ACIP came up with 23 recommendations. For the most part, the Government accepted ACIP’s recommendations. Those accepted include:
introducing a 6 month grace period before filing an application for registration, with a requirement that an applicant relying on the grace period provide a declaration to that effect (recommendation #12);
introducing a prior user defence (recommendation #12);
retaining the requirement of distinctiveness in s 19 in its current form (recommendation #10);
not introducing an unregistered design right (recommendation #22);
allowing amendment of a statement of newness and distinctiveness up until certification (recommendation #11 – “in principle”);
not extending the maximum term of a registered design from 10 years to 15 years unless Australia decides to join the Hague Agreement (recommendation #3) as to which IP Australia should investigate further and continue to monitor usage by our major trading partners;
changing the name of a registered, but uncertified, design to something less misleading like “uncertified design” (recommendation #4);
retaining the current requirement that a design be registered for the whole product, while investigating further whether allowing partial product registrations would substantially advantage Australian applicants and does not give rise to substantial practical or legal issues overseas (recommendation #13);
correcting a miscellany of anomalies (including conferring power on exclusive licensees to being infringement proceedings) (recommendation #18), but aligning s 71 with the exclusive rights granted by s 10 is not necessary as the current position has not given rise to any problems and fixing the anomaly would create uncertainty and could have unintended effects (recommendation #17).
The Government has specifically rejected introducing customs seizure provisions for infringing products in line with the regimes currently in force for other intellectual property rights. This:
would pose a range of practical difficulties, and would be resource intensive for the Australian Border Force (ABF) to implement.
Moreover, design owners can currently obtain orders from the Courts which ABF could act on to prevent release of particular imported products.
A number of other recommendations were noted (such as requiring examination to be requested by the first renewal period and introducing an opposition system following certification). The Government considers action on these should await IP Australia’s further investigations into whether Australia should join the Hague system for international registration.
Another recommendation “noted” was the recommendation to improve the process for multiple design applications by reducing the fees. This needs to be considered “further in the context of IP Australia’s current fee review, to be completed in 2016.”
For the full response to all recommendations, go here (pdf).
The Productivity Commission of course is going to say “Don’t do it” – much louder than that! See chapter 10. ?
Although s 10 confers the right to authorise exercise of an exclusive right, authorising someone to do an infringing act is not itself an infringement under s 71 and, of course, what is required for liability at common law for directing or procuring and infringement is so much clearer following Keller. ?
The battle between Gram Engineering and Bluescope is continuing: this time Jagot J has ruled that Gram’s managing director (and sole shareholder), Mr Mann, may have access to financial information Bluescope has been required to make available.
Following the Full Court’s ruling that Gram’s design for its steel fencing panel was valid and Bluescope had infringed that design, Bluescope has been required to provide an affidavt disclosing its sales, revenues and costs so that Gram can make an informed election whether to seek damages or an account of profits. Bluescope claimed confidentiality in the information and Gram applied for permission to disclose the information to Mr Mann so that Gram could make an informed decision.
Jagot J was not at all inclined to accept that most of the information was confidential in the sense of requiring stringent protection: it related to the period 2005 – 2010 and was largely stale. However, some more recent information relating to the period 2013 – 2015 could be fairly regarded as sufficiently current and confidential to warrant protection.
However, confidentiality alone is not enough to resist production. Where the information is relevant, a balancing exercise is involved.
Jagot J accespted that the relationship of the proposed disclosees to the discloser’s trade competitor was highly relevant, especially where the disclosees owed fiduciary obligations to the trade competitor (and so putting them potentially in a position of conflict of interest).
Here, however and unlike the cases Bluescope relied on, Gram was not a large company with a large (executive) staff. Mr Mann was the managing director and sole shareholder. It was “not difficult to infer that he was [Gram’s] controlling mind.” He was the person who would have to make the decision whether to proceed with a claim for damages or an account and he could not make that decision without access to the relevant infromation.
The Advisory Council on Intellectual Property (ACIP) has released an options paper for arising from its Review of the (Registered) Designs System.
The Options Paper identifies 3 potential routes for further development of designs law in Australia.
