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Title: Intellectual property rights: protection of designs and trademarks

Title: Intellectual property rights: protection of designs and trademarks

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Introduction

Intellectual property refers to creations of the mind and even though intangible assets, are so valuable that in some instances exceed the value of the fixed assets of the business. Registered designs and trademarks fall within this category of property. This paper aims at an in-depth evaluation of what registered designs are and their purposes, trademarks, and notes to analyze the exclusions of certain shapes from registration as provided under Article 3 of the TRD. After that, a distinction between the two (Design Registration and Trade Marks) will be drawn.

Additionally, the paper will critically analyze the decisions of Magmatic Ltd v PMS Int and P Simba Toys GmbH & Co v Seven Towns Ltd, among other decisions in a bid to establish whether registered designs and trademarks are adequately protected by the relevant legal regimes providing for them. The Trade Marks Directive and Regulation will also be looked into with a view to ascertaining the effects of its recent changes. The sufficiency or lack of it in the protection of innovators by the applicable law is also examined exhaustively in this paper.

Finally, the paper will end by making conclusions from the above analysis and preferring recommendations on how to tighten up the protection of intellectual property but with the interest of the public in mind.

Design Registration

The legal regime regulating the registration of designs commenced with the enactment of the Registered Designs Act, which was later on amended by the Copyright, Designs, and Patents Act, Registered Designs Regulations, the Registered Designs Regulations, and finally, the Regulatory Reform Order.

Design, as defined by Section 1 (2) of the Act, refers to the external visual appearance of the whole or parts of an article and in particular its shape, color, texture, material, ornamentation, lines, contours, and configuration. Registration of designs, therefore, protects such external appearance of the whole or part of an article for commercial use and prevents others from exploiting it to the detriment of the proprietor. Under Section 1A (2) of the Act, a design must satisfy two key requirements before qualifying for registration:

  1. Must be new and novel – This implies that it must not have been registered in the United Kingdom or anywhere else in the World; and
  2. Must have an individual character – An individual character is one whose overall impression differs from other overall impressions generated by other product designs on an informed user

Designs can be distinguished into two main categories;

  1. Aesthetic designs
  2. Functional designs

Aesthetic designs are designs that are applied to a product to make it appealing to the eye thereby giving it a competitive edge over other products. A functional design, on the other hand, is a design that is structured to enhance the performance of the product thereby giving it an edge over other products which perform the same function. The purpose of registration of Designs is captured under S.7 (1) of the Act which grants the registered proprietor exclusive rights over the registered designs thereby effectively prohibiting and preventing any unauthorized use by any other party. The period of protection is enunciated by Section 8 as a five-year initial term renewable at successive periods of 5 years up to a maximum of 25 years.

Trademark Registration

A trademark is a feature that distinguishes the goods and services of one party from those of another. It can take many forms from a name, word, phrase, logo, symbol, design, image, sound, shape, signature, or a combination of these features. Trademarks in the UK are classified either as registered trademarks or unregistered trademarks. Registered trademarks are protected by the Trademarks Act, 1994 as amended while unregistered trademarks are protected by the law of passing off.

The registration of trademarks has been identified as the most convenient and widely acceptable way of ensuring that the brand of every single innovator is adequately protected. The monitoring of Trademarks is undertaken by the European Commission and is concerned with identifying the best ways to employ in improving the accessibility and effectiveness of competition by business organizations and firms. Trademark registration in the European Union is done at two levels; either at the national level or the European Intellectual Property Office (EUIPO).

Section 10 of the Act  protects registered proprietors from 3 forms of infringement namely:

  1. Where both the sign and the goods and services are identical to the trademark and the products for which the trademark is registered;
  2. Where the sign is similar to the trademark and the goods or services are similar to the products for which the trademark is registered thereby causing or likely to cause confusion among consumers of such products; and
  3. Where the sign is identical to the registered trademark name but the products are different from those that the trademark name is registered, and the usage of such infringing mark is likely to dilute the distinctiveness of the trademark.

The key prerequisite requirement for registration of a trademark is that it must be of a distinct nature. However, even if a sign were distinct, Art 3(1) of the TRD excludes registration of such a sign if it consists of exclusively any of the following:

  1. A shape or other characteristic that exhibits the natural shape of the goods;
  2. A shape or other characteristic of the goods that is necessary to generate a technical or functional result; and
  • A shape or other characteristic of a good that substantially adds its value.

