Marketing Control Act
Design Act
Comparison of Marketing Control Act and Design Act
Good design sells well and may also add value to a corresponding trademark. But popular designs are often copied, so the question arises as to which means a designer has to prevent or stop third-party use of the same or similar design, or design elements. In Norway, the Design Act, the Copyright Act, the Trademark Act and the Marketing Control Act can all form a relevant basis for a claim. This article focuses on the Design Act and the Marketing Control Act, looking in particular at the differences between the two sets of regulations.
In accordance with section 30 of the Marketing Control Act, it is:
prohibited in the course of trade to use copies of distinguishing marks, products, catalogues, advertising materials or other produced items in such a manner and under such circumstances that the use must be considered an unfair exploitation of the efforts or results of another person, and to present a risk of confusion.
The protectable asset under section 30 of the Marketing Control Act is the designer's "efforts and results". Hence, unlike the Design Act, protection under the Marketing Control Act is established through use and recognition of the design in the market. An overall assessment of the following factors must be made to determine "efforts and results" and hence the scope of protection in the subject design:
- the producer's investments in product development;
- any advertisement of the design;
- annual turnover; and
- market share.
The originality or distinctiveness of the design will also be relevant factors. The larger the market share and the more original or distinguishing the design, the wider the scope of protection awarded under section 30 of the Marketing Control Act.
The requirement of "unfair exploitation" means that any similarities between the two designs are, of themselves, not sufficient to establish infringement under section 30 of the Marketing Control Act. Instead, a subjective assessment of the alleged infringer's actions must be made, including an assessment of whether it is likely that the alleged infringer was aware of the prior design and intentionally copied its features. Relevant factors in the alleged infringer's disfavour may include, for instance:
- previous business relationships between the two parties; or
- previous and systematic copying of the designer's or other third parties' products.
Hence, in cases under section 30 of the Marketing Control Act, a picture is drawn of the two parties involved, as well as the established value in the allegedly infringed design. The core questions are:
- whether the first designer has done enough to create a market position for its design; and
- whether the alleged infringer acted disloyally in its creation of the later and alleged infringing design.
In addition to the subject assessment mentioned above, a more objective comparison of the two designs is made, including whether the products will be confused in the common course of trade. The use of different trademarks, packaging or visual elements may, in some cases, create sufficient distance between two designs that initially appear similar – if so, infringement under section 30 of the Marketing Control Act will not be established.
Cases relating to product copying under section 30 of the Marketing Control Act could be referred to the Norwegian Council (NKU), which deals with unfair marketing practices. The NKU offers written proceedings in cases of alleged infringement of section 30 of the Marketing Control Act. The NKU's decisions are not legally binding, but most professional market players comply with its decisions, regardless of whether it finds that there has been infringement. Proceedings before the NKU are usually more cost effective than court proceedings and serve as efficient tools in most cases.
The Norwegian Design Act does not offer protection for unregistered designs. Hence, in order to enjoy protection under the Design Act, a design must be registered with the Norwegian Industrial Property Office. The criteria for protection for registered designs are:
- "novelty"; and
- "individual character".
The novelty criterium refers to identical designs; protection will not be granted if an identical design existed on the market at the time of filing or if the subject design was made public by the designer more than 12 months prior to the filing date. "Individual character" is a more complex criterium, but basically it means that the overall impression of the design must be different from other designs on the market. The distance required to make a different overall impression depends on the freedom of the designer – for instance, whether technical features limit their freedom. Also, the design corpus must be taken into consideration – namely, how crowded the design field is and whether the consumer, being accustomed to similar shapes and features within the product group, still obtains a different overall impression. If so, less distance is required to create a different overall impression, and vice versa.
Registration, and hence protection, of a design may be obtained for a maximum period of 25 years.
In infringement matters, the crucial issue will be whether the alleged design creates an overall impression similar to that of the registered design. An objective comparison of the two designs is made, in which the originality in the registered design, compared with other available designs on the market, is crucial for the infringement assessment.
The Design Act does not allow for subjective reviews or assessments of the designer's market position or investments in the market. Hence, it is irrelevant whether the copied product has been a success, whether the designer or producer has had substantial exposure, or whether the design and product has been advertised. It is also irrelevant whether the parties have had previous business relationships or are fierce competitors, or whether the alleged infringer has acted disloyally. The only thing that matters is whether the alleged infringing designs has an overall impression similar to that of the registered design. Hence, the assessment made is objective.
Comparison of Marketing Control Act and Design Act
The assessment of product copying is quite different under the two acts.
The main difference is that under the Design Act, an objective assessment of similarities is made, while under the Marketing Control Act, a subjective assessment of the parties' investments and intentions is also included.
The Design Act offers strong protection for designers who have created a unique or original design – in these cases, enforcement under the Design Act is less complicated than the more complex assessments required under the Marketing Control Act. For designers who cannot refer to substantial advertisement or market share, or in cases where it may prove difficult to evidence subjective copying at the alleged infringer's hand, protection under the Design Act may be a saving grace.
The Marketing Control Act, in turn, may be used where the designer has not secured design registration. It may also form a basis for a claim if the product has become established through use and hence has a strengthened scope of protection due to its "look and feel". In such cases, a competitor may be criticised for not choosing a design different from that of the market leader. Having said that, it is important to stress that while section 30 of the Marketing Control Act recognises that protection may be obtained through use, the fundamental criterium for protection is still that the design has a certain scope of originality or distinguishing features.
For further information on this topic please contact Celine Varmann Jørgensen at Bryn Aarflot AS by telephone (+47 92 83 16 19) or email ([email protected]). The Bryn Aarflot AS website is available at www.baa.no.