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Wednesday, September 24, 2014

Green on both sides of the fence: design protection then and now

By Julia Kovarsky, Lawyer

Although the Designs Act 2003 (Cth) (the New Act) has just passed its 10th birthday, there remain approximately 7000 registered designs still in force under the old regime, governed by the predecessor Designs Act 1906 (Cth) (the Old Act). The New Act broadened the scope of design protection to restore designers' faith in the system but BlueScope Steel v Gram Engineering shows that even under the Old Act, design protection can still be commercially valuable.


Born on the bad side


The case revolves around the solution to the 'vexing problem' faced for years by backyard owners around Australia - the fact that their fences had a 'bad' side. One solution was developed in 1993 by Mr Mann, Managing Director of Gram, who designed a fencing sheet with a sawtooth profile which looked the same from both sides and thereby had two 'good' sides. Gram registered its design under the Old Act and began very successfully producing GramLine fencing. In 2002, BlueScope began producing its own two-good-sided fencing under the name Smartascreen. Gram commenced proceedings against BlueScope in 2011 claiming under the Old Act that the Smartascreen was either an ‘obvious’ or ‘fraudulent imitation’ of its design. BlueScope cross-claimed, challenging the validity of the design.


Sawtooth panel profile valid


Under the Old Act, a design could be registered if it was new or original. A design would not be new or original if it only differed 'in immaterial details or in features commonly used in the relevant trade' from the prior art, or was an obvious adaptation of a prior design. The threshold under the New Act sounds similar – a registrable design must be 'new and distinctive when compared with the prior art base for the design' – but similarities between a design and any prior art are given greater weight than differences; the bar has been raised.

Both the primary judge and the Full Court agreed that the relevant principles for determining whether a design was new or original were:

(a) there must be something special or distinctive about the appearance which captures and appeals to the eye;
(b) there must be substantial novelty having regard to the nature of the article to which the design is to be applied;
(c) determining whether a design is new or original involves a comparison between the design and the prior art as necessary;
(d) it is not possible to define the degree to which the design must differ from the prior art – it is a question of fact for the Court to determine;
(e) one must look at the prior art and the design as a whole when comparing them.

The most prominent feature of Gram's design was identified as the sawtooth pattern, produced by the unique proportions of the wavelength, amplitude and angles of each sawtooth module, repeated six times and oriented vertically. BlueScope, however, denied that the sawtooth design was new and put forward a number of items it contended were relevant prior art which deprived the GramLine fencing of its novelty. It was argued that each piece of prior art revealed a feature which was replicated in the design, the combined effect of which meant that the design was not new or original. The Full Court however, disagreed. Besanko and Middleton JJ made clear that the general appearance of the design and prior art must be compared, rather than their constituent elements. The main features of the design were found by Justice Yates to contribute materially to its overall appearance and differ in substance from the prior art. The design provided a novel solution to a longstanding problem, one not disclosed in the prior art and deserving of protection.

Old designs still have bite


The question of infringement under the Old Act focuses on whether the registered design, or any fraudulent or obvious imitation of it, was applied.  While often both fraudulent and obvious imitation are pleaded because of the different scope of activities caught by each, only one needs to be proven to make out a case for infringement.

There are three main differences between a fraudulent imitation and an obvious imitation:

(a) a fraudulent imitation does not need to correspond so closely to the registered design as would an obvious imitation;
(b) fraudulent imitation requires that the application of the design be made with knowledge of the existence of the registered design, or with reason to suspect it but may include modifications to the design intended to disguise the imitation; and
(c) fraudulent imitation must be deliberately based upon the registered design. The subjective actions of the alleged infringer, in basing their design on the registered design, are therefore more significant that the visual differences.

While Gram succeeded in proving that the Smartascreen was an obvious imitation of the GramLine design, it could not prove that Blue Scope knowingly created a fraudulent imitation.

An obvious imitation does not have to be identical to the registered design, but must be 'a copy that is apparent to the eye notwithstanding slight differences' when the features of the design are examined and a visual comparison made.

In deciding that BlueScope's Smartascreen was an obvious imitation of the Gram design, the court took into account the visual similarities of the two fencing panels. Another relevant factor was that the two types of panels could be nested together, suggesting that the combination of amplitudes, wavelengths and angles which created the sawtooth profile were similar. A consideration which Besanko and Middleton JJ found irrelevant was the commercial imperative for BlueScope to develop its design as a competitor to the GramLine fence.

Result


One of the major reasons for the New Act was to broaden design protection, as many users had become very frustrated with their designs being held to be valid but very rarely infringed. In this case, under the Old Act, Gram successfully proved that BlueScope infringed its valid registered design by creating an obvious imitation.

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