The main objective of the above exclusion provision is to prevent exclusive monopoly over such features thereby enabling wider access to quality goods by the general public. Registration of a trademark explicitly states the identity of the person who owns the mark, the rights of such person, and the extent to which the protection is applicable.

Unregistered trademarks, on the other hand, can be referred to as a common law trademark. It makes use of graphics, words, symbols, or images to show the distinction of its source. Unregistered trademarks enjoy protection under the common law. For instance, passing off is a tort meant to protect the goodwill such that a person is prevented from making a representation of his goods as those of another person. Passing off, therefore, is intended to promote fair competition. For claims of passing off to be entertained, courts would be invited to establish and determine whether there is an existing goodwill, that there has been misrepresentation by the guilty party, and that such misrepresentation has caused damage by the applicant.

In the case of Magmatic Ltd v PMS International Group plc (Comptroller General of Patents, Designs and Trade Marks intervening), Magmatic Ltd, the proprietors of a children’s ride-on suitcase known as “Trunki” owned a Community Registered Design with six monochrome images but with no surface decorations and with an outlook of an animal with horns. Magmatic Ltd commercially produced the Trunkies and offered them for sale. The Defendant, PMS International Group plc also started children’s ride-on suitcases with similar features which either took the shape of an animal with ears or an insect with antennae but the only distinction being their surfaces were brightly colored and decorated, unlike the Claimant’s Trunkies.

Consequently, the claimant commenced the action alleging infringement of its trademark and sought an injunction to restrain the Defendant from selling such similar articles and compensation by way of damages. In opposing the infringement claim, the Defendant argued that its suitcases created an overall different impression to that of the Community Registered design and thus was not infringing.  In allowing the claim, the learned Judge Arnold J reasoned that both the Claimant’s and Defendant’s products both had the shape of a suitcase and that therefore, the graphical impressions and designs were of no consequence in their defence.

Similarly, in Simba Toys GmbH & Co. v Seven Towns Limited (2016) the appellate court set aside the judgment earlier delivered by the General Court of the European Union In 1996, Seven Towns Ltd made an application for registration of the Rubik’s cube trademark. It was registered in 1999 and renewed in 2006. However, Simba Toys made an application to OHIM to have the trademark declared invalid for consisting exclusively of a shape necessary to procure a practical result as per Article 7 (1) (e) (ii) of the Council Regulations which prohibits registration of such marks.

The application was dismissed by both the OHIM and the Second Board of Appeal on the grounds that the mark was not a result of the nature of the Rubik’s cube itself. Simba Toys appealed to the General Court which similarly dismissed the appeal citing that it would not be possible for an objective observer to infer that the black lines are rotatable. The Court opined that Simba Toy’s line of argument was based on their knowledge that the lattices had a rotating capability. Consequently, it dismissed the appeal.

Dissatisfied, Simba Toys further appealed to CJEU. In allowing the appeal, CJEU noted that the General Court erred in assessing Article 7(1) (e) (ii) too narrowly by failing to assess the functionality of essential characteristics of the sign. It concluded by finding that the shape of the Rubik incorporated a technical solution and therefore did not qualify for registration. That being so, it invalidated the registration of the trademark.

From a study of the above cases, it is clear that by the jurisprudence set, registered designs and trademarks are not fully protected. The decisions set a bad precedent which is a blow to novel and ingenious innovations. They expose genuine trademarks and registered designs to infringement by unscrupulous business persons who would only need to make minimal alterations to the innovator’s article. The situation can only be remedied by the Superior Courts deviating from their line of reasoning in their subsequent decisions or better still, reviewing such decisions as Magmatic and Simba Toys in a bid to generate an outcome that protects intellectual property and rewards innovation.

