The Henry Smiling Vacuum Cleaner (shown left) is a familiar sight to many consumers. He may even make the chore of vacuuming seem like a happier task.

However there were no smiles on the faces of Numatic International Limited (“Numatic”) who make the Henry when they came across Qualtex UK (“Qualtex”) marketing a vacuum cleaner (shown above right) at the Cleaning Show in the NEC in Birmingham last year. Qualtex’s product was essentially a mirror image of the Henry Smiling Vacuum Cleaner, but without Henry’s smile and name, and in a different colour.

Over the years, Numatic has built up substantial goodwill and reputation in the combination of distinctive features which make up the Henry Smiling Vacuum Cleaner, and it was for this reason that when Numatic took Qualtex to court alleging passing off, they won their legal battle.

The court held that consumers could be confused into thinking the prototype model designed by Qualtex had an association with the Henry Smiling Vacuum Cleaner if it were to go on the market. The Judge commented that “whilst a different colour had been chosen for the base, the bowler-hatted lid was in shiny black, just like Henry…”.

Joanna Potbury from DMH Stallard says “Successful products like this often attract copycats and there remains a common misconception that making a number of changes will let you off the hook from a legal perspective.  This case shows that if you think that someone is trying to ride on the back of your success, the law is there to help you.”

This 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.

Mr Jose Manuel Barroso
President of the EU Commission
Karel De Gucht
EU Commissioner to External Trade

June 2010

Dear Sirs

Established in 1998, the Alliance Against IP Theft is a UK-based coalition of 20 associations and enforcement organisations with an interest in ensuring intellectual property rights receive the protection they need and deserve.  Our members include representatives of the audiovisual, music, video games and business software, and sports industries, branded manufactured goods, publishers, retailers and designers.

The Alliance is concerned with ensuring intellectual property rights are valued in the UK and that a robust, efficient legislative and regulatory regime exists, which enables these rights to be properly protected.   We are active members of the UK IP Crime Group and the EU Observatory on Counterfeiting and Piracy.

I am writing in support of recent correspondence you will have received from Dids Macdonald, Chief Executive of ACID (Anti-Copying in Design) and a member of the Alliance.

Like ACID, we are disappointed that the current draft of the Anti-Counterfeiting Trade Agreement (ACTA) allows for a partial exclusion of industrial design rights.  Given that design can often not rely on other protected right such as trade marks or copyright, this exclusion weakens and undermines the role that industrial design rights play in today’s economy.   We are also concerned, given the importance of this document, at the impact it will have on the wider debate on the need for more effective enforcement of all intellectual property rights.

We urge the Commission, in its further negotiations on ACTA, to actively lobby for this exclusion to be removed and the same protection given to industrial design rights as afforded to trade marks and copyright.

Yours sincerely

Susie Winter
Director General

Cc: Dids Macdonald, CEO ACID
Nick Kounoupias, Chief Legal Counsel, ACID

When they discovered that one of their competitors, Four Seasons, appeared to be trading off the goodwill in their hugely successful Vancouver Premium collection, Mosley Trading Company Limited, instructed ACID Accredited lawyer Niall Head-Rapson of McDaniel & Co to write a letter before claim. This has resulted in an undertaking from Four Seasons that they will no longer use the name ‘Vancouver’ without permission and they have paid a contribution towards Mosley’s legal costs.  Mosley Trading Company Limited, which trades as Besp-Oak Furniture, has secured trade mark registrations for the use of ‘Vancouver’ and ‘Vancouver Premium’ as brand names for this key collection.

Besp-Oak MD, Steve Mosley said, “We invest heavily in designing and developing our furniture ranges and are determined to send a clear message to all our competitors. We have a sound intellectual property strategy and we will assert this at every opportunity. We are market leaders of oak furniture in the UK wholesale market and for many years we have had to endure people imitating our stock and trading off the back of our goodwill. This has to stop. The Vancouver range of furniture has proved extremely popular with sales over the past four years in excess of a value of £20m. Any actions by third parties which erode this market share will be taken seriously.”

Dids Macdonald, ACID’s CEO said, “As a result of intellectual property reviews for our corporate members, we have been able to advise many companies in this sector of the necessity to be proactive in the protection of their intellectual property, including trade mark registrations. In the 21^st century, any company hoping to survive the downturn needs to keep a keen eye on the bottom line – the safeguarding of their intellectual property, their know-how.”

