Applying The Designs Act 2003: Multisteps In The Right Direction?

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Summary

  • The recent Multisteps Pty Limited v Source and Sell Pty Limited [2013] FCA 743 decision provides insight as to how the Federal Court of Australia grapples with some of the key legal principles arising in relation to Australian registered designs.
  • The case will provide useful guidance to users of the Australian designs system, and practitioners, as it joins a still surprisingly small number of cases decided under the “new” Designs Act 2003 (Cth).
  • The case also highlights some of the issues being considered in the Advisory Council on Intellectual Property’s current “Review of the Designs System”.

Background

The recent decision of Justice Yates in Multisteps Pty Limited v Source and Sell Pty Limited [2013] FCA 743 (Multisteps)1 provides further insight as to how the Federal Court of Australia grapples with some of the key legal principles arising in relation to Australian registered designs. 

The case will provide useful guidance to users of the Australian designs system, and practitioners, as it joins a still surprisingly small number of cases decided under the “new” Designs Act 2003 (Cth) (the Designs Act).

Multisteps involved allegations of infringement of three registered designs relating to strawberry / cherry tomato containers. The case also involved two innovation patents relating to containers, however this article does not address this aspect of Multisteps

Justice Yates’ view of the “informed user”

One particularly interesting development to arise from the Multisteps decision is Justice Yates’ comments as to the notion of the “informed user” under the Designs Act, and the suggestion that it is a different concept from the informed user of European/UK law.

The Designs Act section 19(4) specifies that, when assessing whether a design is substantially similar in overall impression to another design, the person undertaking the assessment “must apply the standard of a person who is familiar with the product to which the design relates, or products similar to the product to which the design relates (the standard of the informed user)”. The Designs Act expressly requires the Federal Court to adopt this standard (Designs Act s 19(5)).

In Multisteps, Justice Yates distinguished the UK and European approaches (from which the language of an “informed user” test was adopted in Australia) from the informed user standard in the Designs Act. UK and European decisions have drawn distinctions between who can and cannot be a “user” for the purpose of the “informed user” test. Justice Yates noted that the ALRC report which preceded the introduction of the Designs Act had described the concept of the informed user as “flexible enough to incorporate where relevant the views of consumers, experts, specialists and skilled tradespersons”. His Honour made the following finding:

The test in s 19(4) of the Designs Act reflects this more general approach.  Apart from the tag “the informed user”, the standard prescribed by s 19(4) appears to be indifferent as to how and in what circumstances familiarity is acquired. In my respectful view, the standard does not proceed on the requirement that the notional person be a user of the products in question – although, obviously, familiarity can be gained through use. Similarly, it does not proceed on the distinctions that the United Kingdom and European cases draw about who can and who cannot be a user.  

Importantly, however, s 19(4) does not impose a standard higher than familiarity.  The standard fixes the appropriate level of generality (or particularity) at which a design is to be assessed:  see the discussion in Rolawn at [112].  This may be a reason for saying that the notional person is not a design expert, lest it be thought that a standard of design evaluation more rigorous or exacting than familiarity is involved. However, in my view, it is not a reason for excluding, necessarily, a design expert from being a person having the required familiarity (emphasis added).

Therefore, Justice Yates’ construction of the concept of the “informed user” appears to emphasise flexibility and allow, where appropriate, the court to be assisted by evidence from design experts.

General warnings for experts

Multisteps contains various statements of principle which should provide useful guidance to practitioners when identifying and instructing independent expert witnesses in Designs Act cases.

In particular, Justice Yates was critical of the experts for, variously:

  • being inconsistent in their analysis by placing a different weight on visual features in an infringement context to the weight placed on the same features in a validity context;
  • ignoring visual features;
  • seeking to provide evidence as to what the likely impressions of the “general body of consumers” would be (on the dual bases that the impressions of general consumers were not germane to the issues in question, and that the expert was not qualified to provide views as to what the impressions of general consumers would or would not be);
  • overly focusing on differences between designs (rather than on overall impression);
  • undertaking independent research which was not properly disclosed in the evidence; and
  • comparing the infringing product with another product said to embody the registered design, rather than making a comparison with the registered design itself.

In light of these shortcomings, Justice Yates only relied upon the evidence of the experts to direct [his] attention to similarities and differences between the designs. Justice Yates stated that Having been so assisted, I have proceeded on the basis of my own evaluation of the visual significance of similarities and differences, not that of the experts.

Avoiding shortcomings such as those highlighted by Justice Yates is likely to provide evidence of greater assistance to the court.

Applying the substantial similarity in overall impression test

Under the Designs Act considerations of both validity and infringement are framed with reference to whether a registered design is “substantially similar in overall impression” to another design (a prior art design or an alleged infringing product).

Section 19 of the Designs Act sets out the test to be applied when assessing whether two designs are substantially similar in overall impression. The test involves a number of factors that must be taken into account and, on face value, prescribes a straightforward assessment for determining substantial similarity. The reality, however, is that practically applying the test (and determining the interplay of the various factors) can be a complex and difficult exercise. 

Perhaps in recognition of this complexity, Justice Yates saw fit to reiterate the general observation of Jacob LJ in Procter & Gamble with respects to designs cases: 

The most important things in a case about registered designs are:

1. the registered design; 

2. the accused object; and 

3. the prior art. 

And the most important thing about each of these is what they look like.

