Part I: Design stage. By John Coldham, Tom Foster and Salmah Ebrahim.

In this three-part series, we journey through the process of design, from inception to exploitation and enforcement, considering the steps from the point of view of the designer and design-led business. This will not be a dry trawl through the case-law but a practical, end-to-end guide to designs.

Specifically:

I. Introduction

Design law does not see as much coverage as other intellectual property rights, such as trade marks and patents, but of late it is undergoing something of a renaissance, both in industry and in the courts. When the UK Government carried out a consultation on design law in 2012, it estimated that £33.5 billion was invested in design in 2008 - 2.4% of GDP.

Unsurprisingly, the government as such considered designs to be of utmost importance to the national economy. It went on to estimate that UK businesses invested a further £15.5 billion in design in 2009. The government's conclusion was that "businesses can use design rights and other intellectual property to protect their creativity, which in turn can lead to investment in new products, the promotion of innovation and can help to sustain growth". The result of the consultation was that protection of designs is key to the economy, and will drive future growth.

II. Design concept development

The legal protection afforded to design is of vital importance to any business engaged in the design of new products. It dictates how the business can protect its work from competitors and third parties while minimising the risk of infringing someone else's design, whether accidentally or not.

An understanding of design law, and its impact on the design process, is therefore crucial from the outset. The following explains how a business can manage its design process so as to protect its investment and minimise its risk.

A. Step 1 - Contracts

First, a business needs to ensure it owns the design. As obvious as this may sound, potential claims often fall at this first hurdle, particularly when contractors are involved.

For example, in the UK, recent changes mean that the commissioner of a design no longer automatically owns that design. Therefore, if a design consultancy is used it will own the design under UK law unless a consultancy agreement dictates otherwise. It is therefore vital that all third parties involved in the design process have signed an agreement with the business before work is commenced. The terms of the agreement will depend on its nature, but should generally include the following provisions: [1]

  • Transfer. A provision that all intellectual property - both existing and future - shall be assigned to and shall vest in the business. Note however that under UK law, a purported assignment of future registrable rights may operate only as a contractual right to call for that assignment once the right comes into existence. By getting its rights in place before work begins, a business can avoid delay and dispute further down the line. Local advice should be sought in respect of rights involving jurisdictions abroad.
  • Further assurance. A requirement that the contractor takes all necessary steps to perfect the above assignment (including signing documents to be filed with the relevant IP office). It may also be useful to oblige the contractor to assist the business in respect of any claims relating to the design.
  • Confidentiality. A requirement that the contractor documents all of its work properly and keeps all such documentation confidential. This is discussed further overleaf.
  • Originality. A requirement that the designs will be the contractor's own work (i.e. not copied from pre-existing designs).

Designs created by employees in the ordinary course of their employment will generally be owned by the business automatically. Nevertheless, provisions dealing with the ownership of designs should be spelled out in all employment contracts, as should an employee's obligations in respect of those designs. Not only will this clarify the business's legal rights, it will also put employees on notice of what is required of them, alleviating the risk of future disputes.

B. Step 2 - Document Design Process

Good practice during the design process is vital. Building on the contractual rights detailed in Step 1 above, the following procedures will help to protect the business's rights during the design phase, and enable it to enforce designs further down the line, should the need arise:

  • Documentation. Ensure each iteration is properly documented. Like any creative activity, product design does not follow a strict formula. The process is often complex, with input from a variety of sources being recorded on different media, from simple paper sketches through to detailed CAD drawings. It is important to ensure that each stage is documented as even the earliest paper sketches could ultimately prove invaluable.
  • If a competitor later claims that a product has been copied from one of its own designs, evidence of how the product was developed from an initial design concept could help to prove that no copying has taken place. Alternatively, if the business has had its design copied by a competitor, the development drawings may help to explain how the design is novel and original over prior designs, thus rendering it capable of attracting design rights.
  • The business may also have rights in the developmental designs, not just the end result, meaning that if an early iteration of the design has been copied (e.g. an ex-employee takes a concept to a competitor), the business can rely on the drawing of that early iteration. In an ideal world, all iterations should be recorded, with the drawings stored together in one location. The designers themselves should be encouraged, if not obliged, to record and store their ideas at the business's premises, or electronically on the business's server. Reliance on the memory of the designer is undesirable - particularly given the tendency of former employees to be unwilling to help.
  • Confidentiality. Ensure all documents are kept safe. The most effective method of protecting designs prior to publication is to keep them confidential. If competitors cannot get hold of a design, they cannot copy it. It is well-known that highly innovative companies such as Apple go to great lengths to keep their new designs confidential.
  • One should also bear in mind that unregistered design rights have relatively short lifespans, commencing when the design is made public (see below), so early disclosure could shorten the term of protection. The source of early disclosure is often the business's own employees. It is therefore important to implement safety measures and encourage good practice, such as encrypting laptops, avoiding travel with hard copy documents, and preventing employees from taking designs (even early sketches) with them when they leave the business.
  • Filing. Having an independent means of proving the date of a design drawing can be extremely useful, as the precise date of design could be very relevant if there is a need to enforce the designs later. There are various databases that offer third party verification of the date of a design drawing (for a fee), or the documents can be self-addressed and posted to rely on the postmark (only be sure not to open the envelope!).

