BE PREPARED – IT’S NOT TOO LATE!

When you stroll around the fair after you have set up your booth, you may see your main competitor displaying your design; or you might see them in a meeting with your favourite distributor on the first day of the fair pulling a catalogue out of his pocket in which all your designs are shown – half price and under a brand that isn’t yours. What can you do? First of all ensure that you have tools to act swiftly and effectively in such situations. Hosea Haag from ACID Accredited law firm Hammonds in Munich gives some advice and guidelines about what you can do before the Fair

WHAT IS THE MOST EFFECTIVE LEGAL REMEDY AT HEIMTEXTIL? A PRELIMINARY INJUNCTION!

If you find someone infringing your intellectual property rights at any trade fair in Germany, what you want to achieve is a Preliminary Injunction immediately to stop them marketing and selling infringing products.

IGI members who exhibit at Heimtextil will discover that Germany is a very favourable IP legal jurisdiction in that a Preliminary Injunction may be issued by the courts only hours after it is applied for – without a warning and without an oral hearing. It usually obliges the infringer of your intellectual property rights to stop offering, distributing and displaying the infringing product immediately after it is served on the infringer by a bailiff on the fair. This includes the obligation to stop displaying catalogues, price lists, offering on the website and so forth. Any infringing products may be taken by the bailiff at the fair immediately. In some circumstances even non-infringing products maybe confiscated to secure the costs of the Preliminary Injunction proceedings.

Other remedies are not quite as effective for the fair. Any proceedings on the merits or any preparation would take more time than you have at the trade fair. They cannot stop the offering at the fair and cannot avoid that the infringer approaches your customers with copies of your products and take respective orders. Due to the territoriality of intellectual property rights, you may win proceedings on the merits in Germany but may not receive a title to interdict delivery according to an order placed at the fair if neither the infringer nor his customer is domiciled in Germany (there are exceptions to this general rule for the Community design and trade mark within the European Union). Therefore, proceedings on the merits may be a good measure to take if you want to avoid infringement without the time pressure of the fair. For the fair itself they don’t help.

You could also – perhaps because you may have had good relationships to the infringer of your intellectual property rights in the past – think about sending a warning letter first. But this also is only a real threat for the infringer if you can show that you are prepared to go to the courts, again with a Preliminary Injunction.

If the infringement or the legal situation is not clear cut, arbitration should also be considered.

Last but not least, Preliminary Injunctions are relatively cost effective in Germany. Depending largely on the complexity of the case, the average costs involved in obtaining the Injunction are probably less than 5.000 EURO. If you have done your homework – see below – it can be much less. Court fees and lawyer’s fees have to be born by the losing party according to statutory provisions in Germany. If the case is not too complex, the amounts the infringer has to reimburse to the right holder can fully compensate for the costs of a lawyer.

DO YOU HAVE THE CORRECT REGISTERED RIGHTS TO BE ABLE TO APPLY FOR A PRELIMINARY INJUNCTION?

A Preliminary Injunction can be based on any infringement of any intellectual property right. Of particular interest for the wallpaper industry may be: design rights, trade mark rights and copyright. An additional protection may derive from unfair competition law.

The easiest way to achieve a Preliminary Injunction is to assert infringement of a registered right. Of the above mentioned these are registered design rights and trade mark rights in Germany. The second, less favourable option is to show infringement of non-registered rights, for example of the so called non-registered Community design or copyright, because proving in particular the ownership of a certain right and proving the exact scope is more difficult.

WHAT STEPS CAN YOU TAKE BEFORE HEIMTEXTIL?

To have a Preliminary Injunction granted, you need a clear-cut case of infringement. If you only start acting at the fair, it may be hard to establish such a case before the fair is over. You would give up opportunities to substantially enhance your position.

BE PROACTIVE – REGISTER YOUR RIGHTS

Registration of IP rights effectively means that you have a piece of paper, a certificate which says you “own” the rights. . Of the above rights, designs and trade marks may be registered with effect for Germany. Both trade marks and design rights can be registered nationally in Germany or you can obtain a Community Trade Mark valid in 27 Member States or a registered Community Design. Trade marks and designs may also be registered internationally with the WIPO and designate the territory of Germany. The registration process in all cases requires fulfilment of only few formalities and maybe handled in a relatively short time. All necessary information can be found on the respective web pages of the German Patent- and Trademark Office (http://dpma.de/english/index.html), the Office for Harmonization in the Internal Market (http://oami.europa.eu) and of the World Intellectual Property Organisation (http://www.wipo.int). In order to get the scope of protection you actually want within a reasonable time I would nevertheless advise to consult a lawyer for registration of your IP.

