Dear ACID members
Following the Prime Minister’s announcement of an Intellectual Property review to be undertaken by Professor Ian Hargreaves, I wrote to him welcoming this initiative. I explained that ACID members play an important role in creating IP and providing employment for many thousands of people within the creative industries and that ACID’s main objectives are to assist our members in the protection of their IP rights through education and awareness, prevention, deterrence against infringement and fast track support when their rights are infringed. I reminded him that, through ACID LOBBY, we are determined to ensure that design’s voice is heard loudly and clearly within IP policy.

In my letter I said that we are looking for a more level playing field for micro enterprises and SME’s to access a cost and time effective framework to address the growing problems of infringement, much of it emanating from China. China is a difficult country in which to do business and many find their IP is seriously at risk from local partners with little hope of redress because it is so difficult to take legal action in China.  For example out of the UK’s 250,000 designers 87% employ less than 10 people.

I outlined our disappointment with the last IP Review – the Gowers Report, whose mandate was to ensure that all intellectual rights were fully represented, to find that there was so little reference to design issues. The same was true of SABIP’s research documents where there was absolutely no mention of design. I therefore hope that Professor Hargreaves will ensure that design’s voice is heard within the consultative process.

Graph showing the word count for IP terms contained within the Gowers Report

Members may remember that Nick Kounoupias and I recently met with John Alty, CEO of the UKIPO, to discuss the inconsistencies which exist with regard to the protection of design rights in the UK.  Unlike copyright infringement, design right infringement is not a criminal offence and can only be dealt with by way of civil proceedings.  This gives rise to anomalies and inequality of treatment which are very damaging to hundreds of small businesses and designers across the UK and restricts the level of legal protection and support they can expect to receive.  I very much hope that the independent review body will ensure that this disparity is rectified to ensure that designers are properly able to protect their intellectual property.  Without this much-needed reform, the UK will be left with a damaging two-tier system of IP protection where infringement of one sort of IP is regarded as less serious and harmful than another.

In a disappointing response to ACID’s petition for unregistered design infringement to be afforded the same privileges as copyright infringement I was surprised by the Government’s claim, “That unlike copyright and trademarks, design right infringement can often be inadvertent!” ACID disagrees strongly as do many members, including Patrick Heeley, Managing Director of ACID member Villeroy & Boch who commented “I was astonished by the Government’s clear lack of concern in this issue, and the reference to design infringement often being ’inadvertent’. It is a disgraceful dismissal of the problem.” Villeroy & Boch employ 250 people in the UK.

If you would like to contribute to ACID’s response to the above IP Review or have any comments about Government’s statement that they believe most design infringement is “inadvertent”, I would be delighted to hear from you.

ACID is delighted to announce that it has adopted as one of its 3 charities, FIT The Furnishing Industry Trust. www.fi-trust.co.uk. FIT is an independent charity enhancing the lives of those who are working, or have worked, in the furnishing industry and who are now facing financial hardship or a personal crisis. They provide grants for desperately needed one-off items and weekly grants for individuals, couples and their families suffering ongoing hardship. The money they give transforms lives for people and their families in the Furnishing Industry.
Despite all the challenges that the current economic weather throws at us, I hope that 2011 will be very rewarding. My huge thanks, as ever, go to the terrific ACID team headed by Jane Stephenson, to our Accredited lawyers, McDaniel & Co & DMH Stallard, our ever growing mass of supporters and, of course, to you, for continuing to support the work we do.

Wishing you all a Merry Christmas and Happy New Year.

Dids
Dids Macdonald, CEO

Martin Moore & Co. is a specialist kitchen design and fitting company with several showrooms around the UK. In a joint project, they had agreed to use their design and expertise to create a bespoke kitchen especially for a photo shoot by one of the leading names in solid fuel ovens, AGA. The deal was that Martin Moore would provide a free kitchen for AGA so that the company could promote its ovens in a prestigious and design-led kitchen stage set. An express part of the agreement was that the photographic images could only be used by AGA with permission from Martin Moore.

Martin Moore was surprised, therefore, to see exactly the same image of their kitchen with the AGA oven on the website of a competitor kitchen manufacturer, J John D W Wood. To the consumer this could have provided confusion as to who had designed the kitchen and it would not be unreasonable to assume that the AGA oven was housed in a J John D W Wood designed kitchen. This prompted Martin Moore to instruct ACID Accredited law firm, McDaniel & Co. to send a letter before action to J John D W Wood who removed the offending photograph immediately.

