Fraudulent imitation

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.[1] 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.

AU 121344
AU 121344

Construction of the design

Besanko and Middleton JJ endorsed the trial judge’s principles for construing the design, summarising them at [28]:

(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[2] and which were taken by Bluescope, leading to the finding of obvious imitation.[3] Three points of note on these parts of the case.

First, at [51] 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.[4]

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 [89]:

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 [198] to [201] 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.

Fraudulent imitation

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 [17]:

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 [36], 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 [115]:

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 [118] 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.

BlueScope Steel Limited v Gram Engineering Pty Ltd [2014] FCAFC 107

  1. 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.  ?
  2. Full Court at [63], [71] – [72] (Besanko and Middleton JJ), [163] – [181] (Yates J).  ?
  3. Full Court at [89] – [93], with a useful summary of the key principles at [82] (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 [188]ff (Yates J).  ?
  4. Yates J to similar effect at e.g. [166], [174].  ?

A designs case!

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). [1] 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. [2] 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.

Fraudulent imitation

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 [17]) be based on or derived from the registered design or (at [19]) make use of the registered design.[3] 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 [382]:

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.

Gram Engineering Pty Ltd v Bluescope Steel Ltd [2013] FCA 508

  1. The test for validity in Designs Act 1906 s 17(1) here and infringement, s 30, here.  ?
  2. An example of the prior art relied on:
    One of the prior art examples
    One of the prior art examples


  3. Indeed, at [35] the High Court said:

    “…. 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”.  ?

Down the proverbial Technicon

Technicon has lost its appeal from trial findings that it infringed both Caroma’s registered design for a toilet pan and the copyright in drawings in technical specifications.

This was a case under the old (1906) Act rules. The trial judge found there were sufficient differences to avoid liability for obvious imitation. However, there was a strong finding of fraudulent imitation. The trial judge found that Technicon at least had reason to believe or strongly suspect that Caroma’s product was protected by a registered design:

  • Caroma’s brochures for its product range included warnings that the products depicted in the brochure were protected by design registration
  • As reported, there seems to have been fairly strong evidence that Technicon based its product on Caroma’s design
  • Technicon was familiar with the design registration process and had used it itself
  • Technicon’s product development appeared to have skipped the usual detailed design drawing/prototype process.

Technicon did not challenge these findings on appeal. Rather, it sought to persuade the Court that the differences in appearance were sufficiently substantial that the product was not an imitation. The Full Court gave this argument very short shrift.

The details on copyright infringement are a bit sketchy. It seems that section 77A would not have protected Technicon because its drawings were made before 17 June 2004 and so before s 77A took effect (see item 19). I will have to think about that further.

Given the finding of design infringement and the rejection of the claim to additional damages for copyright infringement, the point may well be rather academic.

Technicon Industries Pty Ltd v Caroma Industries Ltd [2009] FCAFC 76

and at first instance: Caroma Industries Ltd v Technicon Industries Pty Ltd [2008] FCA 1465

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