Intellectual Property and IT Insights

12 March 2004

Fixing the copyright/design overlap?

By Peter Knight.

Key Points:
Amendments to copyright/design provisions might not make the laws that much clearer.

“A most extraordinary jumble of conceptions” [1]

Is it a design or is it copyright? This question bedevils many manufacturers and designers, as the subject matter of a design might be both a design and protected by copyright - and that affects its protection from infringers. The Designs (Consequential Amendments) Act 2003 which was passed into law along with the new Designs Act 2003, attempts to clarify this area of law by amending the “copyright/design overlap” provisions in sections 74 to 77 of the Copyright Act 1968 (Cth).

These provisions of the Copyright Act have been contentious in the past because the way they have operated. That is, if you have copyright in something which is also a registrable design, and you have “industrially applied” the design (ie made a product from it), then someone who infringes your copyright has a defence. At the same time, the full term of copyright protection is still available to designs of a purely functional or utilitarian kind.

Proponents of the registered design system - principally patent attorneys who benefit from filing and prosecuting design applications - have regarded this as illogical. Those who favour the present system regard this as fair, as the Designs Act provides a monopoly over a registered design (no proof of actual copying is required), while copyright protects only against actual copying, or “free riding”. Both opponents and proponents have criticised the misleading drafting of these provisions, which have proved a model of obscurity.

In other countries, notably the United Kingdom and New Zealand, the fact that copyright and registered designs protect fundamentally different things in different ways has resulted in the abandonment of the overlap provisions to a greater or lesser degree, allowing the co-existence of the rights. In Australia, this has only been conceded by amendments to allow for copyright protection in “two-dimensional” designs - such as pictures on T-shirts and record sleeves - but it was suggested with the introduction of the new designs law that the same relaxation would be allowed for all designs - an “unregistered design right” in effect, such as that under the UK law.

The overlap in practice

The most recent Australian decision on the existing copyright/design overlap provisions is Muscat v Le [2003] FCA 1540 (19 December 2003).

This case is the latest in a long string concerning the work of fashion designers and dress makers. These all have a common foundation, that is that the fashion designer creates a concept drawing, from which a dressmaking pattern is made, then a prototype to enable variations resulting from the features of the design as made up, and finally final graded patterns which are used to cut cloth in bulk to be stitched up into garments for sale.

Typically, fashion designers do not register their designs because they cannot afford to engage a patent attorney to go through this costly process for every design before it is put on the market (lodging a design application after it goes on sale is of course pointless), since no-one knows whether a particular design will be successful or not.

In this case, Ms Muscat had created a design for stretch pants sold under the brand “Mytiko” which was very successful. The court found that Mr Le and his company had deliberately copied the Mytiko stretch pants design to make their own dressmaking patterns and pants sold from their “Dolly Girl” shops.

Ms Muscat claimed copyright in her original drawing and the subsequent dressmaking patterns (as to which there was no doubt), and that her designs were “works of artistic craftsmanship” or within the exception in Regulation 11 of the Designs Regulations as “articles that are primarily ... artistic in character ... on which there is printing, being ... dress-making patterns” or otherwise were not caught by the copyright/design overlap provisions. Mr Le argued that her design was exactly the sort of unregistered design that sections 74 to 77 of the Copyright Act are intended to catch.

In a short but most comprehensive judgment, Justice Finkelstein rejected Ms Muscat’s arguments that her dress design was a work of artistic craftsmanship, and that her dress-making patterns were of the kind referred to in the Regulations (because they did not have the right kind of writing on it, apparently). He therefore found that the clothing made by Mr Le did not infringe Ms Muscat’s copyright. However, he nonetheless found that Mr Le’s own dressmaking patterns did infringe Ms Muscat’s copyright, because the patterns were not “articles of manufacture” as Mr Le’s garments were. As the judge observed, the overlap provisions do not catch “plan-to-plan” copying.

No decision was made at that time on the question of the damages to which Ms Muscat might be entitled. The Dolly Girl stretch pants were not infringements, but the patterns for making them were, and since the stretch pants could not be made without the patterns, then possibly the damages awarded could be more than nominal. If so, it would appear that, yet again, the copyright/design overlap provisions did not work as expected. Would the position under the new provisions be any different?

The new overlap provisions

The amendments set out in the Designs (Consequential Amendments) Act 2003 are designed to provide clarity to this area of the law, but have not lived up to the promise of an unregistered design right. It may be that the amendments are no clearer than the provisions amended.

The amendments feature principally a curious change to the definition of “corresponding design” in section 74 of the Copyright Act. A “corresponding design” is now limited to “visual features of shape or configuration”. The existing definition is therefore changed to remove reference to the word “design” as well as the exception with respect to “a design consisting solely of features of two-dimensional pattern or ornament applicable to a surface of an article”. It appears that a court is meant to conclude that the omission of the words “pattern and ornamentation” which appear in the definition of “visual features” in section 7 of the Designs Act 2003 has the same effect as the former exception of two-dimensional pattern and ornament. The amendments also extend the operation of the overlap provisions to the shape of a product disclosed in a complete specification of a patent application or in a design application published in Australia.

The essential features of the existing overlap provisions are otherwise preserved. Where a corresponding design has been applied industrially (or included in a patent application and published), it is not an infringement of the copyright in the design to “embody... that or any other corresponding design in a product”. The definition of “product” in section 6 of the Designs Act 2003 may be broader than an “article” under the 1906 Act, although the definition is exceptionally obtuse and uninformative. It seems to be defined as anything which is “manufactured or hand made”, but appears to be the thing that is made for sale - and hence would not include a dressmaking design of the type found to be a copyright infringement in Muscat v Le.

If these amendments have the effects intended, however, it is an unfortunate side-effect that artistic works which are not registrable designs (for example, those which depict methods or principles of construction) will lose their copyright protection, and for no good reason. Even the limited protection that unregistered designs have against “intermediate copies”, as illustrated in Muscat v Le, will be lost by virtue of a new section 77A which will also eliminate copyright protection against copies made “in the course of, or incidental to making a product (the non-infringing product), if the making of the product did not or would not infringe copyright in the artistic work because of the operation of [the copyright/design overlap provisions]”.

It must be understood that it is the intention of the legislators that Ms Muscat will be denied a remedy against the flagrant copying found to have been perpetrated in that case. The only saving grace of the new provisions may be that, since design applications will no longer be examined as they were, the cost of filing a design application may be so much lower (it should be significantly less than filing a trade mark application) that Ms Muscat might be persuaded to lodge more of her creative designs for registration under the new Act before they are put on the market.

Many of Australia’s trading partners, including New Zealand and the United Kingdom, have accepted dual copyright and designs laws without any adverse effects, and it is hoped that legislators will eventually resist the pressures of interest groups in this area to recognise that there are many areas, such as the fashion and engineering industries, where the registered design system, or at least its novelty requirement, is simply inappropriate.

1 Per Roxburgh J, Klarman (H.) Ltd v Henshaw Linen Supplies [1960] RPC 150, speaking of Design Rule 26 of the United Kingdom Designs Rules, upon which Regulation 11 of the Designs Regulations (Cth) is based.

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Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this bulletin. Persons listed may not be admitted in all states or territories.
Peter Knight
Peter Knight