Innovators use trademarks to help distinguish their goods using a unique mark. When launching new goods in the market, firms make use of marks to achieve a distinction between their goods and the ones that are already in the market. With time the marks earn goodwill and call for protection. The marketing of intellectual property rights is monitored by the World Intellectual Property Organization (WIPO). In marketing intellectual property rights, the different rights that exist determine the marketing strategy that is employed by an innovator. In brief, some of the trademark strategies that innovators use to acquire an advantage in the market are highlighted as follows;

Trade and service marks

A mark that is well crafted determines the success of the goods in the marketplace. Its uniqueness enables consumers to make a distinction between goods of different innovators according to their needs and tastes. A unique mark would also facilitate the penetration of a new product in a market so long as there is great care involved in the creation of the mark to make it more appealing to the majority of consumers. An innovator, therefore, needs to conduct a search to ascertain that the intended mark or a substantially similar one has not or is not already in use by another innovator.

An innovator who does not conduct due diligence to ascertain the existence or lack of the marks they intend to use for their novel goods or products risks court action to seek injunctive orders against them from further marketing products that use similar marks like the ones already in the market. The court would in the circumstances be invited to make a determination on the rights of the innovators as discussed in the two cases above.

Use of Collective marks

Corporations or business associations may decide to use collective marks for their products. This decision tends to benefit the Small and Medium enterprises due to the reputation relating to the origin of the goods or products produced by different enterprises by the collective marks. The goods or products might in most circumstances be varied, but the marks used to identify all the products are similar. Collective marks are important in cooperation between organizations, so that common resources are exploited equitably.

                                                 Effect of geographical indications

Certain products would be easily identified in the market as originating from particular regions because of inherent characteristics such as the soil in such places, the climate, or the expertise of the residents of a given location and therefore consumers develop confidence in such products with time. An innovator should, therefore, make use of such confidence and capitalize on the wide acceptance by consumers of goods from certain regions so as to differentiate goods and products in the market from those of other innovators.

Industrial designs

Since the market and economies have become more competitive, a design should be visually attractive so as to attract diversified consumers. The choice of design could go a long way in appealing to different categories and classes of consumers; consumers of different ages, cultures, and tastes. An innovator should have a design that is different from those already existing in the market so as to minimize the chances of other innovators claiming that their rights are being infringed as a result of the products introduced in the market.

Patents

An innovator can effectively achieve the protection and guarantee of their intellectual property rights by obtaining patent protection. The registration would prevent other innovators from adopting your trademark and therefore minimize greatly the likelihood of claims of trademark infringements. Patent holders also enjoy certain rights that result from obtaining patent protection. For instance, it leads to the opening up of the market for new businesses or associations with other business organizations.

Utility Models

In certain circumstances and depending on the jurisdiction where applicable, innovators should exploit the use of utility models so as to help in healthy competition in the market. The use of utility models is an effective tool in gaining an advantage over other competitors, especially in circumstances where the innovator who elects to use the utility model is in an active business competition where the use of technology is the determinant in ascertaining the player who controls the market. Utility models are commonly used by innovators who have not fully complied with or met the requirements of patents.

The EU Trademarks directive and regulation

Intellectual property holders in the European Union are protected by the European Union Intellectual Property Office and the European Union Trademark regulations. The new regulations provide and allow for the assignment and transmission of intellectual property rights. Registered trademarks can, therefore, be assigned or transmitted either in connection with the goodwill of a business or not.

The registration of a trademark by the proprietor gives him or them an exclusive right to the use of that trademark for goods and services or in connection with the provision of any service. The exclusive right would be infringed by any person who, not being the proprietor of the trademark or a registered user as the case may use a mark that is substantially connected or similar to the registered trademark.

However, the Regulations bring no impact on the protection of trademarks in the UK as they largely are a replica of the UK Trademark Directives. For instance, Article 7 of the Regulations on excluded registrations is an import of Art 3(1) of the TRD.

Conclusion

As discussed above, trademarks and registered designs as creations of the mind have given rise to rights that are negative in nature since the owner of such rights can prevent others from carrying out certain acts about the subject matter without consent. An inventor owns a right to his or her invention, and therefore, protection of such rights is necessary to act as a reward for the time, work, and risk taken in investing capital in innovation through the grant of a limited monopoly to ensure the enjoyment of the outcome of such innovation. The protection of innovators also functions in offering benefits to people by encouraging investment and innovation and provision of information that adds to the available knowledge in society.

Courts and other enforcement agencies should, therefore, ensure that the protection of intellectual property is done to encourage healthy competition in all commercial fields. The courts should in determining accusations of trademark infringement do so in a manner that encourages innovation and upholds the rights of innovators so as to encourage them to market their products or goods freely and within the confines of the applicable law.