Option 1 would involve addressing a few specific issues in how the 2003 Act works without revisiting the policy settings. This could involve:
making the identity of Convention applicants consistent with the rules on entitlement;
expanding the rules on priority claiming so that differing formal requirements between jurisdictions do not disadvantage Convention applicants;
bringing the rules on entitlement into line with the Patents Act;
expanding the prior art base so that it is not just limited to the product the subject of the application;
expanding the situations where fraud, false suggestion or misrepresentation can be invoked for revocation purposes;
allowing exclusive licensees to sue for infringement;
making it clearer that a registered, but uncertified, design does not confer enforceable rights until certification;
removing the option to publish a design instead of registering it;
reducing the fees for multiple designs included in a single application; and
addressing anomalies that have arisen in the copyright-design overlap, especially in relation to 2D and 3D ‘embodiments’.
Option 2 would include the changes identified under Option 1, but going further to bring Australian law more into line with “major trading partners and international treaties”. That could involve amending the Act to allow accession to the Hague Agreement. Changes could involve:
extending the term of protection from 10 years to 15 including introducing a require to obtain certification on renewal after the first 5 years and a system of opposition following certification
introducing a grace period of 6 months
deferring publication to registration
introducing customs seizure provisions
Option 3 is summarised in the Executive Summary as:
a wholesale revision of the role of the designs system in Australia’s IP law, including consideration, in particular, of the need for unregistered design protection, and the scope of design protection (including the scope of secondary liability) in the context of technological developments such as 3D scanning and printing. This would also involve consideration of whether protection should be extended to partial designs and whether virtual or non-physical designs (such as screen displays and icons) should themselves be treated as products.
ACIP appears to consider Option 3 would be appropriate if the policies reflected in the 2003 Act no longer make sense or have been superseded. Examples where this might be the case include unregistered design right, full copyright proection regardless of industrial application or broader rights such as allowing registration for parts of products, such as handles, rather than for products as a whole.
The impending availability of 3D-printing, or at least its more widespread take up, is raised as a potential basis for pursuing option 2 or option 3.
ACIP does note that going down the path of Option 3 (at least) would involve costs as well as benefits and concludes:
ACIP does not presently have evidence sufficient to suggest that wholesale change would be in the national interest. ACIP envisages that Option 3 would involve consideration, not only of the designs system per se, but how it interacts with other systems: most obviously the copyright system, but also standard and innovation patents and other systems such as protection for confidential information. Ideally, such a review would also involve gathering more detailed evidence on Australia’s industrial and economic strengths, and developing strategies for industry development in the field of design, as well as more information on the operation of systems, such as those in operation in some European countries, which do not exclude industrial design from the copyright system. Such a review ought to be undertaken by specialist intellectual property economic, business and legal analysts.
In formulating these proposals, ACIP has taken into account responses to a survey it conducted as well as submissions.
ACIP would like to receive your submissions on these submissions on their return from the Christmas/Summer holidays: i.e. 23 January 2015.
The Full Court has dismissed both Bluescope’s appeal and Gram’s cross-appeal from the ruling that Bluescope infringed Gram’s registered design for the Smartascreen fencing panel.
This is an “old Act” case. At first instance, Jacobson J held that Bluescope’s product was an obvious imitation of Gram’s registered design. However, his Honour rejected the allegation that it was also a fraudulent imitation.
Bluescope (then Lysaghts, part of BHP) had long been the market leader for fencing made from metal sheeting. There was a problem, however: one side of the fence was less desirable because the posts and rails supporting the cladding were visible. Gram came up with its Gramline solution which was symmetrical, looking the same from both sides. It quickly usurped Bluescope’s position as the market leader. Bluescope then spent (roughly) 6 years trying to come up with a competing design. In the course of doing so, it rejected a number of alternatives in favour of one that so closely resembled Gram’s product that the two could be stacked one on top of the other.
Construction of the design
Besanko and Middleton JJ endorsed the trial judge’s principles for construing the design, summarising them at :
(a) a design is the mental picture of a shape, configuration, pattern or ornamentation of the article to which it is to be applied;
(b) construction is a question of fact for the Court to determine by the eye alone;
(c) expert evidence may be led to assist the Court;
(d) the Court is to apply an ‘instructed eye’ to the design – that is the Court must be made aware of the characteristics of the article to which the design is applied, and the manner in which such articles would normally be found in trade, commerce and in use; and
(e) however, considerations of utility have no relevance to the proper construction of a design.