C. Step 3 - Ensure design is original

Having invested time and money in developing its designs, a business will want the ability to protect its investment by relying on the underlying design rights. Only certain designs qualify for protection - it is crucial to ensure not only ownership of the designs, but also that the designs themselves are protectable.

Design protection covering the UK falls into two categories:

  1. UK and Community registered designs ("UKRD" and "RCD" respectively) and Community unregistered design rights ("UCD") must be "new" and possess "individual character" in order to qualify for protection. There is a good deal of law addressing precisely what is meant by this, but it can be summarised as follows:
    • Novelty. A design is "new" if no identical design or no design whose features differ only in immaterial details has been made available to the public before the relevant date.
    • Individual character. A design possesses "individual character" if it produces a different "overall impression" on an informed user relative to any prior design.
    • Overall impression. In assessing the overall impression, one must bear in mind the nature of the product to which the design is applied or incorporated, the industrial sector to which it belongs, and the degree of design freedom available to a designer of such designs.
    • Prior design. Designs made available to the public (within the UK or the EU depending on the geographical extent of the right) prior to the business's design will class as "prior designs" for the purpose of assessing novelty and individual character.
  2. For UK unregistered design rights ("UKUDR"), the position is different. Here, a design must be original (i.e. not a slavish copy of a prior design, or "commonplace" in the design field in question). The joy of UKUDR is that it does not require any action on the part of the designer for it to come into existence. Better still, it lasts much longer than UCD - 10 years from the end of the year in which it is first made available to the public, or 15 years from the date of design, whichever is shorter.

    The key to UKUDR is qualification. The right only exists if the qualification requirements are satisfied. It is important, therefore, that records are kept to demonstrate how the qualification requirements are satisfied, otherwise it can be difficult to prove later. The rules are quite complex, but for designs created since October 2014, the rules are essentially as follows:
    • Designers working for themselves and who are habitually resident in the UK, EU or another "qualifying country" (which include New Zealand, Hong Kong and various Caribbean islands) will qualify.
    • A company that employs the designer, and which is formed in a qualifying country and carries out a substantial amount of business in a qualifying country will qualify. There is no express requirement for the design part of the business to be in a qualifying country.
    • If neither of the two routes above work, the final option is if the product made to the design is "first marketed" in the EU. This is a way in for US and Asian (except Hong Kong) companies to obtain protection, but it does require the product to be launched in the UK or EU before their home markets.

If a business commissions a design, it does not matter whether it qualifies under the new rules that apply from October 2014 - it is all about the designer or the company which employs them. The key in these circumstances is for the business to ensure that it takes assignment of the rights that are created under the commission - the commissioner no longer attains it automatically.

With UKUDR (and UCD), parties should be sure to keep records about how they qualify for the rights. It is much easier to do at the time of the design than when the need to enforce them arises years later.

D. Step 4 - Avoid infringing third party designs

By infringing a third party's rights, a business exposes itself to being sued for damages and/or being restrained from marketing its own products (among other things). The risk of infringement can be greatly reduced by adhering to some straightforward (but often ignored) guidelines.

(I) Avoid copying

Ensure the design is original. Prior third party design documents will usually benefit from copyright protection, while unregistered design rights may subsist in both the design documents and the articles made to that design.
Unlike registered designs, which give monopoly-style protection (see further below), Community and UK unregistered rights (including copyright) are only infringed if they have been copied. In other words, if the business can prove it created a design independently it will not be liable for infringement of an unregistered design.

Of course, in reality, designers do not operate in a vacuum - they draw inspiration from the world around them, including other products. So to what extent can a design "take inspiration" from pre-existing designs?

  • Copyright. For copyright infringement, the whole or a "substantial part" of a design document must be copied. Copyright protects the expression of a design, not the idea behind it, so taking inspiration from part of a document without actually copying it will not usually be a problem. It should be borne in mind that the test is qualitative (and not quantitative), so copying the most striking aspect of a document will often result in infringement.
  • UKUDR. UK unregistered design rights protect the shape or configuration (whether internal or external) of the whole or part of an article, and are infringed when the design is copied so as to produce articles exactly or "substantially" similar to that design. A business therefore minimises its risk as it moves away from the shape and configuration of the original design (or any part of it). UKUDR only covers the shape - not the colour, material or surface decoration (unlike other design rights).

