From October 2016 to March 2017 the team is joined by Guest Kats Rosie Burbidge and Eibhlin Vardy, and by InternKats Verónica Rodríguez Arguijo, Tian Lu and Hayleigh Bosher.

Friday, 8 November 2013

Debate - Should the UK have criminal penalties for design infringement?

The IPKat was delighted to be invited to the event that took place last night put on jointly by ACID and DMH Stallard. The topic was Clause 13 of the Intellectual Property Bill, which introduces criminal penalties for infringement that consists of copying of a registered design (with defences if the registration is reasonably considered invalid). The question was whether such criminal penalties should be introduced and also whether (as ACID is campaigning for) they should be extended to include unregistered design right infringement.

This Kat was delighted to be the moggy who attended and it is probably particularly necessary to remind readers that he writes in no official capacity and certainly does not speak for the IPKat team as a whole. He has no idea of the views of his fellow Kats on these topics.

The lines of debate were drawn up along lines that will be familiar to those who have followed the issue of criminalising infringement of intellectual property rights generally. Speaking broadly in favour of criminal provisions in respect of both registered and unregistered designs were:

Dids McDonald of ACID organiser of the event and campaigner for Clause 13
Nick Kounoupias of DMH Stallard who kindly hosted the event and chaired proceedings
Lord Clement-Jones, LibDem Peer who steered the Bill through the House of Lords where it was introduced
Sebastian Conran the renowned designer
Kieron Sharp of FACT, who spoke from his personal experience of how criminal enforcement really works in reality.

Speaking against criminalisation was Jan Vleck of Reddie & Grose but on this occasion wearing the hat of the Chartered Institute of Patent Attorneys.

The arguments in favour of criminalisation generally were as follows.

Designers, particularly small designers, feel that they have no effective remedy when their designs are copied because of the high cost of civil litigation in this country. This copying is said to take place frequently including by larger retailers who are confident that any legal action will be out of the reach of the smaller player. This is amply supported by anecdote, and the IPKat can add examples from known litigation in the UK that certainly supports the view that if you have a good design someone at some time will copy it. Coming from this view, the supposition is that criminal provisions will act as a deterrent to this cynical behaviour and will also add a further effective remedy when the copying is blatant and egregious.  It is furthermore said to be essential to extend criminalisation to unregistered designs because so few designs are registered and most small businesses have to rely on unregistered rights.

The contrary view, put forward on this occasion by CIPA, but also broadly shared by the IP Federation (who to the regret of all speakers were not able to be represented at this event, but whose position paper can be read here), is that the criminalisation provisions will not be effective as its proponents hope, as they will not be dissuasive to current practices, and will actually be chilling to legitimate inspiration.  A concern of CIPA is that it is the very designers themselves who are seeking these provisions that will find themselves threatened with criminal sanctions, perhaps by large overseas corporations, for activities that the designers have assumed are legitimate.  CIPA is also very concerned that the infringement and validity of registered or unregistered designs is a difficult and specialist matter and that the criminal justice system is not well suited to consider this.

Kieron Sharp pointed out that the rhetoric against criminal sanctions came from people who had little knowledge of how the system worked in reality (for example in the case of trade mark and copyright infringement).  This is a fair criticism, and this Kat would be interested to learn more on how criminal sanctions for design infringement would play out in practice.

This Kat has spent long enough in the company of former Kat and Katonomist Nicola Searle to know that policy should be evidence-based. And to use the delightful phrase that he saw the other day - the plural of “anecdote” is not “evidence”. There was precious little evidence on either side although this Kat feels that the burden should lie on the side proposing to alter the status quo.  (Readers may recall in this context the recent post from Ashley Roughton calling for a more evidence-based approach to the issue of counterfeiting.)

The problem is that it is very difficult for those involved to be objective about design infringement.  What one person sees as legitimate inspiration another will see as blatant copying.  There has already been a spat in the correspondence pages of The Times between Roger Burt, President of CIPA and Sebastian Conran, which seems to this Kat to revolve around this distinction.  Sebastian Conran took exception to Roger Burt writing that “In some areas of design it is commonplace for mass market goods to be inspired by more exclusive goods”, although Mr Conran’s letter made clear, and he also stated last night, that he considers “inspiration” (or “referencing”) to be acceptable, and it is only “direct copying” or “slavish copying” that is problematic. Mr Conran has also quoted ACID statistics that “94% of those canvassed said copying was blatant and deliberate”, which to this Kat suggests that this assessment has been very subjective.

The law reports are replete with cases where it appears that claimants genuinely believed that they had been ripped off, but the evidence failed to demonstrate it.  This Kat therefore suspects that in some of the anecdotes where companies are complaining that they could do nothing when their designs were stolen, the objective facts of the case will be rather different.