Martin Moore says: ‘’ We were surprised to see our kitchen on another supplier’s web site. They were only claiming to represent Aga, but were most definitely giving the impression they had made the kitchen. Thanks to Acid membership and some excellent advice, we were able to have this misleading advertising removed. We will vigorously pursue those who infringe any of our design rights and our IP ‘’

Andrew Lee, a lawyer from McDaniel & Co. commented, “Often a shot across the bows can be a very effective means of achieving an objective. In this case the copyright in the kitchen image belongs to Martin Moore and they are entitled to exclude others from using that image without their consent.”

Dids Macdonald, ACID’s CEO said, “We are seeing this type of unauthorised use of other people’s images increasingly and would urge those who are using images on their websites to ensure that they have obtained the copyright owner’s permission to do so.”

Within a week of a cease and desist letter being sent to Skye Tiles by Fairfull Ltd., Skye Tiles have agreed to provide undertakings to deliver up any remaining stock of look alike tiles, make a payment of damages calculated in respect of the number of tiles sold and make payment of Fairfull’s legal costs in pursuing an alleged infringement on behalf of Benaya Art Ceramics for whom they are distributors in the UK.

ACID members Fairfull Limited use the Canadian company, Benaya Art Ceramics, to produce a number of their ceramic range. They also act as UK agents for Benaya and many of Benaya’s designs are exclusive to Fairfull.  Artist Patricia Bell has copyright in the artwork on the tiles as an artistic work. When Fairfull discovered that Skye Tiles were selling what appeared to be copies they decided, with Benaya’s permission, to take legal action as a precaution against potential lost sales as the exclusive distributor of Benaya’s products.

Fairfull instructed ACID accredited law firm McDaniel & Co at the Autumn Fair in September 2010, who advised them that the first step was to write a cease and desist letter to Skye Tiles putting them on notice of the infringement and requesting undertakings. Although Fairfull would be alleging infringement of copyright (an unregistered right and therefore requires proof of copying), the tiles offered by Skye Tiles were identical to those of Fairfull and therefore the only reasonable assumption was that copying had taken place. It was then incumbent on Skye Tiles to provide an innocent explanation as to why they were selling identical tiles.

Andrew Lee of McDaniel & Co comments: “Fairfull were determined to protect their market and because of their relationship with Benaya they also needed to take quick action against any copies of Benaya’s artwork. This again shows how effective a cease and desist letter can be and Fairfull ensured they had one prepared as soon as they were aware of the infringement. This is one part of an effective IP protection strategy in ensuring potential infringements are followed up immediately.”

Dids Macdonald, ACID’s CEO said, “A compelling cease and desist letter often produces a quick and effective result in an IP dispute at a fraction of the cost of taking Court action. It is also a very speedy means by which a business can reinforce its IP strategy to a competitor.”

ACID member Bentley Designs showed their true metal in an IP dispute by instructing their lawyers McDaniel & Co to send a cease and desist letter to Metal Beds Limited following discovery of a look alike bed called “Jewel”. This appeared to be a direct look alike of Bentley’s registered design “Krystal”.  Following receipt of the letter before action, Metal Beds agreed to enter into an undertaking not to sell the Jewel as well as providing the name of the supplier of the Jewel, based in the Far East. Metal Beds also agreed to provide a sworn affidavit that they had no stock and had made no sales of the Jewel as well as pay Bentley’s legal costs associated with the matter.

ACID Accredited lawyer Andrew Lee of McDaniel & Co commented, “This demonstrates the effectiveness of official design registrations and sending a timely cease and desist letter. By registering their designs, Bentley increases the scope and duration of their protection as opposed to any unregistered rights. In addition, by instructing a cease and desist letter to be sent as soon as they were aware of the potential infringement, Bentley have ensured no Jewel beds are sold in the UK and can pursue the Far East supplier.”

Bentley regularly obtains formal design registrations, through either the UK intellectual property office or OHIM, for the furniture that they sell. This allows them to monopolise that particular design against copyists and non-copyists and extend that protection for up to 25 years. This is a cost effective method of ensuring their products are protected and infringements can be pursued more effectively such as their “Krystal bed” for which they have a UK Registered Design.

Ray Davies, Bentley’s Design Director said, “Following an ACID Intellectual Property Audit we now have a robust IP strategy. After all, Bentley spends an enormous amount on design, research and development of new products and we will continue to take action with any third parties who infringe our rights.” Dids Macdonald, ACID’s CEO said, “The positive benefits of having a registered Community design are possession of a numbered certificate which, in effect, says you own the monopoly on that design. It is much easier for companies to take legal action if they have compelling evidence of design ownership.”

Prime Minister David Cameron used a keynote speech to the business community in Shoreditch to announce a review of the UK’s intellectual property framework. “We are reviewing our IP laws, to see if we can make them fit for the internet age. I want to encourage the sort of creative innovation that exists in America.” The review, which will report next April, will recommend changes to UK law, as well as long-term goals to be pursued by the British government on the international stage.