KEEP RECORDS:

In all cases, keep all records – it is mandatory if non-registered rights shall be the basis for an attack. Providing a design audit trail behind new designs is key. For those relying on non-registered rights, ACID members can make use of the free Design Data Bank which can provide valuable independent evidence of the date they are received by the ACID office.

If you want to base a Preliminary Injunction on copyright in Germany, you have to show that you are the owner of the copyright. The owner of the copyright according to German law is initially only the author. Therefore you have to get all your designers to give written declarations that your company is entitled to invoke all intellectual property rights included in designs that have been developed by your company. If you cannot show for each individual design who the author is and by which declaration the copyright in the design was passed on to you by this individual author, it is not possible to get a Preliminary Injunction based on copyright.

If you want to base your Preliminary Injunction on a non-registered Community design, you will have to prove that you were the first to introduce this design into the market but no more than three years before the trade fair. Also, whereas the registered Community design gives you an exclusive right, as an owner of a non-registered Community design you must be prepared to produce evidence that the infringer knowingly copied your design and did not develop it himself.

In order to prove the validity of your rights, which may be necessary for design rights as well as copyright, you will have to show how your rights are distinctive from what designs have been on the market before. Therefore, it is advisable to keep records on what other designs have been on the market by yourself and by competitors before you developed your design. As a consequence, all design research made by your designers should be kept.

MONITOR THE MARKET:

When the trade fair comes closer, watch the market carefully. The sooner you know about a possible infringement, the more effective an attack on infringers can be prepared. Check your competitors’ websites for advertisements of their products. Check big distributors’ websites for what they offer, possibly order products that you suspect maybe infringing your rights and maybe displayed on the fair through a dummy like your lawyer, check the exhibitors sites that want to exhibit on the trade fair and check the trade fair website. If you come across any possible infringement, talk to your specialist IP lawyers. However, as most courts in Germany do not grant Preliminary Injunctions if the infringement was known for more than one month before the Injunction was applied for, I would advise you to check for possible infringements at the earliest four weeks before the fair.

If you find an infringer, try to get all details of the company, its legal form and its legal representatives. To have this information at hand when necessary saves time and money – as is true for all the suggested steps.

Prevention is better than the cure! If you have not done any of the above so far, doing it now will help you substantially if you should suffer from an infringement of your rights. Better still would be that a fair would not have counterfeiting at all!

Hosea Haag can be contacted on 0049-(0)89-207028343 or during the exhibition by mobile 0049-(0)179-5273436 or email hosea.haag@hammonds.com

Below, Hosea Haag from Hammonds, Munich.

ACID will be present at the ACID Accredited Exhibition Interiors Birmingham 2009 which promises a complete showcase of the best in classic and modern, indoor and outdoor furniture and accessories.  The ACID Stand will be in Hall 1 D30 where we will be available for help and advice on all IP issues. One to one IP clinics are available in the following subjects:

       Design Protection
       Responding to Pitch/Tenders
       Brand protection
       IP Health Checks
       Exhibiting protecting new designs/ranges 
       Brand expansion using licensing
       Brand expansion through franchising
       IP focused industry standard agreements
       What’s in a name – trade marks

Interiors Birmingham is the ultimate sourcing solution for the trade interiors industry. Running over 4 days at the NEC Birmingham, from the 18-21 January 2009, this unmissable event is free to attend. Whether you are a retailer, interior designer, architect or contract buyer, Interiors Birmingham is perfectly timed and formed to provide the one stop shop for all your sourcing needs from high end bespoke furniture to volume or practical pieces.

IP clinics will also be held during 2009 at: 
ACID Accredited Spring Fair Stand www.springfair.com 1-5 February inclusive,
Autumn Fair, NEC www.autumnfair.com 6-9 September 2009
100% Design www.100percent design.co.uk (dtba) ,
Decorex www.decorex.com (dtba) 

For further information visit www.interiorsbirmingham.com

We will also be supporting all exhibitors of ACID Accredited exhibitions with the ACID Exhibition Protocol – an on the spot mediation service should IP infringements be discovered.