The furniture industry is one of the most copied sectors within the creative industries. One of the most effective ways that design-led companies can protect their new designs is to register any new designs with OHIM (Office for Harmonization in the Internal Market). European design registration ensures monopoly in a new design for 25 years in 27 member states. Being in possession of a registered design makes it much easier and more cost effective to take action against alleged infringers because there is a numbered certificate which confirms “ownership” of the design. The basic criteria to register a new design are that no identical design has been made available to the public and that it has individual character. This means that the appearance, or overall impression, is different from the appearance of other already known designs. Clearly it cannot be a copy of someone else’s design. Trade mark registration is very important too, after all, if you build up a significant reputation under the name by which you trade or you have brought out a successful product range associated with a name, it doesn’t make sense not to protect it against those who may trade on your goodwill.

Besp-Oak Furniture is the brand of choice for over 250 garden centres nationwide.  Over 30 indoor and outdoor furniture collections are available, ensuring that there is a style or range to suit everyone.  Besp-Oak are proud to be market leaders within their domain, continually spearheading the development of new designs which are certain to surpass any preconceived expectations of what oak furniture has to offer a home. www.besp-oakfurniture.co.uk

This month IP Doctor Andrew Lee, of ACID Accredited Law Firm McDaniel & Co, looks at issues associated with UK companies who wish to work with non-EU manufacturers and agents.  General rules apply to all working relationships whether at home or abroad.  Firstly - ensure that you have the correct legal agreements in place.  Secondly -  research the prospective business/agent thoroughly.  Thirdly – become familiar with the design laws which operate in the particular territory that you want to work within.

Andrew Lee

Q·         What do I need to have in place to work with a foreign manufacturer?

A.           A written agreement that sets out the terms clearly is essential. You need to document important information such as the price to be paid, delivery times for goods, quality control and design approval.  You should also look at who takes the risk of delivering the goods to you.

Not only do you need a clear agreement but you need it with someone reputable. Try and find out who they may deal with in your sector and do a little research. It would be good to ask if you can have a chat with a couple of their clients.  If you can, make sure the customers are local to you (i.e. your country) so that you can check the references you are given.

There are also some practical steps you can take. Is the manufacturer financially sound?  You don’t want them to go bust with your products undelivered.  Ask around, perhaps do an internet search to see if there are any good or bad things being said about the manufacturer.

A good, long term relationship works for both sides and becomes more productive the longer it is in place because it will become mutually important to maintain.

Q.         I would like to sell my product in America but I understand the design laws are different there.

A.         America does not have the versions of unregistered design rights that are available in the UK and the EU. Therefore if you have a product  that is industrially produced you will not have any protection in America for acts taking place there. American law can also differ from state to state.

Americans can rely on copyright but this may not be available to Europeans for items which attract Design Right over here.  It is possible to seek an American Design Patent which is granted on the ornamental design of a functional item. Design Patents are a similar concept to a registered design and will protect you for shapes. They are generally valid for up to 20 years from the date of filing.

Don’t forget to communicate your IP policy on your website and on your marketing material. A simple statement such as, “All intellectual property rights are and will remain the property of (insert your name).  Any infringements will be taken seriously.”  By including this statement you are ensuring that all with whom you deal will know that you value the intellectual property you create.

Q·         I want to work with a foreign agent but do not know if the contract should be drawn up under UK law or Chinese law.

A.         Preferably UK law because if it is in Chinese law you will need to seek advice from a Chinese lawyer over its interpretation and any disputes will need to be heard in Chinese courts. This could prove expensive for you as you will need Chinese lawyers to interpret the contract for you.  It is easier if the contract is under the law of your residence as your local lawyer will be able to advise you and if there is a dispute, your local lawyer will be able to guide you through the process. The China/Britain http://www.cbbc.org website has some very useful tips on helping you do business with China.

Q.           I have a registered design in the UK.   Do I need to have one in China where it will be manufactured?

A.           Your UK registration is territorially limited to acts within the UK. Therefore if any copies are made in China your UK registration will be of no effect unless those copies are then imported into the UK when the registration will bite. It is possible to obtain a Chinese registration however enforcing this could be costly and difficult. It could make more sense to have a strict agreement in place with the manufacturer and obtain an EU registration which would cover all of the EU. This would mean if any copies were made in China and then brought into anywhere in the EU, you could act.

Q·         My design has been copied by a foreign manufacturer but I can’t afford to take action in China and would not know where to start.