In applying those principles, the trial judge found
“the primary feature was the sawtooth pattern consisting of six identical repeating pans, oriented vertically. The sawtooth pattern was the product of the unique proportions of the wavelength, amplitude and angles of each sawtooth module”.
It was this combination of features, which contributed to the symmetricality of the product, that ultimately conferred the design with novelty and which were taken by Bluescope, leading to the finding of obvious imitation. Three points of note on these parts of the case.
First, at  Besanko and Middleton JJ rejected Bluescope’s challenge to the trial judge’s reliance on Gram’s design being viewed vertically as an in-fill sheet between posts so that the saw-tooth ran top to bottom:
While considerations of utility are not relevant, designs cannot be construed without context. It is often the case that features of the article to which the design applies, will serve both visual and functional purposes. Where this is the case, the implication of BlueScope’s submission is that the feature’s appearance and utility must be divorced. However, a design without context is a meaningless drawing. As Lockhart J observed in Dart Industries 15 IPR 403 at 408, the design is ‘the mental picture of the shape, configuration, pattern, or ornament of the article to which it has been applied’ (emphasis added). It is inescapable that the Design is for sheet metal fencing and the construction of the Design must reflect this.
That is, because the design was for a sheet metal fencing panel which “worked” in one way, it should be interpreted in the way (presumably) those who would use it for that would understand it.
Secondly, the trial judge had not impermissibly referred to the fact that the Bluescope product could be “nested” with the Gram product (embodying the design). But, it was not the fact of “nestability” as such that was important. Rather, it was relevant because it was helpful in forming a view about the similarity of the sawtooth profile. Besanko and Middleton JJ explained at :
the nesting qualities are instructive. As has been discussed at length, the combination of amplitudes, wavelengths and angles create the sawtooth profile. For the GramLine and Smartascreen sheets to nest, albeit imperfectly, they must by logical extension, have similar amplitudes, wavelengths and angles. This is clearly helpful in deciding if Smartascreen is an obvious imitation of GramLine, and it was entirely open for the primary judge to be assisted by the nesting properties of the two articles. It is further relevant because as noted above, an obvious imitation is not one which is the same as the design, but one that is an imitation apparent to the eye notwithstanding slight differences.
Care definitely needs to be taken with this as the physical embodiment of the registered design is not always the same as the design and the comparison must be between the accused product and the registered design. It is important to note, therefore, that the Full Court treated this as confirming or reinforcing the view based on comparison of the appearance of the infringing article to the registered design.
Thirdly, the Full Court considered the trial judge had impermissibly taken into account Bluescope’s commercial objectives – to introduce a product to compete with the Gramline product – in deciding whether or not the Smartascreen was an obvious imitation. With respect that must be right as the test of obvious imitation is an objective test based on visual resemblance. Yates J, however, was prepared to accept at  to  evidence such as that Bluescope was attracted to the design because “it had a similar appearance to the GramLine sawtooth profile and would gain ready market acceptance” as a kind of expert evidence about the similarity of Bluescope’s product to Gram’s design.
In Polyaire, the High Court rejected the interpretation of fraudulent imitation which had required the alleged infringer to have attempted to disguise its copying. Instead, the High Court had said at :
the application of a “fraudulent imitation” requires that the application of the design be with knowledge of the existence of the registration and of the absence of consent to its use, or with reason to suspect those matters, and that the use of the design produces what is an “imitation” within the meaning of par (a). This, to apply the general principle recently exemplified in Macleod v The Queen, is the knowledge, belief or intent which renders the conduct fraudulent.
At , the High Court approved Lehane J’s formulation of the test for fraudulent imitation in the following terms:
[T]he essential questions are, first, whether the allegedly infringing design is based on or derived from the registered design and, then, whether the differences are so substantial that the result is not to be described as an imitation. ….
In this case, the trial judge considered that fraudulent imitation required a finding that the infringing product was deliberately based on the registered design. The Besanko and Middleton JJ endorsed that test at :
In our opinion, it must be shown that there was deliberate, in the sense of conscious, copying for there to be fraudulent imitation. If imitation imports the notion of making use of the registered design, there must be at least a conscious use of the registered design before it could be concluded there was fraudulent imitation.
