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Monday, 11 November 2013

More on Clause 13 - should copying of registered and/or unregistered designs be criminal?

On Friday of last week, this Kat posted a report on, and some thoughts in relation to, the event on Thursday evening concerning Clause 13 of the Intellectual Property Bill.  This is a proposal to make it a criminal offence to knowingly copy a registered design.  ACID, which has campaigned for this, considers that this proposal does not go far enough, and wants criminal provisions for copying designs protected by unregistered design rights as well.  The post has attracted a number of comments.  ACID has also written a note of the event.

As was previously reported, CIPA has warned against any such criminalisation.  Vicki Salmon, who is chair of the CIPA Litigation Committee, sent in this comment.  The IPKat is happy to post the remarks as a follow-on from the original report, which broaden the debate, and are too long for a simple comment.  Over to Vicki:

Even if it is right that there should be a criminal offence connected with registered design infringement, there is serious concern as to what activities should be so heinous as to be made crimes.  I feel we are in danger of making a copying a criminal offence, when that is currently not even a civil tort.

One of the issues of concern is what is the activity which is to be criminalised?  The wording of the Bill is “A person commits an offence if, in the course of business, the person copies a registered design so as to make a product exactly or substantially to that design, and…….”  I have two problems with this test.  First that there is no requirement in this section for the copy to be an infringement and second that registered designs are unexamined and so there is no requirement for there to be any originality in the design being copied.  If the wording of the offence was limited to a slavish copy or a blatant or deliberate copy, then I might not feel so concerned.  But it is not.  The wording that will be put to the jury is "copy" and the resultant product is not just the slavish copy, it is also a product which is substantially to the design.

The Apple v Samsung design litigation [see Katposts here, here and here] shows that the scope of a registered design has to be considered in the context of the existing art and that while on first sight one might be tempted to consider Samsung's tablet as being substantially to Apple's registered design, the civil courts found no infringement.  Do we want substantial commercial disputes as to who can compete with whom, in an important market place, to take place in the criminal courts?  Should important commercial companies looking to compete in a market place have to fear a private prosecution from a commercial competitor and with it the fear of conviction and issues of proceeds of crime?

Copy cat?
In the criminal provisions in the Copyright Act, the prosecution has to show that there is an infringing copy of a copyright work.  In order to establish a copyright work, there is a need to show that it is original.  There is no examination of a registered design.  It is filed.  It is registered.  The fact that the same applicant had filed for a nearly identical design earlier, is irrelevant to the grant.  Under the IP Bill it is for the defence to raise lack of validity or lack of infringement.  If this is raised with respect to a Community Registered Design, then it is likely that the criminal case will have to be adjourned as those issues are reserved to Community Design Courts.  These registered rights last a long time and the older they get, the harder it can be to find appropriate prior art.

Also, the test for design infringement is to do with whether the later one produces a “different overall impression” on an “informed user”.   Where are the obligations on the prosecution to deal with this?

To non-lawyers, issues as to whether or not there was infringement of a valid right can appear to be mere “technicalities” which should not stop a copyist from being convicted.  But these “technicalities” are fundamental to defining what we protect and what we are free to copy.

The criminal law is there to put people in prison.  It is not there merely to act as a deterrent.  So it is really important that the extent of a criminal offence is properly drafted towards the particular offending behaviour and not just laid out in broad terms for fear of allowing copyists too much wriggle room to get out of the offence.  The wider implications of potentially being caught up in a criminal prosecution is serious.  It is not an answer for ACID to say that ordinary businesses won’t be prosecuted.  If they won’t be prosecuted, then they should not have to fear that they might have committed an offence.

CIPA is continuing to lobby on this issue.  I would welcome further thoughts on the issues, the wording, etc.  I would particularly welcome examples of allegations of infringement of registered designs which turned out to be unfounded, especially if that could be accompanied with any views as to whether the initial case review might have led to a criminal case being started.

4 comments:

patently said...

I have direct and first-hand experience of a criminal trial under section 92 of the Trade Marks Act 1994, having been asked to help a client who was being pursued by Trading Standards. The goods in question (handbags) were probably civil infringements, but were not slavish copies and were certainly not counterfeits.

In the room were 3 magistrates, one magistrates' clerk, two barristers, one solicitor, three Trading Standards Officers, and myself. It quickly became clear that I was the only one who had the slightest idea what made a trade mark registration valid, and what was the test for infringement. As the clerk made clear, I was the only person who was not permitted to explain to the magistrates what either of those tests were.

The results were predictable from that point on. One witness was asked by prosecuting counsel whether the client's handbag might be mistaken for the proprietor's bag if spotted from the other side of the street. The trade mark in question was a decorative surface pattern in light brown on a dark brown background* less than 1" in size. Pretty well anything brown could be mistaken for that if viewed from across the street. Much play was also made of the similarity in design (handles, flaps, buckles etc) of the client's handbags with those of the proprietor... none of which was the subject of a trade mark registration.

The client was found guilty. On the advice of his (commercial) solicitor and (criminal) barrister, the client decided not to appeal as the fine would only be about £1,000 or so and an appeal would be much more expensive. In the end, the fine was about £1,500 based on the number of bags that Trading Standards had seized.

Then the Proceeds of Crime Act was brought into play. The client had to prove that every item in his warehouse had been obtained by legitimate means and that all his product lines were non-infringing, on pain of confiscation of the goods and of the proceeds from sale of past goods. In the end, the PoCA fine was £250,000. When I heard that, I tried to arrange a conference with competent solicitors & counsel to discuss a late appeal on the grounds of inadequate representation, but the client was tired of lawyers and the law, and wanted none of it.

And so, the combination of well-meaning but over-broad legislation with a Court trying its best to cope with a specialist area of law in which it had no knowledge, experience or ability, led to a miscarriage of justice.

In case you are wondering why my client was caught, he had supplied non-infringing goods in good faith to a shopkeeper who was later raided for selling counterfeits. His goods and his receipts were found, and he was then investigated in turn. So don't for a moment think it could only happen to other people's clients.

A thought: We are all told to practice only in the areas where we have the skills to advise our clients competently. Usually, this will merely be a subset of IP law. We would certainly be censured if we tried to use our litigation rights to defend a criminal suspect in court. Yet by these criminal provisions, we propose to ask criminal courts (i.e. lay magistrates) to make decisions on detailed issues of IP law.

*guess who...! :-)

Anonymous said...

How do the movie and music industires feel about the statement "when [copying] is currently not even a civil tort" ?

Vicki Salmon said...

Patently - many thanks for your example. Details duly noted - and copied out!
Anonymous - Copying per se is not a tort. It only becomes a civil tort when you have a relevant right which the law has said it will protect and for a finite period of time. So the music and movie industries know that copying a copyright work is a civil tort for life + 70 years. After that anyone can copy it for free. A registered design is not infringed by copying, only by producing something which produces the same overall impression on an informed user. A slavish copy might well meet that test, but an adaptation of a copy might not, even though it is a copy.
Vicki Salmon

Anonymous said...

Thanks Vicki - I appreciate the nuanced response.

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