Justice Yates’ judgment goes on to provide a useful example of how the substantial similarity in overall impression test can be applied in practice. His Honour considered section 19 and summarised the factors to be addressed by a person assessing substantial similarity in overall impression (at [54]) as:

a. More weight is to be given to similarities between the designs than to differences between them: s 19(1). 

b. Regard must be had to the state of development of the prior art base for the design: s 19(2)(a). 

c. If there is a statement of newness and distinctiveness identifying particular visual features of the designs as new and distinctive, particular regard must be had to those features. If those features relate to only part of the design then      particular regard must be had to that part of the design, but in the context of the design as a whole: s 19(2)(b). If there is no statement of newness and distinctiveness in respect of particular visual features of the design, regard must be    had to the appearance of the design as a whole: s 19(3). 

d. If only part of the design is substantially similar to another design, regard must be had to the amount, quality, and importance of that part in the context of the design as a whole: s 19(2)(c). 

e. Regard must be had to the freedom of the creator of the design to innovate: s 19(2)(d).(f) In having regard to these considerations, the standard to be applied is that of a person who is familiar with the product to which the design  relates or similar products: s 19(4). This is referred to as the standard of the informed user. 

Justice Yates also noted that:

What this shows is that, although the test is based on impression, it is not based merely on a casual comparison between designs for a given article. There needs to be a studied comparison based on the prescriptions of s 19 of the Designs Act. Thus, the notion of “imperfect recollection” – familiar in trade mark law – has no application when determining design similarity….

While it is still not entirely clear how the various factors in section 19 of the Designs Act are to be considered together in practice, the approach adopted by Justice Yates in Multisteps is likely to be welcomed by Designs Act users and practitioners, as providing some guidance in an area with relatively few decided cases.

Areas still requiring exploration

Two specific aspects of section 19 of the Designs Act which have given rise to some uncertainty in application are the requirements that a person assessing two designs are substantial similarity in overall impression must:

  • have regard to the state of development of the prior art base for the design (s 19(2)(a)); and
  • have regard to the freedom of the creator of the design to innovate (s 19(2)(d)).

While mentioned, the application of these aspects of the test was not addressed in great detail in Multisteps.

Justice Yates found that evidence from both parties spoke of limitations on the freedom of the designer to innovate. For example, the parties apparently agreed on there being functional limitations as to the shapes and sizes of produce containers, and to the need for ventilation features. 

Interestingly, the limitations, which were accepted by Justice Yates appear to relate to considerations of common practice and efficiency. For example, Justice Yates specifically accepted that one limitation on the freedom to innovate was that produce containers typically were required to be square or rectangular in shape with dimensions to facilitate packing for storage and transport …. It is unclear, however, how such limitation on a designer’s freedom is to be understood in light of the existence of non-square or rectangular containers. Justice Yates himself appeared to accept the ability to design non-rectangular containers given the description is of what is “typical” as opposed, for example, to what is necessary or required. 

Future cases may well see further debate on how particular limitations on a designer’s freedom to innovate, and the nature of such limitations, are to be treated under section 19.

In respect of the state of development of the prior art base, the “prior art base” in Multisteps consisted of between 3 and 6 pieces of prior art for each registered design in issue. Justice Yates considered the prior art in relation to each design in issue and determined whether each registered design in issue was substantially similar in overall impression to any design in the prior art base. However, the judgment does not consider more generally how the concept of the “state of development of the prior art base” is to be applied in Designs Act cases.

Findings in the case

Justice Yates ultimately found that one of the three registered designs in issue had been infringed. 

His Honour made this finding in spite of noting visual differences between the registered design and infringing product. His concluding paragraphs on this issue are instructive:

Notwithstanding that there are differences in visual features between the design of the Kumato container and RD 6, I am persuaded that the two designs are substantially similar in overall impression. I accept that the notional person would be alert to the visual differences in the base and the lid of the Kumato container that lead to the appearance of the overbite, and the absence of the parallel closure and the openings at the front and sides of the container, when compared with RD 6.  However, in my view, the similarities dominate these differences. Although the notional person would regard the design of the Kumato container to have some differences compared to RD 6, he or she would nevertheless regard the Kumato container to be substantially similar in overall impression to RD 6.  

The respondent has infringed RD 6. (emphasis added). 

Subsequently, in Multisteps Pty Limited v Source and Sell Pty Limited (No 2) [2013] FCA 844, his Honour ordered that an injunction apply to the respondents in relation to the registered design which had been found to be infringed, and ordered that the respondents provide an affidavit setting out sales figures and other information to enable the applicant to determine whether to seek damages or an account of profits.

Current review of the designs regime

In addition to providing helpful guidance to the application of the Design Act, Multisteps highlights some of the issues being considered in the Advisory Council on Intellectual Property’s (ACIP) current “Review of the Designs System”2.

For example, the ACIP’s issues paper notes (at p 16) that:

Anecdotally there is some evidence of uncertainty regarding the [statement of newness and distinctiveness]. In particular, some applicants erroneously believe they are providing a statement which outlines the scope of their overall rights, when in fact, the purpose of the [statement of newness and distinctiveness] is to identify new aspects to a design for comparison with the prior art base.

It is apparent from the Multisteps case that irrespective of whether design applicants are uncertain as to the role of the statement of newness and distinctiveness, at least some expert witnesses are. In Multisteps Justice Yates found that one of the experts misapplied the legislative test due to having had regard only to features claimed in the statement of newness and distinctiveness, which led to certain features being ignored. 

Such uncertainty can be noted in relation to other aspects of how the Designs Act is to be applied, which in part arises due to a lack of decided cases under the Design Act. In that context, the Multisteps decision is a welcome addition.

Justice Yates has currently reserved judgment in Federal Court Designs Act proceedings between Apple and Samsung relating to Samsung phone and tablet products, which will be considering the same Designs Act provisions as Multisteps.

  1. The full decision is available here

  2. Click here to view Review of the Designs System.

This article was written by Stuart Irvine, Senior Associate, Freehills Patent Attorneys, and Ben Cameron, Senior Associate, Herbert Smith Freehills.