June 2, 2020

Industrial (c) versus registered (d): which to use and when

In New Zealand, rights in product designs can be protected in two ways: industrial copyright, under the Copyright Act 1994, and design registration, under the Designs Act 1953.

Copyright rights and registered design rights are fundamentally different rights, however, and each has its own benefits and limitations. This article explores the main differences between copyright rights and registered design rights and how they can be used, independently and together, to stop infringement.

Industrial copyright rights

Copyright subsists in ‘original’ works; that is works which are the product of more than minimal time, labour, skill and judgment. An ‘original’ work does not need to be ‘novel’, or new: this is because copyright protects the effort that goes into creating ‘original’ works; not the appearance of articles depicted in works. The threshold to qualify as ‘original’ is low. In the industrial context, original works typically include artistic works like sketches, CAD drawings and prototypes.

Copyright in New Zealand is an automatic right (provided the threshold of ‘originality’ is met). An author or owner does not need to register a copyright work to protect and enforce rights in that work. Because copyright is not a registered right, however, there is no presumption of validity which you obtain with a registered right (such as a registered trade mark). Further, the subsistence of copyright can be challenged, including on the basis a work is not ‘original’.

Broadly speaking, copyright in ‘industrially applied’ works – that is, works which have been reproduced in physical, three-dimensional form more than 50 times – lasts for 16 years from the date of manufacture of the 51st physical reproduction.

Unlike in the US and China, for example, there is no system of registration of copyright rights in New Zealand for enforcement purposes. (The closest New Zealand has to a register of copyright interests is the list of intellectual property rights and notices accepted and published by New Zealand Customs under the border protection provisions of the Copyright Act 1994.) Consequently, a person’s copyright rights, or at least the scope of those rights, are not readily ascertainable, including by potential infringers. An assertion of copyright rights therefore needs to be supported by appropriate evidence, resulting in higher enforcement costs.

Registered design rights

Registration of a design protects the shape, configuration, pattern, or ornament applied to an article “by any industrial process or means”.

To be registered, a design must be novel, or new; how much time, labour, skill and judgment went into creating the shape, configuration, pattern, or ornament is not relevant. This threshold is higher than the threshold to obtain copyright protection. (If a design is not novel or new, then depending on how distinctive it is it may be possible to rely on the Fair Trading Act 1986 or tort of passing off to protect the subject shape, configuration, pattern, or ornament.) The validity of a registered design can be challenged, however, including on the basis the design is not novel.

A design registration lasts 15 years from the date of registration (three periods of 5 years, with renewal fees payable).

With registration comes a presumption of validity and ownership of rights, so when asserting rights an owner only needs to produce a certificate of registration and representations of the registered design. In addition, the subject design is published on the Designs Register: thus, a person’s registered design rights can be readily inspected by the public, including potential infringers.

Stopping copycats – copyright rights vs registered design rights

An owner of both copyright rights and registered design rights in relation to a product design can use both sets of rights to stop infringers. Here’s how, using a fictional situation:

Mr Freeze Ltd (fictional) is the owner of copyright rights in artistic works for, and registered design rights for the shape and configuration of, an ice cube dispenser. The dispenser is hugely successful, being sold in retailers offline and online all around New Zealand. Mr Freeze is concerned that what looks like a copycat product it has seen in Australia will soon be imported in New Zealand and wants to know what enforcement strategy it can adopt. Mr Freeze has an idea who the importer might be.

At the border:

In the first instance, Mr Freeze can assert its copyright rights at the border under Part 7 of the Copyright Act 1994 by lodging a border protection notice with New Zealand Customs. The Notice will enable Customs to seize and detain any apparently infringing goods at the border, preventing it from entering the New Zealand market. If apparently infringing goods are detained, the importer will be notified and may consent to destruction of the goods. If the importer contests detention of the goods, however, Mr Freeze will have to issue court proceedings to enforce its rights. The goods will continue to be detained pending the outcome of the proceedings.

If Mr Freeze knows or suspects it knows the identity of a potential importer of the alleged copycat product, it should advise Customs so that the importer is flagged in Customs’ system.

Mr Freeze cannot assert its registered design rights at the border because there is no facility under the Designs Act 1953 to lodge border protection notices.

In the market:

Should apparently infringing goods escape Customs’ attention, which is possible because Customs cannot inspect every container coming into New Zealand and/or the goods may not be identified accurately on shipping documents, Mr Freeze can assert its copyright rights and/or its registered design rights in the market.

Looking first at copyright, to succeed in its infringement claim, Mr Freeze would have to establish:

  1. the artistic works for its dispenser are original works;
  2. copyright subsists in its copyright works;
  3. it is the owner of copyright in its copyright works;
  4. the imported dispenser reproduces the whole or substantial part(s) of Mr Freeze’s copyright works;
  5. the imported dispenser, or relevant part(s) thereof, is objectively similar to the whole or substantial part(s) of Mr Freeze’s copyright works; and
  6. the imported dispenser, or relevant part(s) thereof, is derived from the whole or substantial part of Mr Freeze’s copyright works.

As can be seen from this list, the burden on Mr Freeze to prove infringement would not be insignificant. Moreover, Mr Freeze could succeed in establishing factors (1) – (5) but fail on (6) if the importer establishes that, on the balance of probabilities, it, or the original manufacturer, followed an ‘independent design path’ in achieving the final design of the imported dispenser – i.e. it did not copy the dispenser.

Looking now at the registered design, to infringe Mr Freeze’s rights the shape or configuration of the imported dispenser must not be substantially different from Mr Freeze’s registered design: in other words, the shape or configuration of the allegedly infringing article must have substantially the same appearance as Mr Freeze’s registered design. That’s all. There is no prima facie need for Mr Freeze to prove validity or ownership as there is with a copyright claim as these are confirmed by the act of registration. Mr Freeze also does not have to prove derivation, or copying, as it does with copyright. (NB: Mr Freeze might have to prove validity and ownership if the importer was to challenge the registration by way of counterclaim in proceedings, but only then.)

Thus, establishing infringement of its registered design could be much easier for Mr Freeze than establishing infringement of copyright.

This is not to say Mr Freeze couldn’t, or shouldn’t, also claim copyright infringement as an additional or alternative claim if it issued proceedings against the importer. If, for example, the imported dispenser was arguably not substantially similar in appearance to Mr Freeze’s registered design but did incorporate an important feature of Mr Freeze’s dispenser design, then Mr Freeze could, and should, argue infringement of copyright by the taking of a substantial and objectively similar part of its copyright works.

In summary, then, Mr Freeze could allege infringement of copyright AND/OR infringement of its registered design if the whole of imported dispenser appeared to be a copy of the whole of Mr Freeze’s dispenser. Alternatively, Mr Freeze could allege infringement of copyright only if the shape or configuration of the allegedly infringing article did not have substantially the same appearance as Mr Freeze’s registered design, but a substantial part of the imported dispenser appeared to be a copy of a substantial part of Mr Freeze’s dispenser. Either way, Mr Freeze could aim to stop the imported dispenser from being sold in New Zealand.

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