Australian design registrations provide exclusive rights in the appearance of a product. While popular, the system has been criticised for the somewhat limited scope of the protection provided to the design owner. However, in the recent decision in LED Technologies Pty Ltd v Elecspess Pty Ltd  FCA 1941, the Federal Court found in favour of a company which had sued the importers and distributors of copies of its registered designs for LED lights, despite there being visual differences between the infringing lights and those of the registered designs. The decision also shed light on a number of other important aspects of Designs law including authorship, ownership and the assessment of newness and distinctiveness of designs.
LED Technologies claimed that it had designed LED lights that had been taken to China by a competitor, where they were copied and subsequently imported into Australia in large quantities. The case concerned the design registration for two of these designs, particularly designs for rear combination LED lights, one with a dual lens and the other with a triple lens. The Respondents (Elecspess and others) counterclaimed that (amongst other things):
- LED Technologies were not solely entitled to the registered designs, as the author was an independent contractor rather than an employee; and
- The designs were not "new and distinctive" and that, therefore, the registered designs were not valid and enforceable.
On the issue of authorship and ownership, it was found that while an LED Technologies employee had produced the initial, hand-drawn, sketches of the LED lights, it had been a contractor who had subsequently produced the CAD drawings and moulds required for manufacture. However, in considering the contribution of the contractor, the Court confirmed that authorship of a design resides with the "person whose mind conceives the relevant shape, configuration, pattern or ornamentation applicable to the article in question and reduces it to visible form", and held that Mr Ottobre [of LED Technologies] was the person who conceived the relevant shape, configuration and pattern of the light designs and reduced them to a visible form; the contractor "had simply converted the design to an electronic form in order to facilitate the production process". Notwithstanding this, the Court also noted that even if it had been shown that the contractor had contributed to the design authorship, "there are two separate and distinct circumstances in which the creator of a design is not entitled to register it: (1) where the designer creates the design in the course of employment, whether or not there is a specific contract; and (2) where the designer creates the design under a specific contract, whether or not there is an employment relationship"; the Court found that the latter applied to the contractor in this case.
In assessing the newness and distinctiveness of the designs, the
Court rejected the submission of the Respondents that
distinctiveness should be assessed by comparing it to the prior art
base as a whole. Instead, the comparison to be made is between the
design in question and any one design forming part of the prior
art base. The Court also gave consideration to who the
"informed user" (who makes the comparison against the
prior art design) of the designs might be. It was found that an
1. is reasonably informed; not an expert but more informed than an average consumer;
2. is an objective standard. However, expert evidence may still be adduced to assist the Court in applying the informed user concept; [and]
3. focuses on visual features and is not concerned with internal features or features that are not visible to the naked eye.
On the question of infringement, it was "common ground" that the Respondents' lights were not identical to the registered designs, however the Court still held that infringement had occurred as the infringing lights were "substantially similar in overall impression". In reaching this finding, the Court recognised that "more weight [must be given] to similarities between the designs than to differences between them" and, in particular, noted that the presence of screws in the infringing lights did not create a different "visual appeal" despite the fact that the statement of newness and distinctiveness accompanying the registered designs highlighted a "no visible screws" feature. In this regard however, the Court stated that the screws in the infringing lights are not "visual" screws as they "are the same colour as the flat strip or landing between each lens and sit low in the socket". This was contrasted with screws in relevant prior art designs which were "chrome in colour and protruding".
The finding of infringement in this case is a very positive outcome for users of Australia's registered design system; the decision making it clear that infringement of designs registered under the Designs Act 2003 may not be readily avoided by the inclusion of minor visual differences. The case also emphasises that care needs to be taken when dealing with an independent contractor. In particular, the case highlights the importance of:
- establishing authorship in a design by recording the details of that design in a visible form (such as a sketch) before engaging a contractor; and
- formalising arrangements with a contractor so that there can be no dispute as to ownership of any intellectual property, such as a registrable design, that may be created.
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.