If you hold a registered design under the old design registration system, a recent Australian High Court decision indicates that you may be entitled to greater protection than previously thought. The Australian High Court’s decision in Polyaire Pty Ltd v K-Aire Pty Ltd [2005] HCA 32 on 16 June 2005 clarifies that an infringement action for fraudulent imitation of a registered design need not establish that changes made to that design are for the purposes of dishonest disguise of the design. The decision reversed the Full Federal Court finding on this point.
This means that in considering a fraudulent imitation infringement claim the court must focus on whether or not a designer knew or is likely to have knowledge of a registered design and whether or not the second design is an imitation. The court does not need to consider whether or not differences between designs are intended to disguise the infringement. This more relaxed approach appears to be closer to the new broader infringement test in the Designs Act 2003.
Changes to the Designs Act
The appeal focused on the infringement provision of the Designs Act 1906 which deemed a person to infringe the monopoly in a registered design if, without the licence or authority of the owner, that person applies the design or any fraudulent or obvious imitation of it to any article in respect of which the design is registered. This provision no longer exists in the Designs Act 2003, which replaces ‘fraudulent or obvious imitation’ with a broader infringement test of 'substantially similar in overall impression'. However, designs already registered under the Designs Act 1906 will continue to be assessed under the infringement provisions of that Act.1
The design and the alleged infringement
The registered design (Polyaire Design) was for a grille for an air conditioner (Polyaire Grille). A designer was asked by one of the defendants to create a new design for an air conditioner outlet, that looked like other products in the market. He was instructed to include certain features that were part of the Polyaire Design. The new design (KA1 Design) included (despite small differences) a snap fit mechanism, control bars and blade ends including spigots. Unlike the Polyaire Design, the KA1 Design omitted a chamfered lip and vertical ribs on the outside of the frame. The KA1 Design was applied and released for sale. Polyaire complained about the KA1 Grille and a different grille (KA2 Grille) was released on the market by the defendants.
What is a fraudulent imitation?
In this case, the High Court applied the finding in Dunlop Rubber2 that a fraudulent imitation is an imitation which is deliberately based on a registered design. It may be less apparent than an obvious imitation, and yet when the two designs are closely scanned an imitation may be perceptible and an infringement found. However, even if the defendant set out to copy the plaintiff’s design and even if the defendant’s intention in adopting the differences between the plaintiff’s registered design and the accused article was to disguise the copying, there will be no fraudulent imitation unless the accused article is in fact an imitation or copy.
The High Court noted that this type of statutory fraud is somewhat removed from fraud at common law and the degree of moral turpitude or recklessness generally required for its establishment. This type of fraud is closer to equitable fraud which does not require that an actual intention to cheat must always be proved.
In Dunlop Rubber it was found that it was not necessary to find deliberate intention to steal the property of the owner of the registered design. A person may believe that they have altered the design perfectly honestly so as to make two different designs, but the design is still held to be a fraudulent imitation.
Earlier decisions
The trial judge Besanko J held, among other things, that the KA1 and KA2 designer had reason to be aware of the Polyaire Grille and to suspect that it was based on a registered design.3 He compared the products and determined that the KA1 and KA2 Grilles were a fraudulent imitation of the Polyaire Grille.
The defendant successfully appealed to the Full Federal Court, who found that the trial judge had erred in not considering whether the changes to the Polyaire Design were a dishonest disguise and consequently infringement had not been established.4 The full court found that a fraudulent imitation was a copy with differences which are both apparent and not so slight as to be insubstantial, but which have been made merely to disguise the copying.
The High Court’s decision
The High Court found that the full court decision was based on an extract of the High Court’s previous decision in Malleys v Tomlin5 which did not reflect the whole of the reasons in the case. Consequently, the full court erred by limiting the meaning of fraudulent imitation to instances of dishonest disguise.
The High Court approved the approach taken in Philips v Remington6 (Lehane J) to fraudulent imitation, which found that although changes often result from a conscious desire to come as close as possible to the registered design while avoiding infringement, particular changes may be introduced for other compelling reasons and there is no obvious reason why that should defeat an infringement claim. The court upheld the trial judge’s decision that the similar features between the designs created, the shape and the configuration which gave the Polyaire Grille its distinctive appearance.
Practical impact
If you think that your registered design has been imitated by a party who is likely to have knowledge of this registration, it is not necessary to show that changes to the design are merely to disguise the copying.
Conversely, even if you believe that you have altered another person’s design perfectly honestly so as to make two different designs, if you have based your design on a design registered under the Designs Act 1906 and the design is found to be an imitation or a copy, your ‘honest alterations’ will not protect you in an infringement action.
Footnotes
1. Section 156 Designs Act 2003.
2. (1931) 48 RPC 268.
4. K-Aire Pty Ltd v Polyaire Pty Ltd
(2003) 60 IPR 512.5. (1961) 180 CLR 120.
6. (1999) 91 FCR 167. Freehills acted for Remington in this case.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