2008 saw the busiest ever 100% ACID exhibition stand, with enquiries from both exhibitors and visitors seeking help and advice on practical design and brand protection issues. Jo Crouch, of ACID Accredited Law firm DMH Stallard,  fielded queries at ACID’s one to one IP clinics and also skilfully handled a potentially explosive situation between two exhibitors. One standholder complained that his latest garden furniture design had been copied and was on display on another stand. Overnight, evidence of design ownership (in the form of signed and dated detailed design drawings) was obtained enabling Jo to be satisfied that rights ownership belonged to the complainant.

An approach was made to the alleged copyist and resulted in the immediate removal of the product from the other stand for the rest of the show. The most positive aspect of the protocol, apart from achieving a result with no legal expense, was that the two parties agreed to meet the following week to discuss a possible licence royalty agreement. Following this mediation (to date there have been over 2000 over the last ten years at ACID accredited exhibitions) Dids Macdonald said “This is a classic example of how grass roots mediation is such a powerful tool for exhibition organisers to demonstrate their support of original design. After all, exhibitors pay thousands to exhibit and need assurances that with ACID’s help, alleged copying complaints can be dealt with swiftly and effectively with specialist IP resources.”

On a less positive note, yet again, sadly, the ACID stand was inundated with complaints about the lack of ‘no photography’ policing at the show – ACID intends, on behalf of ACID members – and all other exhibitors – to work with Exhibition Organiser Reed to address this prior to 100% Design 2009.

ACID celebrated its 10^th year supporting exhibitors at Decorex International and this year witnessed the least amount of copying complaints. At the same time there was a significant increase in a raised awareness about intellectual issues and a full house at the ACID one to one IP clinics.

Adam Aaronson (above) , a former director and current exhibitor at Decorex said, “Original design is the lifeblood of our company. If that is eroded by copying, this completely devalues the craftsmanship and skill which goes into each and every piece of glassware that is hand blown. Decorex consistently sends a clear message out to all visitors of a zero tolerance to design theft and it is reassuring that copying statistics have been so significantly reduced”.

Exhibitions provide a terrific opportunity to show case new products. They are also the perfect environment for design thieves to see, photograph and steal your designs. A shot of your product mailed to a factory in the Far East can metamorphosise into a cheap look alike within days. So trade safe, be design safe and watch your IP! The following advice is offered to ACID Members during the exhibition season but is relevant for all exhibitors too.

ARE YOU HAPPY FOR YOUR PRODUCTS TO BE FREELY PHOTOGRAPHED?  IF NOT, HAVE A NO PHOTOGRAPHY POLICY! Remember with phone cameras, your designs can be sent across the world in seconds and could be mass-produced before you even pack up your stand! All exhibitors at Autumn Fair, Decorex and 100% Design are given an ACID No Photography sign in their exhibitor’s packs

DETERRENCE – ACID STAND SIGN – these have been created specifically to ensure all visitors to your stand know you are a member of an anti copying organisation, ACID, with a proven track record of many successful legal actions.

PROOF – ENSURE YOU HAVE DOCUMENTATION to say you own the IP rights or have a licence to market the goods that appear on your stand.

MAKE SURE THAT THIS INFORMATION IS EASILY ACCESSIBLE. In any dispute the onus is on the complainant to provide evidence of ownership, originality and date of creation.

DESIGN PROTECTION – CONSIDER APPLYING FOR A REGISTERED COMMUNITY DESIGN (RCD) www.oami.europa.eu. This is a monopoly right covering 27 member states and lasts for 25 years.

FREE ACID DESIGN DATA BANK – IF YOU HAVE NOT REGISTERED YOUR NEW DESIGNS – Don’t forget the ACID Design Data Bank is FREE and houses thousands of member’s designs – independent evidence to support your unregistered rights. 

IT’S VERY DIFFICULT TO TAKE ACTION at an exhibition if there is no design audit trail or evidence of ownership to support registered/unregistered designs.