This Kat is troubled by some of the arguments in favour of criminalisation.  He has heard last night and read in the ACID literature (which he dutifully took home and studied) appeals to the fact that some other countries (apparently Spain, France, Italy, Germany, Norway, Sweden, and Poland) have criminal provisions for infringement of unregistered and registered rights, but he knows that no country in this list has an equivalent to unregistered design right in the UK and that the criteria for the level of originality and aesthetic character that is required for protection of designs at all is higher in some of these countries.  So this comparison is misleading.  Also, if the argument is that other countries have such provisions, we need to know – are they used?  What is the criminal justice system in those countries?  Are the provisions successful to prevent the kind of malpractice that is alleged to take place in the UK?

The IPKat may not be able to
predict the future
The opposition to criminal provisions has been dismissed by ACID as “from mainly patent-led lawyers and academics”.  This is odd.  This opposition comes from the most dispassionate group whose main concern is that the provisions will not achieve the desired aims and will actually come back to bite those who desire them.  IT may be that the only way to find out whether these concerns are justified is to introduce the provisions and see.  In which case it is to be hoped that those patent attorneys whose warnings have been ignored will turn out to have been mistaken.

Finally, it seems to this Kat that the real problem is the cost of access to civil remedies, and it is in that forum that the solution lies.  IPEC its small claims track is hoped to be a real step in that direction, and so this Kat thinks that this will turn out to be a more relevant development.

14 comments:

Anonymous said...

Use of the word "evidence" in ACID materials always raises an eyebrow or two.

See this document (http://www.ipo.gov.uk/ipreview-c4e-sub-acid.pdf) and the yellow boxed comment on page 6 "Evidence: Out of 99 companies surveyed 85 out of 99 (89.7%) believed that infringement of unregistered
designs was blatant rather than inadvertent."

Surely that should be "opinion" not "evidence"? Or maybe "opinion in response to a leading question"

SG said...

"no country in this list has an equivalent to unregistered design right in the UK"

But they all have the unregistered community design right, no?

Andy J said...

I wasn't present at the event so my remarks are unrelated to what may or may not have been put forward in argument.
It seem to me that since RDR is readily available to designers, and not all that expensive, they should use it to protect their work, just as sensible businesses register their trade marks, rather than rely on the very weak protection available for unregistered trade marks or the tort of passing-off. Of course passing-off is not analogous to UDR either in the factors to be taken into account in deciding a case, or in the remedies.
Unregistered designs are a very wide category, and although the right arises automatically, as with copyright, at the time of creation, the requirement for originality is different. For example s 213(4) specifies that a design is not original "if it is commonplace in the design field in question at the time of its creation". That doesn't apply to copyright, where a work can be exceptionally banal yet still gain protection if the author can show the work originated from his own personality. This means that while it is relatively easy to deduce whether or not a piece of art or literature or music etc is protected by copyright, it is not so easy, even for the informed user to know if UDR definitely does or does not adhere to a particular design.
On the other hand, given that UDR is limited is so many ways (eg it excludes surface decoration) and has a relatively short term of protection, I can't help thinking it is an inadequate form of protection for any serious business engaged in producing high class works of design, such that they feel threatened by the rip-off merchants. Leave UDR as a purely civil matter available for the small time designers, and for products of very limited lifetime, and use RDR as the serious grown-up protection for those who are likely to face criminal copying.
If we accede to ACID's demands on this, how long will it be before they are lobbying for UDR to have the same term as copyright, using much the same arguments as were used to support the repeal of s52 CDPA?

Anonymous said...

I mentally have a hollow laugh when hearing about policy needing to be based on evidence. Policy has always been evidence-based. When I was a Civil Servant I once went on a course that included a module on official statistics. I learnt that government did not use evidence obtained from official statistical data to determine policy, but used it to support policy. The job of the civil servant was to identify and present to ministers the data that supported policy, while ignoring data supporting the contrary view. You could usually find some data in official government statistics to support diametrically opposite policies.

It would be nice to think that things have changed, but I won't be holding my breath. There seems to be sufficient (for government purposes) "evidence" to support either view here, so policy (or lobbying) will no doubt prevail.

Anonymous said...

Mr Conran considers it acceptable to make a copy which is inspired by or "references" a registered design. He only seeks to criminalise "direct copying" or "slavish copying" - copying which is "blatant".

The trouble is that none of those terms appears in clause 13. Clause 13 covers copying which is "exactly or substantially" to the design.

Where and how does the word "substantially" place the dividing line between "inspired by" and "blatant"? How can I be sure that a court will not say that what I have taken is sufficiently substantial?