    This is particularly so as the issue of copying is often also determined with account to the similarity between two designs. For sufficiently similar designs, copying may even be inferred without direct evidence of any having taken place, and it is for the accused to prove it did not do so. The recent English High Court case of G-Star Raw v. Rhodi Ltd [2] serves as a useful reminder of the importance of keeping accurate records and having a reliable story to tell in order to rebut the inference of copying.
  • UCD. Community unregistered design rights protect the appearance of the whole or a part of a product resulting from the features, in particular the lines, contours, colours, shape, texture and/or materials, of the product itself and/or its ornamentation.

    A UCD can be infringed by any design with the same overall impression provided that the accused design results from copying. The business can therefore reduce the risk of infringement by moving the appearance of its design (in particular the lines, contours, colours, shape, texture and/or materials of the product itself and/or its ornamentation) further away from the original design.

    Intentional copying of a registered design, while knowing or having reason to believe the design is a registered design, is now a criminal offence in the UK. Copying should therefore be avoided at all costs. As a result, it is especially important that records are kept to show that no copying took place, and that (a) the business believes the registered design was invalid and/or (b) the business believes that the design it created did not infringe the earlier design. One way to prove this may be to obtain independent legal advice to this effect (although the courts are yet to determine what would be sufficient in this regard).

(ii) Clearance

Once a design has been arrived at, checks can be undertaken to minimise the risk of infringement. Clearance searches are difficult in respect of registered designs, as protection is not limited to any particular field. Therefore a decorative design on, for example, a wall clock could infringe a design registered in relation to a product in a different field, such as garden furniture. Further, a three-dimensional article can infringe a registered two-dimensional design.

One way to minimise risk is to consult with the designers and identify any designs or products used for inspiration. If there are apparent similarities then legal advice should be sought. Searches can be conducted to check if and when the prior designs had been registered and to help identify other relevant registered or unregistered designs. Searches for registered designs can be conducted at www.ipo.gov.uk/d-find-product.htm in respect of UK designs and www.tmdn.org/tmdsview-web/welcome for Community designs. It is advisable to instruct a solicitor or attorney to conduct such searches, if required.

Such searches not only help to minimise the risk of infringement but also help identify whether any prior designs may prevent design rights from subsisting in the business's designs as discussed in Step 3 above.

III. Design concept production

Assuming the steps in design concept development above have been followed, the business should now own a confidential design that is capable of protection and does not infringe third party rights. The next step is to consider the type and level of protection required.

Some rights will subsist automatically while others are only available via registration. For example, designs disclosed in the EU may automatically benefit from UCD and UKUDR. Any design drawings and any surface decoration may also benefit from copyright protection.

In addition to these automatic rights, the business may decide to seek enhanced protection by registering the design. This decision will hinge on many variables. The table on page 7 summarises some of the key attributes of Community and UK rights.

  Right Term What it Protects Copying Required to Prove Infringement?
If not registering UK Unregistered Design Right Shorter of 10 years from the first marketing of the product; or 15 years from creation of the design. The shape or configuration (whether internal or external) of the whole or part of an article (excluding mere surface decoration, which may be protected by copyright). Yes
  Community Unregistered Design Right Three years from the date the design is first publicised in the EU. The appearance of the whole or part of a product resulting from the features of, in particular, the lines, contours, colours, shape, texture and/or materials of the products itself and/or its ornamentation. This covers surface decoration. Yes
If registering Registered UK and Community Designs Up to 25 years (subject to five yearly renewal fees).   No

A. Step 1 - Decide whether to register

The following considerations are often pivotal:

  • Deterrence. Registering a design is an effective means of deterring would-be infringers. The design will appear on the register and the business can advertise the fact it enjoys registered protection on packaging and in literature. Some EU Member States - like the UK - have also made deliberate infringement of registered designs a criminal offence, which further enhances the deterrent.
  • Longer protection. UKUDR and UCD only offer 10 and three years' protection respectively, whereas registered Community and UK designs can confer up to 25 years' protection. Unregistered protection may therefore be sufficient for products with a short market life such as those in the fashion world.
  • Easier to enforce. There is no need to prove that the alleged infringer copied a registered design. Subject to some exceptions, infringement of a registered design (UK or Community) occurs when a third party uses a design which does not produce a different impression on the informed user, regardless of whether the third party copied or came up with the design independently.
  • Cost. The registration cost is much cheaper than that for patents or trade marks, particularly as a discount is given for multiple filings on the same day. The fees for registering a single UK design are being reduced significantly in 2016, so that a single design costs £50, but filing 10 at once costs £70, and filing each additional 10 designs costs an extra £20, making them £2 each [3]. An RCD can be registered for 350 euros, [4] and approximately half that amount for additional registrations.
  • Interim measure. Many businesses use registered designs as a stop-gap to provide some protection against infringers while their patents (which give much stronger protection) are being prosecuted.

