciding which country’s court should hear a dispute. The current problem of courts in New Zealand and Australian applying different tests to decide this issue leading to unnecessary expense and uncertainty will hopefully be ameliorated.
3. The Bill will expand the range of Australian court judgments that can be enforced in New Zealand, and simplify the process for enforcing them. Currently, only final money judgments from one country may be enforced in the other. This Bill extends this to include final non-money judgments, such as an injunction. The only ground for not enforcing an Australian judgment will be public policy.  However, it will continue the case that any challenge to the merits of a judgment will meed to be raised with the original court.
4. The Bill also introduces new measures to improve regulatory enforcement. New Zealand and Australia both have a strong mutual interest in the integrity of trans-Tasman markets and the effective enforcement of each other’s regulatory regimes. The bill will allow all Australian civil pecuniary penalties to be enforced in New Zealand, unless they are specifically excluded from the regime. The parallel legislation in Australia contains mirror provisions.
5. The Bill will also allow criminal fines to be enforced in the same way as a civil judgment debt is but only in respect of those regulatory regimes that affect the integrity, effectiveness, and efficiency of trans-Tasman markets.
6. Finally the Bill will simplify the conduct of court proceedings in various ways including through the use of technology.

In this case, the statement of novelty was to the shape and configuration of the upper layer of the mattress portion of the mattress and base as indicated by the beading as shown in the representations.  A representation of the registered design is shown below.

When considering the prior art, Jessup J paid particular attention to the upper layer of the prior art mattress portions in finding that the prior art mattresses were not anticipatory.

In considering whether the respondent’s beds infringed the design registration, His Honour confirmed that the Court must be informed by the nature and extent of the differences by which the registered design was differentiated from the prior art, and noted this was:

pre-eminently a case in which, for that reason, small differences in shape or configuration will enable an article to escape a finding of infringement (emphasis added).

His Honour went on to find that only two of the respondent’s beds infringed the applicant’s design registration.  An injunction restraining sales of those two beds was granted to the applicant, along with an order for an account of profits.

The importance of the statement of novelty in defining the scope of a registered design is illustrated in this decision, as is the potential for a Court to disapprove of a design owner who tries to downplay the significance of a statement of novelty when infringement proceedings arise.

In Dart Industries Inc v Decor Corp Pty Ltd (1989) 15 IPR 403 Lockhart J referred to the principle that:

Small differences between the registered design and the prior art will generally lead to a finding of no infringement if there are equally small differences between the registered design and the alleged infringing article. On the other hand, the greater the advance in the registered design over the prior art, generally the more likely that a court will find common features between the design and the alleged infringing article to support a finding of infringement.

The Full Court in this case noted that the trial judge had found the design in suit to represented a clear advance over the prior art and accordingly:

his Honour held that it was necessary for Technicon to demonstrate a greater degree of difference between the Technicon Pan and the Design in order to establish that there had been no infringement. Contrary to Technicon’s submissions, the primary judge’s approach to the relevance of the prior art (at [30]) was orthodox.

This approach seems to go a step further than the principle enunciated by Lockhart J such that the scope of the monopoly of a design is not merely assessed in light of the prior art but defined by it. The decision suggests that, at least in the context of assessing fraudulent imitation, any impugned design which is closer in appearance to the registered design than the closest prior art must be an infringement.