ACID will have a high profile presence at the exhibition and will be supported by ACID Accredited Law Firms to give one to one advice at the IP clinics on a variety of subjects and help if you are unlucky enough to discover what you think may be a copy product.

ACID Accredited Exhibition, Interiors Birmingham, will take place at the NEC from 18-21 January 2009, a key time for buyers to source for the season ahead and to discover the latest trends and influences in the market. The event incorporates halls housing Furniture, Furnishing Accessories, Soft, Lighting and the design-led halls, Collection, Outdoor Collection and Lighting Collection.  Interiors Birmingham, organised by CMP, offers an unrivalled collection of traditional and contemporary interior products. The gateway to the UK’s largest gathering of industry buyers and decision makers attracting both the retail and contract market, Interiors Birmingham offers a complete experience across the whole spectrum of interior products. From volume to high-end, the halls provide the ultimate platform for exhibitors to promote their products and for buyers to be exposed to the entire interiors market. With over 1200 exhibitors and approximately 40,000 visitors, Interiors Birmingham is the UK’s largest interiors event. Packed with new and innovative products, the event also offers informative seminars and inspirational trend forecasts, resulting in a must attend event. www.interiorsbirmingham.com

Brand expansion – Is franchising for you, either as a franchisor or a franchisee?

At the Future Trends Seminar Forum at Spring Fair, NEC earlier this month, ACID explored the world of franchising with leading UK experts, Tim Bowyer, Director of Franchising, The Royal Bank of Scotland, Tom Bridgford Head of International Franchising and Patricia Jones, Head of IP at Hammonds, one of ACID’s Accredited law Firms.

So how does franchising fit in to your business model and is it right for your company?

Franchising allows a business with a successful product or service (the franchisor) to let other businesses (franchisees) operate under their brand in return for payment (royalty). Look at Macdonald’s - a classic example of taking a successful product, in this case the sale of hamburgers, sitting under a successful and distinctive brand. By using intellectual property (trade marks, copyright and know how), together with guidance and training this has allowed many franchisees, who pay a fee, to grow the business for Macdonald’s into a world-class example. Whether you like Macdonald’s hamburgers or not you have to agree that the business recipe has been a success!

The right franchisee is usually highly motivated and can bring new ideas and energy to the business relationship. They will invest their time in developing your brand and will take most of the risk. Because of their investment into the franchising relationship they will be committed to making it work and developing your brand.

To consider becoming a franchisor, key components of an agreement include a precise description of ‘The system’, i.e. exactly what is being licensed. Consideration should be given to the scope of the license i.e. what kind of outlets - which territories - via the internet - and whether this is an exclusive arrangement. Quality control and a comprehensive operations manual are key to any successful franchising operation, together with clear rights of termination i.e. how to end the relationship if it doesn’t work. Other vital considerations include how the fees and payment terms are managed and where funding will come from to develop a franchising strategy for brand expansion.

An enthusiastic Tom Bridgford of Hammonds explained to delegates, “Our franchising clients have experienced strong growth in recent years…one client has grown from nothing to 45 franchisees around the world in less that five years – a phenomenal success story”

Tom Bridgford, Dids Macdonald and Patricia Jones

Patricia Jones outlined the importance of intellectual property protection and summarised by saying ‘To the outside world, the franchisee and the franchisor are the same in that the franchisee uses the franchisor?s intellectual property i.e. know-how, brand and/or designs. By getting your IP house in order (with registered trade marks and registered community designs) you ‘own’ your brand or product and, therefore, have control about how it can be used, by whom and who takes responsibility if those rights are infringed. Successful franchises naturally suffer from copying but with registered rights it is much easier to pursue any infringements and there is also the potential, through registration, of indefinite exclusivity’.

Patricia used several examples of franchisors whose strength lies in trade mark and design registration including Bang and Olufsen whose brand strength lies in its cutting edge design integrity and precision engineering and technology.