 

 

Recommendations

There should be established a framework for the registration of trademarks and registered designs under a common system to make monitoring easier and prevent instances of double registration.

The penalty for infringement of intellectual property rights should be enhanced to be very punitive so as to act as a deterrence to people who wait to exploit what others have done. By introducing such punitive sanctions; both fines and imprisonment the aggrieved parties would appreciate such actions and encourage others to indulge in innovations.

Courts and other Enforcement Agents should refrain from adopting a restrictive approach in determining infringement claims and making decisions that water down intellectual property protection laws as was the case in Magmatic Ltd v PMS Int and P Simba Toys GmbH & Co v Seven Towns Ltd.

Bibliography

List of Cases

Magmatic Ltd v PMS Int. (2016) UKSC 12

Samba Toys GmbH U& Co. v Seven Towns Limited (2016)CJEU

Acts of parliament.

Registered Designs Act, 1949

Copyright, Designs and Patents Act, 1988

Registered Designs Regulations, 2001

Registered Designs Regulations, 2003

Books

Waelde, Charlotte, and Hector L MacQueen. Intellectual Property (1st ed. Cheltenham, UK: Edward Elgar, 2007).

Lambert J, Enforcing Intellectual Property Rights (1st ed. Gower 2009)

Norman H, Intellectual Property Law Directions (1st ed. Oxford University Press 2014)

Dworkin G and Taylor R, Blackstone’s Guide to the Copyright, Designs and Patents Act 1988 (1st ed. Oxford University Press 2002)

Finkelstein W and Sims J, The Intellectual Property Handbook (1st ed. ABA 2005)

Menzel P, Lemley MA. Intellectual property in the new technological age (Sweet and Maxwell 2003)

Janis MD, Din GB. Trademarks and Unfair Competition: Law and Policy. (Walters Kluwer Law & Business; 2014)

Kintner EW, Lahr JL. An intellectual property law primer: a survey of the law of patents, trade secrets, trademarks, franchises, copyrights, and personality and entertainment rights. (Macmillan 1975).

Callmann R. The law of unfair competition, trademarks and monopolies (Chapters 9-16:  32- 64. Callaghan; 1968)

McCarthy T, Trademarks and unfair competition. (Lawyers Co-operative Publishing Company; 1984)

Menzel P, Lemley MA. Intellectual property in the new technological age (Oxford University Press 2003)

Journals

Mansfield E, Intellectual property protection, direct investment, and technology transfer: Germany, Japan, and the United States. (World Bank Publications; 1995)

Rapp RT, Rozek RP. Benefits and costs of intellectual property protection in developing countries (J. World Trade. 1990; 24:75)

Ginarte JC, Park WG. Determinants of patent rights: A cross-national study (Research Policy. 1997 Oct 31; 26 (3):283-301).

McCauley-Libert C, Intellectual Property Protection (Manufacturing Confectioner. 1996 Jun 76:47-52)

Ginsburg JC. The Right to Claim Authorship in US Copyright and Trademarks Law (House L. Rev. 2004; 41:263)

Pattishall BW, Hilliard DC, Welch JN. Trademarks and Unfair Competition (Lexis Nexis Matthew Bender; 1998 Jul 1).

Vader D. Intellectual property law: copyright, patents, trade-marks.

Ginsburg JC. The Right to Claim Authorship in US Copyright and Trademarks Law’ (2004, Houston Law Review; 41:263-307).

Davis MH, Miller AR. Intellectual property: patents, trademarks, and copyright in a nutshell (Lexis Nexis 2012)

Schechter R, Thomas J. Schechter, and Thomas’ Intellectual Property: The Law of Copyrights, Patents, and Trademarks (Hornbook Series): The Law of Copyrights, Patents, and Trademarks. (West Academic; 2008 Mar 27). 

 

 

[1] Copyright, Designs and Patents Act, 1988

[2] Davis MH, Miller AR. Intellectual property: patents, trademarks, and copyright in a nutshell (Lexis Nexis 2012)

[3] [2016] UKSC 12 [2016] WLR (D) 126

[4]  (EC) No 207/2009

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