On the 8 December 2014, the IPEC (the Intellectual Property Enterprise Court) handed down its decision in DKH Retail Limited v H Young (Operations) Limited in which claims for secondary infringement of UK and Community unregistered designs were successful in relation to the importation and sale of infringing gilets. The decision is a useful reminder of the importance in framing your unregistered design rights correctly and discusses the impact of the recent amendments made to the definition of "designs" by the Intellectual Property Act 2014.
The decision will be welcomed by rights holders as it demonstrates the courts' willingness to consider the specific environment in which the fashion industry operates by recognising that the law relating to "commonplace" designs should be applied differently to fashion items which can produce a variety of aesthetic effects compared to functional products.
The case concerned a claim brought by DKH in relation to two sections of a gilet: (i) a double layered front closing and hood arrangement with a central zip and overlaying placket; and (ii) a zip fastened hood alone. The defendant, H Young admitted importation and sale of the gilet in issue and that it was designed "by reference to" DKH's gilet.
The court determined that the scope of protection conferred by "designs" as defined is now narrower following the amendments to the law by the Intellectual Property Act 2014 (the "Act"). However the real world effect of this change is still very much uncertain as in this case the change to the definition had no impact on the designs in issue. It will be interesting to see how the narrowing of the scope of protection will be considered in the future and whether certain claims will be marginalised as a result.
The preliminary issue considered in the judgment was whether the rights DKH sought to rely on satisfied the revised definition of "design" under the Act. The recent amendments to the definition, which came into force on 1 October 2014 removed from the definition of "design" the words shown in square brackets below:
.."design" means the design of [any aspect of] the shape or configuration (whether internal or external) of the whole or part of an article.
The court went on to analyse the meaning of the deleted phrase and whether their removal would have an expansive effect (because they previously limited the extent of what would be included in the definition) or a narrowing effect (in that previously permitted variations were no longer available as part of the definition). Having regard to the intention of the Act, as explained in the explanatory notes, the court concluded that the effect of that change had to be to narrow the definition.
An interesting aspect of the decision was the consideration of whether the design for which UK design right was claimed was commonplace in the design field in question. The Act has brought about further amendments in this respect (in relation to designs created after 1 October 2014) which mean that in order for originality to be denied on this basis the design must have been commonplace in a qualifying country at the relevant time, though the change had no impact on the present case.
The court went on to restate the approach that should be taken when assessing commonplace designs and highlighted that in certain circumstances the significant features of a design can be individually commonplace with the result that the design itself was commonplace, even though the particular combination had not existed before. This was held to be the case in relation to functional items which were not complex in their design. The illustration used was the functional nature of contact lenses, which could have a particular combination of dimensions that had never been used before and yet, together these dimensions could still be commonplace as each of the relevant features would be "where one would expect them to be".
This position was contrasted with that of fashion items which were deemed to be complex in their design and which often involve the arrangement of various features to create an aesthetic effect. If that aesthetic effect is new, the design would not be commonplace.
The impact of knowledge
For the purposes of UK unregistered design right, it was concluded that the gilet in issue was an infringing article, having been made substantially to both of DKH's designs. DKH was unable to prove that those in the clothing industry would have known that copying a garment such as its gilet would constitute an infringement of IP rights and that therefore the defendant must have known it was dealing with infringing articles. Knowledge was only therefore established following the receipt of the letter before action and a reasonable period of investigation, which, in the absence of evidence, the judge ruled would be 14 days after receipt of the letter. At this point H Young should have discovered that the gilet in issue had been copied and the extent of that copying.
There is no equivalent requirement for knowledge in relation to Community unregistered design rights and therefore the claim for secondary infringement occurred at the time of importation, sale and copying.
As a final point, the court also considered the potential for bonus damages to be awarded on the basis that the infringer knowingly, or had reasonable grounds to know that it engaged in infringing activity. As this case related to secondary infringement, it seemingly followed that there would be potential for such damages under the Enforcement Directive. The court referred back to the judgment in Henderson and mentioned that this would not be an appropriate case for such an additional award. Little reasoning was given for this, however it was clear that the lateness of the date on which knowledge was established was a relevant factor.
The full judgment can be accessed here.