The trial judge had found that:
Bluescope knew the Gramline design was registered;
Bluescope knew that Gram had achieved runaway commercial success with its product;
Bluescope was trying to design a “Gram lookalike”;
Bluescope had come up with a number of different symmetrical designs to Gram’s design, but rejected those in favour of the Smartascreen design; and
Bluescope had adopted a panel size of 762mm which was the same as Gram’s but different to the standard 820mm panel prevailing in the industry at the time.
His Honour was also “sceptical” of Bluescope’s claim that the resemblance to Gram’s design was coincidental. Gram argued that, given these findings, what other conclusion could there be but deliberate copying.
The Full Court upheld the trial judge’s refusal to find the Smartascreen was deliberately based on the Gramline design. Two factors seem to have played an important role here.
First, the Full Court accepted at  that an allegation of fraudulent imitation was a serious matter and the level of proofs needed to reflect the gravity of that.
Secondly, the evidence showed that the Bluescope employees who came up with the final design from 2000 onwards were influenced by, or at least referred to, design work done by a Mr Field in 1996.
Mr Field did not give evidence so it was not clear on the evidence what influences or references he made use of. Now, in many cases, the unexplained failure of a key player in the design process to give evidence (especially when there are inferences (at least) suggestive of copying available) might be sufficient to give rise to a Jones v Dunkel that the witness could not say anything helpful to the defendant’s case. Here, however, Mr Field’s absence was explained: he was old and in very poor health. His design work had taken place in 1996 very early in the picture. Moreover, Bluescope’s product had been introduced in 2002. Gram had of course known about it pretty much straightaway, but had delayed until 2010 before taking action. One may speculate, therefore, that the Court was not willing to allow Gram the benefit of negative inferences when its own delay had contributed to the witness being unavailable.
Given the transitional provisions, there are potentially almost 6 more years for designs for designs under the old Act to still be in force. Design applications that were pending on 17 June 2004, when the 2003 Act came into force, continue to be governed by the old Act’s provisions for validity and infringement unless they were “converted” to “new” Act designs. ?
Full Court at ,  –  (Besanko and Middleton JJ),  –  (Yates J). ?
Full Court at  – , with a useful summary of the key principles at  (Besanko and Middleton JJ). There were differences between the Smartascreen’s appearance and the registered design, but these were treated as insubstantial:  (Besanko and Middleton JJ) and ff (Yates J). ?
ACIP has released an options paper on what to do about the innovation patent system.
An innovation patent is a uniquely Australian contribution towards encouraging innovation. You can get one (if you apply for it) for pretty much anything unless it differs from the prior art only in ways that “make no substantial contribution to the working of the [ahem] invention” as explained by the Full Court in the Delnorth case.
As recounted in the options paper, the basic objective of the innovation patent system is to encourage and promote investment in innovation by Australian (especially) SMEs.
The options paper is full of interesting statistics and there is an accompanying economics paper, the Verve report attempting to get some empirical data. For example, only about 25% of innovation patents ever get certified. Also, more than 50% of innovation patents are allowed to lapse by the end of their third year. The proportion of innovation patents granted to foreigners is 35% and rising.
Insofar as the options paper takes a position, it would seem that there is pretty much universal agreement that the level of innovation required to get an innovation patent is too low.
The options paper also appears to discern evidence that innovation patents are being used “strategically” or “tactically”, at least by some applicants.
ACIP is now seeking your views on what to do.
ACIP itself identifies 3 broad options:
(1) do nothing (option A);
(2) abolish the innovation patent system (option B); or
(3) change the innovation patent system (option C).
Option A: do nothing
ACIP notes that it is too soon to tell how the Raising the Bar reforms will affect those seeking innovation patents. Those changes do nothing, of course, to the level of “innovative step”.
The Verve report received 517 responses to its survey of the 3,195 Australian inventors who have taken out innovation patents to protect their “inventions”. Bearing in mind that these are the people that the innovation patent system is supposed to be encouraging, ACIP notes:
The Verve survey has shown that individuals and SME user-groups appear to be generally satisfied with the innovation patent system—albeit this survey occurring prior to the full impacts of the Raising the Bar Act being felt by users of the system.
The biggest problem with this do nothing option, however, is that it doesn’t do anything to address the apparently widely recognised issue that the innovation threshold is too low.
