The Australian Designs Act 1906 (Cth) (the Old Act) had a long and tortured history of infringement cases failing based on relatively minor variations, or of invalidation of design registrations in the face of prior art. The Old Act was replaced by the Designs Act 2003 (Cth) (the New Act), in part because of concerns about the weak protection for design registrations under the Old Act. The New Act contains robust infringement provisions against designs which are "substantially similar in overall impression" as well as direct imitations, and the majority of infringement cases under the New Act have been successful. However, the infringement provisions of the Old Act may still be relevant until 2020, and designers are not out of the woods of the Old Act yet. What is surprising is that, since the New Act, decisions in Old Act infringement cases have also taken a sudden turnaround in favour of registered design rights. After a century of weak protection, a sequence of cases including Tu v Pakway, Caroma Industries v Technicon Industries and most recently, Chiropedic Bedding Pty Ltd v Radburg Pty Ltd have shown that Old Act design registrations have teeth.
In Chiropedic Bedding, Chiropedic Bedding owned a design registration for a single-sided "posture top" mattress, incorporating a separate sprung section on top of the main body of a sprung mattress. Importantly, its design registration included a statement of novelty in the following form:
Novelty is claimed in the shape and configuration of the upper layer of the mattress portion of the mattress and base as indicated by the beading as shown in the representations.
A statement of novelty was an optional feature of a design registration under the Old Act and was only incorporated into the Old Act in the 1980s. Statements of novelty were not frequently used in Old Act registrations, and their impact was not well understood.
Radburg commenced selling several similar mattresses to those covered by Chiropedic Bedding's registration, and Chiropedic Bedding sued it for infringement of Chiropedic Bedding's registered design.
Radburg immediately responded with a challenge to the validity of Chiropedic Bedding's design registration. It argued that the registration was not "new or original" (the requirement for a validly registered design under the Old Act), firstly because it claimed the effect of the statement of novelty was to indicate that only the features covered in that statement - the upper layer of the mattress - were new or original, and secondly because Radburg claimed several earlier mattress designs included those features, and could therefore not be "new".
Chiropedic Bedding, however, argued that novelty or originality had to be assessed by reference to the design as a whole, not just the aspects of the design covered by the statement of novelty. In fact, it argued that its designs could be new or original even if none of the features identified in the statement of novelty was itself new or original. Chiropedic Bedding also argued that none of the earlier mattress designs identified by Radburg in fact anticipated its own design so as to render it invalid.
Jessup J of the Federal Court conducted an exhaustive review of UK and Australian case law and concluded that while for the purposes of infringement a design registration had to be considered as a whole, a statement of novelty controlled the assessment of novelty or originality for the purposes of an invalidity analysis. In his view, because infringement proceedings are often conducted some years after the development of the designs in question, it would be a particular hardship for respondents to infringement actions not to be permitted to rely on statements of novelty to check whether their own designs were likely to infringe, particularly given the difficulties involved in identifying earlier designs anticipating those covered by registrations. In any case, where a design has been accepted for registration on the basis of a statement of novelty identifying new or original features, the design owner cannot later deny that those features have any impact on the question of validity. It is now clear that while a statement of novelty does not have a role in the assessment of infringement, it does limit the assessment of validity to the features covered. If those features are not novel or original, the design registration should be held invalid.
However, Jessup J went on to find that although many of the features of Radburg's identified earlier designs anticipated Chiropedic Bedding's designs they did not include the distinctive flat-top appearance (or "shape or configuration", as described in the statement of novelty) of Chiropedic Bedding's design. The prior art therefore did not invalidate its registration, despite the impact of the statement of novelty.
Jessup J went on to find that two of Radburg's beds were "obvious imitations" of the registered design and therefore infringing as there were effectively no differences whatsoever between those beds and the registered design. However, the remainder of the beds involved differences from the registered design, such as a convex rather than flat top, or decorative stitching rather than a plain appearance. In those cases, Jessup J applied the long-recognised principle from Dart Industries v Décor Corporation that "small differences between the registered design and the prior art will generally lead to a finding of no infringement if there are equally small differences between the registered design and the allegedly infringing article." Because the validity of Chiropedic Design's design registration depended on the differences between that design and prior art with similar features to Radburg's remaining beds, it followed that these were not "obvious imitations" for the purposes of infringement under the Old Act.
These further beds could then only infringe Chiropedic Bedding's registration if they were "fraudulent imitations" of Chiropedic Bedding's design – that is, if the differences involved were made with the knowledge or suspicion that the design had been registered, in order to avoid infringement. This is a notoriously difficult ground to establish in the absence of clear evidence of intentional concealment of copying and knowledge of the registration of the relevant design, which had been found in the earlier case of Caroma v Technicon. In that case, a director of the respondent company had commented in writing on proposed marketing materials that "Technicon should not concede that certain products were modelled on Caroma products or were designed in a similar way to the Caroma equivalent... Direct comparisons or pointed references to similarities with the Caroma product – particularly in a written document such as this – are very dangerous, in my opinion." The respondent had also claimed not to be aware of Caroma's design registration, despite having previously registered designs of its own. Both of these factors secured the success of the fraudulent imitation argument in that case. Unfortunately, Chiropedic Bedding did not have such damning evidence available regarding Radburg's conduct, and the fraudulent imitation argument failed. It therefore only succeeded in the infringement claim against two of Radburg's products. It was awarded an account of profits in relation to those infringements.
On one view, Chiropedic Bedding simply confirms two long-established propositions of Australian designs law: firstly, the Dart principle, that minimal developments over the prior art may avoid infringement if there are similar differences between allegedly infringing products and the registered design, and secondly, the virtual impossibility of establishing infringement on the basis of fraudulent rather than obvious imitation. However, it is also clear that while a number of older cases under the Old Act appear to involve judges determined to invalidate designs wherever possible, Chiropedic Bedding seems to be an example of the opposite point of view – a hunt, within the narrow window of the statement of novelty, for the grounds on which the design was new or original rather than the opposite. Together with Caroma v Technicon, the trend seems to be towards more robust protection for designs registered under the Old Act. As the Old Act continues to apply for infringement of designs registered before 16 June 2004, and as the duration of protection under the Old Act was up to 16 years, this is very encouraging.