B. Step 2 - Decide where to register

One of the first considerations should be where a business wants to protect its designs. This will largely depend on the geographical market in which the products are likely to be sold and the result of a cost/benefit analysis of whether wider territorial protection is desirable.

The business should ensure it seeks local advice in respect of key jurisdictions falling outside the scope of UK and Community rights. This is particularly so given the less generous grace periods of many non-EU jurisdictions, where they exist at all - for many countries, design protection is simply not possible if the design has already been made public, whereas in the EU there is a grace period of a year to file the application for protection, from the date the design is first made available to the public.

C. Step 3 - Decide when to disclose design and, if applicable, when to register

Timing is crucial for both registered and unregistered design rights. If a competitor introduces a design to the relevant public before the business has had the chance to do so, that competitor will take the benefit of any design rights unless a registration is already in progress. However, the business should be circumspect of early disclosure for the following reasons:

  • Once disclosure has taken place, the design will be available to competitors. The business will no longer be able to rely on confidentiality, making design rights the only available method of protection.
  • UCD only lasts for three years, and UKUDR for 10-15 years. The clock will start running as soon as it is disclosed within the territory of the EU in such a way that the interested circles operating within the EU can reasonably be aware of the design.
  • Disclosure will destroy the novelty of a registered Community or UK design unless registration is applied for within 12 months of disclosure (the grace period, discussed below).

For these reasons the business should ensure it has considered the type and duration of protection before disclosure takes place. To this end, all personnel with access to the design should be made aware of the repercussions of accidental disclosure, and clear procedures should be put in place to protect confidentiality.

Care should also be taken to control, record and store a disclosure timeline, including all relevant documents and communications.

Proof of the timeline may be necessary to rely on unregistered rights or to resist a challenge to the validity of a registered design.

The 12-month grace period is a valuable tool and should be used wisely. Used correctly it will enable the business to "test" designs in the relevant market, relying on automatic unregistered rights to fend off competitors before applying for longer term registered rights in respect of any successful designs.

The business should also ensure it notes ownership of the design on its packaging and literature, thus putting would-be infringers (and consumers generally) on notice of its unregistered rights. Once registered, the business can also advertise that the design is registered to deter third party copying.

D. Step 4 - Decide what to register

As with UCD (see previously), registered designs (whether UK or Community) protect the appearance of the whole or part of a product. However, the scope of a registered design will be determined by the representation of that design as recorded on the register. This leads to a different interpretation to that of unregistered designs, whose scope can be assessed with reference to how the design is implemented on any products.

What the business decides to register will ultimately determine the strength of its registered design rights portfolio. The following considerations should be borne in mind in coming to a decision:

  • Rejected ideas. Does the business need to protect every design concept created by its designers (including rejected ideas)?
  • Scope. Is protection of the entire product necessary or are there key aspects that should be focused on (or both)?
  • Registrability. As well as the novelty requirements discussed above, a business will need to ensure its design does not consist of non-protectable aspects. For example, a right in a registered design will not subsist in features of a product which are solely dictated by the product's technical function or in features which must necessarily be reproduced in their exact form and dimensions so as to permit the product to perform its function, for example. Legal advice should be sought if these exclusions are of concern as the UK and European courts have given guidance on the scope of the exclusions.
  • Less may be more. Following on from the English Supreme ruling in the Trunki case [5], registered designs are considered to offer more protection when represented as simple line drawings, rather than as photographs or CAD drawings. The representations on the registration are what will be covered, so any details such as colour contrast or shadowing which show on that image will be taken into account when assessing a would-be infringer's design. The Supreme Court provided detailed guidance on how best to register designs, and it is worth seeking advice on how best to get broader protection. Another such example was the Kohler Mira case [6], where dotted lines were taken to show transparency, rather than hidden features as argued by the designer.

Design Process Checklist

  1. Get contracts with designers in place - ownership and confidentiality
  2. Clearance
  3. Ensure documentation and awareness of origins of the design
  4. Consider registration
  5. Include notices when design is publicised
  6. Store all records and notes made in respect of the design

The rest of the series

Footnotes

[1] Note that this list is non-exhaustive.
[2] [2015] EWHC 216 (Ch) (February 6, 2015).
[3] At the time of going to print, these fees had been confirmed by the Government but their start date is to be determined.
[4] Correct as of March 14, 2016.
[5] Magmatic Ltd v. PMS International Ltd [2016] UKSC 12.
[6] Kohler Mira Ltd v. Bristan Group Ltd [2013] EWPCC 2.