Dids Macdonald, ACID’s CEO said, “The IP review is a welcome initiative which I hope will focus on a relevant and robust framework to encourage IP creators and ensure that protection and enforcement are key priorities. For the majority of the UK’s SME’s the costs and difficulties associated with enforcing IP infringement are prohibitive. Bringing IP to the top table as a significant contributor to the UK’s growth and recovery will be a welcome boost for UK businesses”.

IP Minister Baroness Wilcox, said, “The future of the economy lies in the highly skilled, technology sectors. For many of those companies their intellectual property is their most valuable asset. We must ensure the intellectual property system helps not hinders those companies. This review will look at what changes can be made to our intellectual property system to ensure it helps firms grow. The internet has fundamentally changed the business landscape. Some sectors, such as the creative industries, have been transformed by the internet. The intellectual property framework must keep pace. An IP system created in the era of paper and pen may not fit the age of broadband and satellites. We must ensure it meets the needs of the digital age.

The review will look at:

• Barriers to new internet-based business models, including the costs of obtaining permissions from existing rights-holders
• The cost and complexity of enforcing intellectual property rights within the UK and internationally
• The interaction between IP and Competition frameworks
• The cost and complexity to SMEs of accessing services to help them protect and exploit their IP
• What the UK can learn from the US’ “fair use” rules covering the circumstances in which copyright material may be used without the rights-holder’s express permission
• Making recommendations on the changes the UK can make as well as the long-term goals to be pursued through the international IP framework. It is expected to report in April next year

Following ACID’s  (Anti Copying in Design)  petition to introduce criminal sanctions for design right infringement The Government  has responded by saying the current civil-based provisions provide a suitable IPR framework  despite the fact that copyright infringement (which requires no substantive examination) attracts criminal sanctions.  This gives rise to anomalies and inequality of treatment which are very damaging to hundreds of small businesses and designers across the UK and restricts the level of legal protection and support they can expect to receive.

Class 99, the website for design law, in Europe and worldwide and written by a team of design experts and fans has commented on ACID’s press release:

On Friday Class 99 reported on the UK government’s unenthusiastic response to the proposal, backed by ACID’s petition, to introduce criminal sanctions for design right infringement.  According to the government, the current civil-based provisions provide a suitable IPR framework — even though copyright infringement (which requires no substantive examination) attracts criminal sanctions. As ACID points out, this gives rise to anomalies and inequality of treatment which, the organisation states, “are very damaging to hundreds of small businesses and designers across the UK and restrict the level of legal protection and support they can expect to receive”.  A press release in response to the government’s reiteration of its current position reads as follows:

“Dids Macdonald [ACID CEO], commenting on the Governments’ response and, in particular, the statement that unlike trade mark and copyright disputes, design right can often be inadvertent said, “In my 20 years personal experience as a designer and latterly as CEO of a 1,000+ member organisation (the majority of whom have joined because of design infringement threats), copying is generally deliberate and blatant rather than inadvertent [If it were not, one might expect commercially unsuccessful and unpopular designs to be copied as frequently as successful ones]. I would be interested to learn more about the Government’s evidence to support their statement [the UK government has committed itself to "evidence-based" IP policy formulation -- though one suspects that this only applies to proposals to change the law, not proposals to leave it as it is ...]. However, I am encouraged to continue the debate via the recently announced review of the UK’s IP and by the Government’s commitment to explore any (and all) suggestions for improving the designs framework for the benefit of the UK design industry.”

Nick Kounoupias, ACID LOBBY’s legal counsel and an expert in IP infringement said, “We are only suggesting that design rights should be criminalised where there is actual knowledge like copyright. There is no obvious reason for the disparity of protection. This may have been overlooked during the frenzied last minute lobbying and amendments made to the [Copyright Patents and Designs Act] CDPA in 1988 as it was passing through Parliament. Design right protection was a relatively late innovation in 1988 and at the time it was probably felt that it was a step too far to extend to design right the new improved protection introduced for copyright in 1988. Certainly no rational basis for the inequality has been advanced by Government.” [Nor has it been suggested that, since deliberate design infringement is not criminal; corresponding types of copyright infringement should be decriminalised too]

The simple legal solution would be to introduce into the CDPA two new Sections to mirror S.107(1) and 110 … The wording would be almost identical to Sections 107(1) and 110 and would be designed to criminalise the infringement of the design right subsisting in 3D designs. This can be done very simply by replacing the word “copyright” every time it appears in Sections 107(1) and 110 with the words “design right” and the words “copyright work” with the word “design.” It would then be necessary to make consequential amendments to mirror Sections 107 (4), 107 (5) 107A, 108 and 109 CDPA. As with copyright infringement this would criminalise blatant and deliberate copying but not copying inadvertently.