As ACIP notes, letting people get an innovation patent in Australia for something which is not patentable anywhere else does nothing to encourage Australian businesses to compete overseas. It should also be borne in mind that an innovation patent over something will probably have the effect of meaning its price will be higher than it would otherwise have been.
Option B: abolish the innovation patent system
There is a nice catalogue of what one might think were compelling reasons why this is a good option. There is also a summary of arguments against it.
This (or a variation on it) is widely perceived to be the option proposed late last year by IP Australia. The options paper indicates that the majority of non-confidential submissions to IP Australia and to ACIP didn’t support IP Australia’s proposal.
The options paper also includes a curious page suggesting that the designs registration system could be amended to permit the registration of functional designs. I (perhaps mistakenly) had thought the Franki Committee’s recommendations were implemented by the Designs Amendment Act 1981 s 11 (inserting new s 18) and s 5 (inserting a new definition of ‘design’) and find their current embodiment in s 7(2) of the Designs Act 2003. The “problem”, if it be a problem, with designs registration is that it protects only the visual appearance of a product, not its function. The new Act doesn’t seem to be any different in that respect to the old Act and it was plainly a deliberate policy choice.
Option C: change the innovation patent system
The problem here, at least insofar as the level of innovation is concerned, is what should that new level be and how on earth would the Courts ever work it out. ACIP plainly didn’t like the suggestions of the Law Council, IPTA or FICPI on this front.
The options paper also raises for further consideration changing or limiting the remedies: no injunction or no interlocutory injunctions, but continued exposure to pay damages or account for profits; limiting the ability to recover pecuniary remedies to the period after certification. Oh dear!
ACIP would like to hear your views by 4 October 2013. It is also planning to hold workshops for public consultation during September.
Patents Act 1990 s 18(2) and (3) exclude some things from patentable subject matter and, apart from the level of innovation prescribed in s 7(4), there are a few other largely technical requirements to satisfy too. ?
See e.g. recommendations 24, 25 and 26 of the ALRC’s Designs report. Of course, the limitation of the designs registration system to visual appearance only seemed to be one of the main complaints about the system identified by the ALRC: see e.g.2.44 of the ALRC’s report and 3.49 and 6.5. ?
Well, a patents and designs case, but really it’s a case about entitlement: Kenny J has upheld the validity of patents and registered designs for “beer taps” which one company in the Fosters group – Foster’s Group Ltd – applied for “most likely [by] mistake” as one of its subsidiaries, Fosters Australia, was the owner.
Fosters Australia commissioned another party to design some new beer taps for it, on terms that it would own the resulting IP.
When the applicatins for the patents and designs were filed, however, they were filed in the name of Fosters Group Ltd, Fosters Australia’s parent and the holding company of the group.
When the mistake was discovered, Fosters Group assigned everything to Fosters Australia. By then, however, the designs had been registered in Fosters Group’s name, although innovation patent applications were still pending.
Fosters Australia has sued Cash’s for infringing its patents and designs. Cash’s defences asserted invalidity on the basis, amongst other things, that Fosters Group was not an entitled person or the grant was obtained by fraud, false suggestion or misrepresentation.
Kenny J rejected the attack on the patents on the basis that s 29 did not require an applicant for the patent to be the entitled person or someone claiming through him or her; it was necessary only that the patent was granted to someone who qualified under s 15. Kenny J further held that Fosters Group could assign the benefit of its applications to Fosters Australia.
Similar reasoning would apply to the designs s 21 and s 13, but the designs were already registered before Fosters Group assigned its rights to Fosters Australia. However, Kenny J found in circumstances that Fosters Group held the applications and registrations on constructive trust for Fosters Australia.
Patentology makes the point that, while all’s well that ends well, care needs to be taken in deciding who should make the application before it is filed.
Jacobson J has found that Bluescope’s “Smartascreen” metal fencing panel infringed Gram Engineering’s Registered Design No. AU 121344 for a fencing panel as an obvious imitation. Perhaps the most interesting finding, however, is why the Smartascreen was not a fraudulent imitation.