A.         This could prove costly and expensive. As most copies made in China are for importation into the EU and the UK it could be better to go after those who are having the copies made and then importing them.  This could be a UK company rather than the Chinese factory. Often the first instance of market entry for new products is a trade event/exhibition. Due diligence in checking exhibitions for potential copies is an effective way of identifying these and taking action. ACID has had many instances of being able to offer advice at trade fairs and its Accredited law firms have been able to act quickly and effectively when knock offs are discovered.

ACID member Lindy Lou Ltd, designers and suppliers of see-through umbrellas, have shown how a proactive approach to Intellectual Property rights can reap dividends. This resulted in a formal undertaking from fellow Spring Fair exhibitor Sunrise Bags not to sell or import the look alike products in the future. Sunrise Bags also gave a commitment to deliver up remaining samples in their possession and reimbursed Lindy Lou’s legal costs.

Dids Macdonald, ACID’s CEO said, “Often exhibitors do not follow up copying complaints formally after the show leaving them wide open to further potential problems. Formal undertakings play a key role on which to rely should any further look alikes enter the market place. Publishing successful settlements also sends out a clear message about Lindy Lou’s strict IP policy within this sector.”

Regular Spring Fair exhibitors Lindy Lou were exhibiting at the Fair, one of the main international giftware events held at Birmingham NEC, in February this year when they discovered a fellow exhibitor, Sunrise Bags, displaying copies of two of Lindy Lou’s umbrellas, which were protected by European Community Unregistered design right.

Lindy Lou immediately telephoned the ACID mobile IP helpline to get specialist advice. Spring Fair has been an ACID Accredited Fair for many years and, as such, supports ACID’s presence to help in alleged copying issues. ACID is assisted by specialist IP lawyers from ACID Accredited law firms. By using the ACID Exhibition Protocol, Lindy Lou, with help from Andrew Lee of ACID Accredited law firm McDaniel & Co, was able to communicate their complaint to Sunrise and an on the spot mediation took place. Sunrise agreed to remove the complained of products for the duration of the show. Lindy Lou, however, instructed McDaniel & Co to follow up the complaint with a formal letter of action, which was hand-delivered at the show, in order to obtain formal undertakings and delivery up of any copies.

Andrew Lee of ACID accredited law firm McDaniel & Co comments, “This case is a great example of

two things. Firstly, how useful the Unregistered European Community design right is particularly for products that have novel features resulting from the material the product is made from or its colours and pattern. Secondly, Lindy Lou took a very proactive approach once they were aware of an infringement. Within a few hours, Sunrise had been served with a letter before action.”

Andrew Lee of McDaniel & Co.

Carolyne Davis of Lindy Lou comments, “We found ACID and their accredited lawyers very easy and clear to get along with. They explained the law and our rights in a way that we could understand and in a way that gave us the confidence not to let anyone copy our exclusive designs now or in the future.”  www.umbrellasatlindylou.co.uk

The Sentinel newspaper, circulated in Staffordshire and South Cheshire reports on the trial of six men who have been found guilty and are awaiting sentence for their part in an international plot to smuggle 25 tonnes of counterfeit soap powder into Britain.

The gang arranged for “low grade” detergent to be shipped from South East China to Felixstowe to try to flood the black market with fake Persil. The detergent, which had no bleach content, was then driven to a warehouse where the gang hid 2,900 empty replica Persil boxes, which were described as “almost perfect” copies of the real thing. But their scam failed after chemicals giant Unilever hired a private investigator and they were caught red-handed.

Five of the six men admitted possession of an infringing article with a view to sale between September 1 and September 30, 2008.  A sixth man was found guilty after denying the charge. Chester Crown Court heard the detergent was shipped from Jinjang in the Fujian province of South East China to Felixstowe on a container ship CSLC Asia.  It was then transported to a unit at the Phoenix Centre on Winsford Industrial Estate which was raided after Unilever received a tip-off from a member of the public.

Peter Moss, prosecuting, said: “At 10.55am on September 23, 2008, in a joint operation by Cheshire Police, Cheshire West Council and Trading Standards, officers raided the unit at the Phoenix Centre and found an Aladdin’s cave of detergent. Individual bags of detergent each weighing nine kilograms were found along with flat pack boxes which had been assembled using a ‘wooden contraption’.”  The court heard Unilever’s private investigator had been tracking the gang’s moves since the detergent arrived in Felixstowe on August 22, 2008. The replica boxes followed around two weeks later.

