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UNITARY PATENT

In 2012 Member States and the European Parliament agreed on the "patent package" - a legislative initiative consisting of two...

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You take hand-drawn sketches of your idea to a Far Eastern manufacturer, whose draftsman draws them up into a detailed CAD file, makes a mould and supplies you. Who is the designer – you, or your Far Eastern supplier? And who owns the rights? That increasingly common scenario was considered (together with a host of other issues) by the Australian Federal Court in LED Technologies Pty Ltd v Elecspess Pty Ltd [2008] FCA 1941.

This case concerned combinations of light emitting diodes (LEDs) for cars. The proprietor brought an infringement action under two Registered Designs with statements of novelty as follows: "Seperate (sic) clip in lenses. Base to take a variety of 2, 3 or 4 combination lenses for stop, tail, indicator, reverse LED lenses, no visible screws."

A Mr Ottobre of LED Technologies brought undimensioned hand-drawn sketches (which he did not retain subsequently) to a Taiwanese company "M". He met and explained the drawings to a Mr Chao of "M". Following the meeting, Mr Chao "worked with M’s engineers to convert Mr Ottobre’s hand-drawn sketches into CAD (Computer Aided Design) format.” M subsequently made a mould for which they invoiced Mr Ottobre (the invoices included, without any separate allocation, the cost of creating the CAD drawings), and were paid by him, but there was no contract with explicit IP terms. M sent Ottobre a three dimensional computer model from which he printed the drawings used to register the designs.

In infringement proceedings, the defendant claimed that the design was invalid because Mr Chao and/or M were co-designers and therefore owners of the designs. The Court held that "Authorship of a design is in the “person whose mind conceives the relevant shape, configuration, pattern or ornamentation applicable to the article in question and reduces it to visible form”: Chris Ford Enterprises Pty Ltd v BH & JR Badenhop Pty Ltd (1985) 7 FCR 75, 80. On the facts just described, it is clear that Mr Ottobre is the person who conceived the relevant shape, configuration and pattern of the Designs and reduced it to a visible form; “M” simply converted that design to an electronic form in order to facilitate the production process. Put another way, it was Mr Ottobre, not “M”, who had the idea for dual and triple combination LED lamps in one base. It was Mr Ottobre who reduced that idea to visible form in the sketches. As the engineering drawings ... record, it was Mr Ottobre’s sketches which contained the features different from those in any other previous design. Accordingly, Mr Ottobre was “the person who created the design” and his company as his employer was the sole person entitled to be registered as its owner...."

Would this result also apply under EU design law? As we note in this issue, the ECJ decided in the FEIA case that the term “designer” must be given a European meaning, and there is no case law at EU level so far (and, indeed, little UK case law in the past) on the issue. But it appears to us to be correct: the same design could be drawn up in varying forms differing in immaterial details by different draftsmen without changing its essential identity, so designership will usually be established at the stage before preparation of production drawings.

If this decision is wrong on designership, Australian law provides that works created under contract pass to the commissioner – LED Technologies were therefore home on ownership even if they lost on designership. However, as we note in this issue, the FEIA case makes it clear that this is not so in Europe. Once more, the message has to be: even in what is predominantly a contract for production or tooling, think about IP ownership terms or you may have no rights to enforce.