With a wealth of well known franchise systems relationships under its belt, including McDonald’s, Toni & Guy, Kall Kwik, Spar, Vision Express to name a few, RBS’s (Royal Bank of Scotland) Director of Franchising Tim Bowyer outlined the reality of following a franchising route - ‘Franchising is no quick fix for brand expansion but with help from experts who have a track record in successful franchise operations, there is every chance of real success’. Key to the RBS’s role in this sector is knowledge and established relationships with franchisors and professionals within the industry, ‘We also have a national franchise team dedicated to helping franchisors and franchisees. This capability backed by bundled funding, credit ‘intelligence’ and corporate and commercial structured finance on leverage transactions can provide a comprehensive menu of support offering the right options. RBS are also experienced in the assessment and feasibility underpinned by credit assessment, sector information, training and financial analysis’.

Tim Bowyer

Following the successful seminar and positive feedback, the ACID team has decided to run this seminar again. Any interested parties should contact Jane Stephenson, ACID’s Membership Development Manager janes@acid.uk.com or telephone 0845 644 3617.

Tim Bowyer, Director of Franchising, Royal Bank of Scotland
Tim.Bowyer@rbs.co.uk
Tom Bridgford, Partner, Head of Franchising Group, ACID Accredited Law Firm, Hammonds Tom.Bridgford@hammonds.com
Patricia Jones PhD, Partner specialising in contentious and non-contentious Intellectual Property, ACID Accredited Law Firm, Hammonds
Patricia.Jones@hammonds.com

Judging by the sheer number of queries ACID dealt with at the one to one IP design clinics running throughout the show there is clearly a need to provide as much legal, practical and commercial education and advice as possible. Several exhibitors took advantage of ACID’s on the spot ‘Mediate to Resolve’ service with alleged copying complaints. These were dealt with quickly and no further legal action was required, proving, yet again, the effective use of mediation as a real alternative to litigation.

A quick reality check underlined that copying is unfortunately alive and well, but businesses need to establish what Intellectual Property rights they actually have before they can take any action and should always take advice from a specialist in the area before they do so. Jo Crouch of supporting ACID Accredited Law Firm DMH Stallard sets out a quick guide below on some of the rights and issues of which businesses need to be aware. IP law is complex and the following is not intended to be an exhaustive description of the rights. In each case where a question of copying arises individual legal advice should be sought. In particular, there are certain conditions of subsistence which apply to each of the rights and special rules apply to designs which have been commissioned or licensed.

UK Unregistered Design rights

No need to register, as the name suggests! However, the design must be original and it must be recorded in an original signed and dated design document. This right usually lasts for ten years from the first marketing date of articles made to the design. ACID members may send copies of their signed and dated drawings to the free ACID Design Data Bank. 3-dimensional features of the design of industrial articles are also protected, whether aesthetic or functional. However, rights holders should note that surface design is excluded from the scope of this right. Take, for example, a handle on an umbrella. The handle can be protected by unregistered design rights provided that the design is original and not already commonplace. However, any surface decoration on the handle would not be protected by the UK Unregistered Design right. A rights holder must also show copying has taken place in order to prove an infringement.

Community Unregistered Designs

Again no need to register! Limited protection for designs is also available throughout the European Union under the Community Unregistered Design right and lasts for only 3 years. In order to gain protection, a design must fulfil the test for absolute novelty and have individual character. Unregistered Community Design right comes into existence automatically when a design is first made available to the public within the EU. A rights holder must prove copying in order to succeed in an infringement claim and the right lasts for only three years from the date when it first became available in the EU.

Therefore, whilst it is a useful right, especially for the protection of designs with a limited life span in the market place, it is worth considering registered rights for products with longer shelf-lives as these rights provide much stronger and longer-lasting protection.

Registered Designs and Community Design Rights

Registered design rights protect the appearance of items such as, for example, jewellery, clothing or furniture, in so far as they meet the tests set out below. As the name suggests these rights require registration with an official body namely the Designs Registry at the UKIPO for UK Registered Designs and OHIM (the Office for Harmonization in the Internal Market) for Community Design rights in order to come into existence. www.ipo.gov.uk www.oami.europa.eu

To be considered for registration designs require absolute novelty and individual character. In essence, a design will be considered a ?new design? if no identical design (or no design whose features differ only in immaterial details) have been made available to the public before the relevant date. The element relating to ‘individual character’ will be satisfied if the overall impression it produces on the informed user differs from the overall impression produced on such a user by any design which has previously been made available to the public. The Registered Design lasts for a maximum of 25 years from the date of the application to register.