The court heard the investigator was aware that a van bearing the logo NJN Trade Supplies, a company set up by Charlesworth and Campbell and based at High Carr Industrial Estate, Chesterton, was being used to transport the goods.  Prosecutors believe the Chesterton site was a planned distribution centre for the boxes of fake powder and the detergent was collected from Felixstowe and driven to the warehouse.  All six have been found guilty and are now awaiting sentencing.

ACID comment, “This is a classic example where criminal sanctions can result in infringers being prosecuted for a crime.  ACID Lobby is still campaigning for criminal sanctions to be available to design right holders too, who may also wish to take action against copyists.  This, together with changes to the criminal damages regime would make an even playing field for companies – irrespective of what intellectual property rights they are holding.”

Copying issues were also covered by BBC News also reported on the largest ever seizure of counterfeit goods by UK police.  Counterfeit seizure

This month we have asked IP Doctor Andrew Lee of McDaniel & Co. to answer questions we regularly receive regarding designs and products which have a combination of existing elements alongside new design input.

If anyone has specific questions they would like us to address for the next issue of the e-newsletter please e-mail jane.stephenson@acid.uk.com who will choose a selection of the best questions for our April e-mail.

• I paint pictures of famous people such as Audrey Hepburn, Marilyn Monroe etc. using photographs that I have obtained. Am I infringing copyright of the photographs?

Assuming the photograph is still in copyright, you could be infringing copyright. This is because photographs are specifically protected as artistic works pursuant to the Copyright Designs and Patents Act 1988 and an infringement will occur if the whole or a substantial part of the photograph is reproduced, in any material form, without the copyright owner’s permission

However, take the situation where you reproduce the photograph but in doing so you reproduce it using a degree of skill, such as the use of a mosaic technique, then you may yourself have a copyright in your finished work. In other words you might infringe copyright in the original photograph but yourself have acquired a copyright because of the skill and thought used to make the reproduction. There may then be issues as to whether your copyright is enforceable or whether you need to make terms with the photograph owner to exploit your work.

• I create boxes to hold stationery – which are covered in a Laura Ashley fabric – do I have any rights in the final product and will I get into trouble for selling my product?

It is possible that the fabric purchased from Laura Ashley may have some form of copyright protection such as a print or pattern. However, provided the material you buy is genuine, and not counterfeit, you will not infringe copyright by that use as you are not making a copy of the fabric nor are you then selling it to the public for the first time. These acts were done by Laura Ashley, or through another party with Laura Ashley’s consent and therefore their rights are what are known as “exhausted” to prevent further circulation of that particular piece of fabric.

In terms of your rights in the finished product, you will not own the copyright in the pattern or print of the fabric because that is likely to be owned by Laura Ashley.  You may have rights in the other pieces of your product such as the shape of the box, provided you designed the shape. You may also sell the product under a particular brand or name which you may have unregistered rights in and which you could convert to a registered trade mark. 

Whether you have any rights in the combination of your box with the fabric is debatable. It could be that the combination itself is new and of individual character and thus may be protected by European Community Design right.   However, as the fabric design would have been available before you made your product it is arguable that the product is not new or not different enough from the prior art to be considered new. It may also be possible that the owner of the copyright could object to that use, however this area of community design law is presently uncertain as the right is relatively new (2002) and there has been little case law.  You will however be in a much stronger position to claim rights in the finished product and prevent others copying if you have designed all of the relevant parts yourself.

• A rival company has used one of our products as part of a photograph to publicise their own goods.  Can they do this?

It will depend on the circumstances. It could be that your product has unregistered rights in it such as copyright on the packaging and it is arguable that the photograph reproduces, without your permission, the packaging which is protected by copyright. It is likely the company has deliberately incorporated your product into the advert for the purpose it can be seen so that use cannot be said to be incidental.  Furthermore, if your product is successful, or sold under a particular brand or name for which you have developed a reputation, it could be possible to mount a passing off action on the basis that people reading the advert may be confused into thinking you have endorsed the other companies goods.  Each situation is a matter of fact which you should seek advice upon.

• Surely it is OK to re-use/download a picture or video shown on a website – after all it is in the public domain?

