Image of AndyThis month, Andrew Lee of McDaniel & Co looks at the effectiveness of design protection and taking legal action.

Q. What are the realities of protecting IP within the UK, the euro zone and worldwide? It seems protection and enforcement comes down to cost and some manufacturers feel they are unable to afford effective legal action?

A. If a design or manufacturing company is creating intellectual property through their innovation, an integral part of any IP protection strategy is allocating sufficient budget to register new designs, if at all possible, and to allow for a budget to enforce those rights if there is infringement. With easy access to the UK and European Community-wide protection for designs and trade marks, the cost is much lower than it used to be. If a company is registering a series of designs the cost reduces considerably so for 11+ new designs it is as little as 60 € to obtain a registered Community design which lasts for 25 years (renewable every five years) covering 27 EU member states. Many companies pay a small additional fee and defer publication (on the OHIM website www.oami.europa.eu) so that competitors cannot see their new designs before they are launched and marketed.

The advantage of having a registered UK or EU design is that taking legal action is easier and more cost effective because you have a piece of paper, a numbered certificate which says you own the design and it cannot be used by third parties without authorisation.

To ensure brand protection, there is an additional registration system for trade marks which can make registration more cost effective but there are no pan-national design registration systems outside the EU so national registration is necessary. Therefore, it makes sound sense to do a swot analysis of the countries in which your products will be marketed and allocate appropriate budget to ensure you have adequate IP protection.

Q. How can I ensure design protection in the USA?

A. The USA does not have a design registration system as such and it is necessary to apply for a ‘design patent’ in order to protect 3-dimensional wholly or partly functional designs. According to the United States Patent and Trade Mark office (www.uspto.gov) “Design patents may be granted to anyone who invents a new, original, and ornamental design for an article of manufacture.” Fees are expensive and it is advisable to instruct a local agent to draft and file the application.

Q. What are the pros and cons of registered and unregistered design right in terms of effectiveness?

A. Registered designs are the strongest form of protection because they give monopoly rights and can last for 25 years. UK Unregistered rights last for 10 years from the end of the year of first marketing but remember third parties may copy the design after 5 years provided that they pay you a reasonable royalty. In Europe, unregistered Community design right only lasts for 3 years from first being shown in public. If a designer/manufacturer who relies on unregistered Community design decides to register the design they must do so within a year the design is first shown in public. Often, designers who are constantly innovating will, if there are budget restrictions, test the market to see if a product is successful and then, if so, allocate registration budget.

Those relying on unregistered UK or EU design right (if they are ACID members) can send their designs into the FREE and unlimited use of the ACID Design Data Bank to give dated evidence of the origination of designs, pitches and tenders. www.acid.uk.com

Q.  Look alike products within my industry sector are prevalent, what is the best course of action when discovering an alleged infringement?

A. ACID’s advice is never to sue on principle. Establish what your objectives are in taking legal action and take specialist advice on the merits of your particular set of circumstances. Ask yourself, “If I take legal action against copyists, what do I want to achieve?” Consideration should be given to obtaining an undertaking that further alleged copy products will not be sold. Try to obtain damages to reflect quantifiable loss if any can be identified and obtain an admission of liability and your costs paid. Taking legal action does not necessarily mean going all the way to court. Often objectives can be achieved by a strong letter before action (LBA) in a cost and time effective way. Of ACIDs 400 settlements, less than 5 have reached a final Court hearing. Often, by taking legal action and obtaining a settlement this can be communicated in the trade press to reinforce your IP strategy and delivers a strong message that if anyone does copy you, you will sue them.

Q.  What is a letter before action (LBA) or a cease and desist letter?

A. The purpose of an LBA or “cease & desist” is to warn of possible Court action and offering an opportunity to provide evidence that they have not copied you or admit liability without expensive Court action. The LBA will normally give a time limit for a reply and will reflect established facts about the complaint to achieve, hopefully, an early settlement. Court Rules also require an LBA to be sent before any proceedings are commenced, except in very urgent cases. An effective LBA will take time to prepare – it is not just an ordinary letter written on solicitor headed paper. It encompasses every possible aspect to achieve your objectives in taking action against copyists.

An IP lawyer will need to be satisfied, beyond ANY doubt that you actually own your rights, just as you would when buying a house – think about what it costs to establish title when you are buying a property! You are relying on your solicitor’s experience to spot all the potential pitfalls to act in your best interests – they are relying on being provided with all the ammunition possible to fight for your rights.

Q. How effective is an LBA?

A. An effective LBA can often result in a speedy, cost effective settlement with many (if not all) objectives being met. Before taking action you should also consider the legal purchasing power of the opponent – there can be difficulties when two parties with unequal market power and resources resort to Court action.

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