Court applies Trunki test in baby bath case
The implications of the Supreme Court’s 2016 decision in ‘Trunki’ continue to be felt in the English courts, with the latest application of Trunki reasoning evident in the judgment of the IPEC in one of the cutest named decisions of the year, Shnuggle Ltd v Munchkin.
Shnuggle, the Claimant, is a UK company which designs, manufactures and sells baby baths. The Defendants (“Munchkin”) are a US designer and manufacturer of competing products and its UK indirect subsidiary and distributor. Shnuggle applied for Registered Community design (RCD) protection for a particular baby bath design in 2013. This RCD consisted of eight views of its design, with each view represented as a blue-coloured CAD image. In 2015, it launched a new version of this product and applied for a further RCD to protect this variant design, using line drawings to illustrate the design. It issued proceedings against Munchkin for, amongst other things, infringement of its 2013 RCD.
Munchkin did not challenge the validity of the 2013 RCD, but argued that it did not infringe because, following Trunki, the informed user would perceive the blue colouring of the CAD images as part of the registration, and this limited the scope of protection. Shnuggle attempted to persuade the judge that the blue colouring could be ignored on the basis that the informed user would see it as having no purpose except to indicate light and shade on a 3D object. Agreeing with Munchkin, HHJ Clarke commented that “if Shnuggle had wanted to register only the shape of the bath, instead of positively choosing the colour blue, it could have provided a line drawing (as it did for [a later RCD]) or rendered it in monochrome shades of grey”. The blue colour therefore had to be taken into account when assessing infringement.
In addition to other differences between the designs, the Court considered that the informed user would, when assessing the overall impression of the design, identify as a difference the predominantly white colour of Munchkin’s product.
Whilst the interpretation of the CAD images was not fatal to Shnuggle’s case, as HHJ Clarke said that she would have reached the same conclusion even if the 2013 RCD was not coloured blue due to other differences in the designs, it illustrates the continuing dangers of using CAD images for design registrations. Applicants should remain wary of using CAD images (and especially those with colour), as line drawings remain the preferred manner for representing shapes of designs.
Court refers questions on first disclosure of designs to CJEU
The IPEC referred the important question of what counts as a first disclosure of a design for the purposes of qualification for Unregistered Community Design (UCD) to the CJEU in Beverly Hills Teddy Bear Company v PMS International Group. The issue is as follows: must there be an event of disclosure that takes place in the territory of the EU for UCD protection to arise, or is it sufficient that the event, wherever it takes place, could reasonably have become known to the relevant circles within the EU?
HHJ Hacon concluded that the issue is not clear cut and that, as a “matter of widespread interest”, designers and others will benefit from an authoritative statement of the law, including parties who trade from (and will continue to do so post-Brexit) the UK. The CJEU will determine the issue under the terms of the Withdrawal Agreement, and so the progress of the referral will be watched with interest. For now, however, designers will still need to prepare on the basis that, after the end of the transition period, simultaneous disclosure or registration of key designs may be the safest way to protect their position in both the EU and the UK (subject to any agreement that provides for reciprocity in relation to designs first disclosed in the other territory).
The Claimant first showed its soft toy designs at a trade fair in Hong Kong, and then subsequently showed them in Germany. The Defendants accepted that the nature of the Hong Kong fair was that the design of the toys would have become known in the normal course of business to the circles specialising in the sector within the EU.
However, the Defendants argued that the effect of Article 11 of the Design Regulation was that a design must have been first disclosed in the territory of the EU in order for UCD protection to arise. The first disclosure in the EU was in Germany and therefore the designs, according to the Defendants, lacked novelty due to the earlier disclosure in Hong Kong. This is because the CJEU has previously determined that it is not necessary for an event of disclosure to take place in the EU when determining whether it has been made available to the public when assessing the novelty of the design.
There is no CJEU case law authority on whether the first disclosure for UCD protection must be in the territory of the EU, and so the judge considered the wording of the EU legislation, the German case law (which is in favour of requiring a first disclosure in the EU territory for UCD protection to arise), and the conflicting commentary in leading textbooks. His view was that the German court’s approach was correct i.e., that a first disclosure of a design must first take place in the EU to qualify a design for UCD protection. However, he recognised that the issue is not clear, and therefore decided to refer questions to the CJEU.
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Crimes of Fashion
Is it time for designers and fashion houses to turn to the criminal law to combat flagrant copying?
The Intellectual Property Office’s research into design infringement, published in November 2018, found that over 98% of a spectrum of designers from all sectors had reported infringement, and concluded that between 5% and 16% of those design infringements would amount to criminal offences had the designs in question been registered (the offence only applies to registered designs). Copyright and trade mark infringement prosecutions have a well-established track record, and designs in various sectors and industries have been protected through prosecution in other countries (such as Germany and Denmark). However, several seasons since the change in the law relating to designs and criminal offences, prosecutions for the design offence in the UK appear to be non-existent.
For more serious cases where prosecution is proportionate and necessary, for example, when dealing with repeat offenders or where a broader deterrent effect is required, maximum sentences in this area are up to ten years’ imprisonment and/or an unlimited fine. Whilst sentences of that length would inevitably be reserved for the more extreme cases, a more consistent and predictable sentencing regime has recognised the harm caused by this category of commercial crime and metes out appropriate punishments.
Allied to that is the potential individual liability of directors and managers; ancillary orders such as director disqualification; and, in addition the forfeiture of offending goods, Confiscation Orders may remove not just profits but entire turnover, as well as providing an effective mechanism for the delivery of compensation.
In the UK, private prosecutions, long used by the film and music industries, are seeing a resurgence as a route to obtaining justice on an individual basis whilst simultaneously having a wider deterrent effect. At a time when the criminal justice system is showing signs of strain, private prosecutions challenge the now-outmoded perception that criminal prosecutions are lengthy and cumbersome. By contrast, when conducted properly in a focused and proportionate way, it is possible to steer a carefully chosen private prosecution through the criminal courts in an efficient and effective manner.
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