There is an argument that people who upload material on the internet are impliedly consenting to the subsequent use of that material by others. However, the default position is that if you download a picture or a video from a website, you then make a “copy” of that work on your own computer because making a copy of a work includes storing it in an electronic form. By making that copy, on the basis that the original work is protected by copyright, then you will prima facie be infringing that copyright.

This is then subject to whether the rights holder has consented to that download for example in their terms and conditions of use on the website, or a statement saying the content can be used provided an acknowledgment is given. In addition the purpose for which you have used that work may come within some of the special defences to copyright infringement.

However, in summary, it would be dangerous to assume you are allowed to download such material simply because it is on the internet.

• I have copied someone’s work but I did not know that this was not allowed or that the person concerned was the owner of copyright. Surely that is a defence?

Unfortunately not. The primary acts of copyright infringement, such as copying a work, are acts of strict liability subject to any statutory defences. This means the ‘doing of the act’ itself is sufficient for an infringement, irrespective of your state of knowledge. Innocence is no defence.

There is a limited defence which provides that if you did not know, and had no reason to believe, that copyright subsisted in the work to which the action relates, the other person is not entitled to damages against you, but without prejudice to any other remedy (this means that person can still get an injunction or an account of any profits you have made from using the work). However this defence is narrow and will be of limited application, likely only in circumstances where the term of protection of the copyright has run out or where the type of work copied is of such a character that it ought not to be protected by copyright.  The basic point is that if you have any doubts about what you can and cannot do, speak to a lawyer before you do them!

ACID’s  latest article from the IP Doctor, Andrew Lee of McDaniel & Co., covers  another of  the subjects for which we receive frequent queries and ACID Generic Agreements are featured this month. ACID and their Accredited Law Firms worked together to produce a range of legally binding standard agreements which are simple to use and can be saved on your system as an electronic document for use on further occasions.  They are extremely economical and available to all.  If you are an ACID member they are discounted and you can also telephone the legal hotline for advice on which agreement you need and how to use it.

You can find the whole range of agreements by visiting www.acidtrading.eu.com or by visiting the main website at www.acid.eu.com and clicking on the ACID Trading tab at the top of the screen.

GENERIC LEGAL AGREEMENTS

Intellectual property rights are like any other form of property. They can be dealt with in a variety of ways. They can be sold, licensed, mortgaged, for example. Quite often however, when two parties enter into an agreement in respect of intellectual property, they do so without legal advice or without documenting the agreement. That can have a number of consequences and there is a raft of intellectual property case law which has at its foundation the problem that the parties conducted their arrangement informally and did not reduce it to writing. So, clarity of ownership is key!

Below are examples of common questions asked where the use of an ACID Generic Agreement would have helped to avoid a subsequent problem.

I am a fabric designer and I have designed a new print. A manufacturer of furniture wishes to use that print and apply it to furniture for sale. I do not want to sell the print outright as I would like to have the option of using it myself in the future.  How can I best protect myself?

In this situation you are looking to allow another to use your design but retain ownership and receive financial benefits from doing so. The best option therefore is to licence the use of the design to the manufacturer. The starting point should be to have a form licence agreement drawn up, the foundation of which could be the ACID royalty/licence agreement. It is important that the agreement is reduced to writing for a number of reasons:

• It provides commercial certainty to both parties as to what the agreement between them is.
• There is no ambiguity as to what the manufacturer is licensed to do, how long it is licensed to do it for, on what types of products it can use the design and whether you will be at liberty to grant licences to others.
• The terms of payment can be specifically set down such as whether you will be paid a one off licence fee or a percentage royalty per sale made by the manufacturer or a combination of both.

I am a freelance designer who is regularly commissioned by clients to produce a wide variety of products and designs. I have a problem where a client is alleging that they own the rights in the product I have created. We did not have a written agreement; the deal was concluded informally over the telephone. How can I ensure I am better prepared next time?

The issue of the ownership of commissioned works is complex and these were outlined in previous Q & A’s. It is always advisable to deal with the issue of ownership of commissioned works before any work is undertaken when preliminary negotiations are underway. In that regard the ACID Freelance Designer Agreement is extremely useful. This document will allow you to expressly provide for the issue of ownership. In addition, if you already have your own written terms of business, the content of the freelance designer agreement can be incorporated into those terms as additional clauses dealing expressly with IP ownership.

You may wish to retain legal ownership of the intellectual property in the designs you produce but grant the customer a licence to use the design. The customer would, in any event, have an implied licence to use the design for the purpose it was commissioned. Alternatively, you could be happy to agree that the customer will be the owner of all intellectual property rights once payment for the work has been received. Again, by reducing this agreement to writing, there is no ambiguity.