Copyright

Copyright protects original literary, dramatic, musical or artistic works. The author must have created the work through their own skill, judgment and individual effort, and not have copied it from other works. Copyright does not require registration in this jurisdiction but will only subsist if the work is recorded, in writing or otherwise.

Copyright lasts for a set period, most often the life of the author plus 70 years from the end of the calendar year of their death. No formalities need to be observed in the UK for a work to receive copyright protection. The primary purpose of copyright law is to reward authors for the creation of original works, that is, works where the author has expended independent effort to create the work. It is very important to appreciate that copyright law is intended to prevent copying but does not provide a monopoly. A similar or identical work may already be in existence but copyright may not be infringed if this has not been copied. By contrast, a registered design creates a monopoly and it is immaterial whether or not it has been copied in determining whether infringement has occurred.

Practical Advice

To ensure that IP rights are fully protected:

• designers should sign and date all of their documents.
• keep records of the design document and the design process with the date of the first marketing of the articles, which is often referred to as the ‘Design Audit Trail’. (This is invaluable evidence in any subsequent legal action).
• If you don’t want to be copied, – say so! and there is no better way than by using the ACID logo on websites, marketing material, design drawings, product labelling etc.

Members can take advantage of the ACID Design Data Bank which they are entitled to use free of charge throughout their membership. Call the ACID helpline for further information 0845 644 3617. The ACID Design Data Bank Officer, Sheila Carter, will file and save these designs in the Data Bank in order that ACID, as an independent impartial body, can verify the date on which the design was first made known.

It is vital for businesses to appreciate that the ACID Design Data Bank is not the same as registering your rights legally, but merely provides a helpful service for members to ensure that safe copies of their designs are stored and dated independently.

Groundless Threats

Individuals must be very careful when approaching potential infringers (as one might be tempted to do at an exhibition) and asserting their rights prior to obtaining legal advice. Certain provisions in the law relating to ‘groundless threats’ mean that any person who threatens another with proceedings for certain IP infringement could face action being brought against them if they cannot prove that the rights that they are asserting are valid and owned by them or the action they are taking does not fall within one of the exceptions. Objectively, a threat is made if what is communicated is understood by the ordinary recipient as being a threat of infringement proceedings. However, mere notification that an IP right exists or is registered does not amount to a threat of proceedings. It is usually difficult for the lay-person to make that distinction without taking specialist legal advice.

DMH Stallard Team

Increased industry awareness about intellectual property and trade visitors eagerness to find out more about design protection and brand expansion were the main themes for discussion at the ACID stand during Interiors 2008 at the NEC last month. During the one-to-one IP clinics a whole raft of IP subjects were covered with several exhibitors contacting ACID’s on the spot Mediate to Resolve service with alleged copying complaints. These were professionally and efficiently handled by the ACID Accredited Lawyers from the DMH Stallard team, led by Sarah Birkbeck and supported by Jo Crouch.

Sarah Birkbeck said, ‘I was particularly impressed by those who seemed to have their IP house in order. One company had a Registered Design portfolio so I was able to confirm the design ownership credentials of one particular product, which the company felt had been copied. By having this evidence available I was immediately able to refer to the Registered Community Design (RCD) certificate and compare this design with the alleged copy on another stand. In this situation, I could confirm, under the recent design law ruling, that the alleged copy did not satisfy the test for infringement. The MD of that particular company was able to have the benefit of free ‘on the spot’ expert IP legal opinion which clarified his position there and then.’

In another alleged copying case, the benefit of being able to access registered community design certificates enabled the DMH Stallard team to advise on several instances where look-alikes had been discovered. Jo Crouch added, ‘There seems to be some confusion about the criteria for design protection and I think is important to note that for a design to be eligible for protection under the EU it must be ‘novel’ and have ‘distinctive character’ and, of course, be original and not copied. In short, rights are bestowed by Governments to reward design originality. Design protection is not available for products that are commonplace, however, one should not confuse ‘commonplace’ with the fact that a product which has design protection may have been copied so much that people assume that is commonplace, take the iconic Bombo stool, for example, whose owners have asserted their IP rights in many successful legal actions.

Those planning to exhibit in the future should ensure that by following some simple guidelines they can gear up their intellectual property protection by taking a few precautionary steps.