And how does this "substantially" test relate to the normal civil test for infringement: a design "which does not produce on the informed user a different overall impression"? If my accused product produces the same overall impresion, is it not substantially to the registered design?

So any infringement is potentially a criminal offence, if I was consciously inspired by the registered design. Yet Mr Conran accepts that it shouldn't be.

This uncertainty is one reason why clause 13 is chilling, and will inhibit designers rather than helping them.

MaxDrei said...

I think Germany has long had wilful and blatant patent infringement as a criminal offence. But nobody ever seems to be convicted even though there's a horrible lot of ordinary patent infringement ongoing in Germany.

Perhaps there is a parallel with seat belt law and the declaratory purpose of law. Nobody gets convicted of driving without a seatbelt. But seldom do prosecutions need to be brought, because everybody who drives obeys this law.

We want the law to disapprove of counterfeiting, don't we? Well then, why not say so? Can we not trust the law enforcement agencies and the judges to enforce the law imaginatively and sensitively?

Anonymous said...

Max,
"405 Prosecuted in South Wales Seatbelt Campaign"
(Tuesday, April 16th, 2013)
Personally, when I see what goes on in other areas, I have no confidence in laws being enforced 'imaginatively and sensitively'. It may depend on whose opinions the enforcers are sensitive to.

Anonymous said...

"Perhaps there is a parallel with seat belt law and the declaratory purpose of law. Nobody gets convicted of driving without a seatbelt. But seldom do prosecutions need to be brought, because everybody who drives obeys this law."

You do not visit the States much, do you?

You could not be more incorrect - on any level.

Tim Jackson said...

MaxDrei

Do German criminal proceedings always have to be brought by a public law enforcement agency? Or do they allow private prosecutions, as in the UK?

If private prosecutions are allowed, you can't rely on the public law enforcement agencies being reasonable and only pursuing blatant pirates. This potentially changes the dynamics of normal commercial disputes which wouldn't be seen as piracy or counterfeiting.

Consider an example of a normal commercial dispute before Clause 13:

Apple: Dear Samsung, your tablets infringe our UK registered design. Stop it or we'll ask the courts to stop you.
Samsung: We don't believe we infringe. See you in court.
His Honour Judge Colin Birss (Patents Court): Samsung don't infringe. They're not as cool as Apple.
Sir Robin Jacob (Court of Appeal): We agree.

Alternatively, after Clause 13:

Apple: Dear Samsung, your tablets infringe our UK registered design. Stop it or we'll bring a private criminal prosecution.
Samsung (in private): Oh shoot, we don't believe we infringe, but the directors of our UK subsidiary face the possibility of 10 years in jail. Can we risk it? We're going to have to cave in.

Now consider a different normal commercial dispute. You're a small designer and you produce a new product which "references" a design belonging to a large multi-national. But it's not a blatant direct copy, so presumably ACID would say that shouldn't be a criminal case. Nevertheless, the multi-national threatens you with a private criminal prosecution. What do you do?

Anonymous said...

Tim,

That sounds like the Golden Rule (element 79, not the biblical one).

MaxDrei said...

Tim, I read you. My experience of this area in Germany (I admit, almost zero) is that one cannot bring a private prosecution and cannot get the authorities interested in prosecuting.

But border seizures is entirely another matter. My impression is that there is lots of action there.

Mike Wickham said...

As a recently retired patent attorney, I consider clause 13 an unnecessary piece of proposed legislation which may have all sorts of unintended and largely undesirable consequences if it passed into law by parliament. As a citizen of the UK, I am dismayed at a society which makes intolerance a virtue and imprisonment a panacea. I therefore hope that clause 13 is withdrawn by the government.

Mike W

Jan Vleck said...

I find it telling that whenever I have spoken to those strongly in favour of criminalisation of design infringement, the examples of "bad guys" they give are always high street retailers. Whilst I take the point made by Max Drei above that simply declaring something a criminal offence may stop some people doing it (I suspect the generally law abiding rather than the criminal), I have yet to be shown an example of something which warranted imprisonment.

As Darren suggests, the real problem seems to be a perceived difficulty in enforcing existing rights rather than nasty people getting off.

MaxDrei said...

Good comment from Jan Vleck. Germany is far far more litigious than England. But that is because bringing a civil action in the German courts is so cheap (compared with England). Your lawyer, and the court, levy fees set in Official Scales, proportionate to the "value of the action". Small matter, small fees. You know before you start, how much you will have to pay if you lose. Think of it as ADR with the added spice of injunctive relief.

Is that why people in England do not come to the idea of enforcing right that they have bought at heavy cost?

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