A manufacturer has asked to see some prototypes and samples of my work so that they can give me an idea of the costs of producing the product for me to commercially exploit. Is there anything I should be aware of and what can I do to ensure I am protected?

This is a relatively common situation and the risk is that an unscrupulous manufacturer could decide to  take your product, produce it themselves and sell it as their own. Many people approach commercial situations with good intentions, however, it is wise to err on the side of caution. There is a simple way of maximising your protection in this situation with the use of the Acid Intellectual Property Agreement. This is a short agreement that you would give to the manufacturer and ask them to sign before sending them any prototype, or sample of your designs.

The agreement outlines that you are the owner of the samples and any intellectual property rights. The manufacturer by signing the agreement would acknowledge that and also agree not to do anything with the samples without your written consent. Of course, even if they sign the agreement this does not mean they will not do anything wrong. There is no guarantee. However, if they have signed the agreement then you have in writing their confirmation that you own the designs and that they will not misuse them.   Without such an agreement they could complicate matters by alleging you gave them permission.

I am starting a new business, is there anything I should have in place for trading with customers?

Acid offer the Standard Terms and Conditions template generic agreement. The template is a basic set of trading terms and conditions with additional clauses that can be added or taken out depending on the circumstances, but with emphasis on ensuring any intellectual property issues are covered. This will allow you to clearly set out to customers the terms upon which you do business. For example, how long will a customer have to pay for the goods or services? What happens if they do not pay? What is the procedure for returns? Are you to retain ownership and title until payment is made?

Without a set of written terms and conditions it can be difficult to know on what terms you are conducting business, which makes any disputes costly and time consuming to resolve. This way, by having a set of Terms and conditions, the terms are clearly set out. The generic agreement can also be amended to be tailored specifically towards your business needs.

I am worried that by asking the company I am dealing with to sign agreements that they will refuse to deal with me or assume I think they are not trustworthy. Should I still insist they sign the documents?

Yes! The first sign of concern in such a relationship should be when the other party is not keen to have formal agreements in place. This should raise your suspicions immediately. After all, if they are a bona fide company who do not intend to rip you off, then there should be no problem with formalising the agreement. Remember that the agreements are also for their benefit. By having everything in writing it also allows them to conduct the relationship with clear boundaries. Furthermore, it should be of comfort to them that you take intellectual property rights seriously and wish to do things correctly.

www.acidtrading.eu.com

Firecraft and Focal Point Fires plc have settled the litigation between them in relation to the FIRECRAFT mark. The terms of the settlement agreement prevent Focal Point Fires from using the FIRECRAFT mark in the future.  Focal Point Fires has already rebranded its fires “eko fires”. 

Focal Point Fires started to use FIRECRAFT for gas and electric fires in 2001 and registered a trade mark at the Trade Marks Registry of the UK Intellectual Property Office.

Last year Firecraft were successful in the Registry in applying to invalidate Focal Point Fires’ trade mark for the word FIRECRAFT. 

Firecraft based their application on the fact that they had substantial goodwill in the name FIRECRAFT in stone fire surrounds and that Focal Point Fires’ use on fires would be likely to damage the goodwill Firecraft had developed over the years. 

Firecraft issued proceedings against Focal Point Fires in the High Court in March 2009 for passing off.  In summary judgment proceedings, the Judge, Peter Smith J, found for Firecraft, stating that following the Registry proceedings, Focal Point Fires could not defend themselves against the passing off action.

Firecraft

Firecraft is a family firm providing high quality hand carved stone fireplaces from its factory in Hinckley which it has supplied to satisfied customers Nationwide for nearly twenty years.  For more information visit www.firecraft.co.uk or telephone 0116 2697030.

Focal Point Fires plc

Focal Point Fires plc is the UK’s largest manufacturer of fuel effect fires with both electric and gas fuel effect fires featured in an extensive product range, which includes flueless catalytic gas fires, traditional inset gas and electric fires and electric stoves.

The eko fires range is a revolutionary collection of gas and electric fires combining stylish design and innovative technology from eko fires.

If there are any queries arising from FIRECRAFT gas and electric fires which have in the past been sold by Focal Point Fires and its authorised distributors, members of the public are asked to contact eko fires at http://www.ekofires.co.uk/contact.asp.