Gram’s design was registered in 1994, so this is an “old Act” case (invalidity here and infringement here).  At the time, it was the first fence panel to feature a symmetrical design: looking the same no matter which side of the fence it was viewed from and, as a result, it was a roaring success capturing some 40% of the market. One interesting aspect of the case is that Bluescope’s Smartascreen product was introduced in 2002. Although Gram Engineering knew about it from around its introduction, it did not commence infringement proceedings until 2011 – after the registered design had expired in 2010.
Bluescope’s attack on validity failed.  First, the prior art on which Bluescope relied were for roofing or siding panels, not fence panels, and so not relevant articles. Moreover, the prior art and the registered design had the same general “z-shape”, but were intended to be used horizontally (“weatherboarding) rather than vertically and none had the same combination of 6 panels with the same proportions and angles as the registered design. Hence, while some features may have been present in some of the prior art, none of the prior art included all the features and the registered design looked distinctively different.
Jacobson J then found that the Smartascreen was an obvious imitation: the dominant feature was the same sawtooth look with the (unique) 6 panel frame in the same proportions and with the same angle.
On this question, Jacobson J found that Bluescope:
knew that the design was registered;
knew that Gram had achieved runaway commercial success
was trying to design a “Gram lookalike”
had come up with a number of different symmetrical designs which were different to Gram’s design
and had adopted a standard panel size of 762mm (which matched Gram’s physical embodiement) instead of the more typical 820mm panel size.
In these circumstances and given his Honour’s finding of striking similarity, Gram Engineering argued it was inconceivable Bluescope had not copied Gram’s design and so a finding of fraudulent imitation should follow.
However, Jacobson J considered that fraudulent imitation required a finding that Bluescope’s design had been deliberately copied from the registered design. This may prove to be a considerable narrowing of the requirement in Polyaire that the accused product (at ) be based on or derived from the registered design or (at ) make use of the registered design. It was, however, decisive. His Honour was not prepared to find that either of the key designers who came forward did deliberately copy. It was here that Gram Engineering’s delay in bringing proceedings came back to haunt it. As his Honour explained at :
It is a conclusion which I have reached with some reservation because the striking similarities to which I referred above were not satisfactorily explained in Bluescope’s evidence. I have no doubt that the drawing of 17 November 2000 was designed to look something like the Gram product. It was, as Gram submitted, designed with an eye to the GramLine sheet. However, it is plain that Mr Field was involved in the process. This appears from the concluding remarks of his memo of 15 November 2000. Ultimately, it is his absence from the witness box which precludes me from reaching the view that the process of designing a Gram lookalike was one which entailed copying the Gram design.
The Mr Field in question was unable to give evidence at this stage in view of his advanced age (being retired) and illness.
If his Honour had been prepared otherwise to find fraudulent imitation, however, the fact that it had obtained advice that its product did not infringe the registered design would not have saved it.
“…. The kind of fraud that the Act seeks to remedy is closer in kind to, but is still not entirely analogous with, equitable fraud, which, for its establishment, does not require that an actual intention to cheat must always be proved; proof of misconception of the extent of a person’s obligation, to act or to refrain from acting in a particular way, may suffice”. ?
The Federal Court, Spender J, has allowed Courier Pete’s appeal from the Registrar’s ruling that, while Courier Pete owned ARD 310528, ARD 312217 and 312218 were owned by Metroll.
Section 13 of the Designs Act 2003 prescribes who is entitled to a design.
Collymore was employed by Metroll as its factory foreman making water tanks and the like. The Registrar found that it was no part of his duties to be creating new designs for rainwater tanks and Collymore had in fact made the first design on his own time at home. Hence, following an assignment to Collymore’s own company, Courier Pete, Courier Pete was the owner. However, the Registrar found that Collymore made the two later designs pursuant to an order from his boss at Metroll, Mr Harland. Thus, the Registrar found that Metroll was the owner.
Spender J upheld the Registrar’s finding in relation to the first design. (A significant factor in this was Metroll’s failure to call the other members of the tank making team to back up Mr Harland’s claim that the team was working on the design before the application to register the first design was lodged.)
Spender J considered that Mr Harland’s direction to Mr Collymore to make up what became the second and third designs had to be considered in all the circumstances. On the evidence, his Honour found that Mr Collymore had made it clear before he agreed to carry out Mr Harland’s direction that he, Collymore, would do so only on condition that he retained ownership in the designs and Mr Harland accepted that a royalty would be payable on use of the design. Thus, he retained ownership.