The Alliance Against IP Theft representing 20 organisations (of which ACID is a member) has recognised the need to ensure legal parity across IP rights as a key campaigning principle with a need to address the inconsistency in protection for design rights agreed as a specific objective. …

In 2008 there were only 2,798 designs registered in the UK and in 2009 2,111. Most of the UK’s 250,000 designers would appear to rely on unregistered rights. This is contrary to the Government statement that IP, including design rights, should serve to stimulate an environment in which new design ideas can flourish, whilst also providing a robust means of protection for existing design rights. ACID receives approximately 30,000 designs per year to its Design Data Bank for unregistered designs”.

The government’s reluctance to remove the anomaly may have, at base, a fear that if deliberate trade mark, copyright and design infringements were all criminalised, the controversial proposal to criminalise patent infringement might again be raised.

After a 4 year battle Baker Street Clothing has won trademark battle in the quest to register the word “alligator” despite a hard fought battle by leading international clothing brand Lacoste. QC Geoffrey Hobbs decided that the word “alligator” written on their designs would not be confused with Lacoste’s well known crocodile graphic logo.

View the full story from the Independent here

Private and business use of technology seems to be becoming increasingly blurred. Gone are the days when all employees are office-based and work from computers belonging to the business. Many businesses now allow or indeed encourage employees to work from home occasionally or as a matter of course. The use of private mobile devices at work is also on the increase. How can the employer remain in control of the employee’s activities?

Our technology group has seen an increase in enquiries from businesses seeking to deal with the new challenges arising from misuse of technology by their employees. Concerns may arise from the amount of time (read the business’ money) employees are wasting on Facebook, or Twitter, and also from the content of postings by employees and how that reflects on the business.  Technology may also be misused by a disgruntled employee in a far more calculated way to harm the business – by deliberately berating the business in a public forum (perhaps anonymously) or by downloading a database onto a memory stick to set up in competition, for instance.

Whilst you cannot prevent all forms of harm, there is actually a lot that businesses can do to minimise the misuse of IT by the employees. These are just a few thoughts:

1.    Do you know who is using business equipment and who is using personal equipment to carry out their duties?
2.    Do you have an adequate monitoring policy in place which allows the business to monitor email communications?
3.    Do you have a social networking policy? Some businesses prefer for instance to only allow employees to access Facebook for an hour at lunchtime.
4.    What is the business’ culture in relation to the use of private mobile devices at work?  Good old-fashioned floor-walking by line managers with appropriate and clear penalties for misuse can go a long way towards encouraging appropriate behaviour at work.
5.    Are misusers of IT disciplined – are the right messages being sent out?
6.    Are employees subject to adequate and appropriate restrictive covenants in their contracts of employment?
7.    Is access to confidential information appropriately restricted and password-protected?

Prevention is always better than the cure, but occasionally a crisis arises and has to be dealt with. For instance, a disgruntled employee blogs anonymously about the business, perhaps revealing confidential business information.  This activity can cause real commercial and reputational damage. Steps can be taken to bring it to a halt, and to seek redress. Generally speaking, in a crisis situation where real harm has been done or is suspected businesses should:

1.    Escalate the problem immediately to the highest level and confine discussion of the issue only to those who “need to know” – usually the senior management team.
2.    Not attempt to secure electronic evidence without first taking advice in case it is inadvertently damaged, potentially rendering it useless for the purposes of any subsequent criminal or civil case.
3.    Protect customer/supplier relations – if an employee has done something to damage the business and third parties could be affected, the business must invest at a high level immediately in restoring the confidence of those third parties.
4.    Take legal advice immediately so that the situation can be assessed at an early stage and an appropriate legal and commercial strategy implemented.

Should you require any more information about our extensive experience in this area please contact Partner Sarah Birkbeck via sarah.birkbeck@dmhstallard.com or on 01293 605078.

For more information please visit the DMH Stallard website

Are you Protecting this Enough?

One of the many challenges and responsibilities facing companies in a customer facing business is that we receive personal data of the people we are selling to, much of which can be highly confidential.  The law protecting those who entrust us with this information is g overned by the Data Protection Act.  How often do we hear that we cannot be given information because of the Data Protection Act?  A recent example demonstrates the importance that businesses should place on ensuring that people’s personal data is protected. The consequences of not protecting the personal data of others are clearly wide reaching.

ACS Law are a firm of Solicitors who were involved in acting for companies looking at, amongst other things, illegal file sharing.  They had Court Orders in place that forced internet service providers to give them personal details of people who were alleged to have downloaded material illegally.  This has caused ACS to incur the wrath of 4chan, an organisation of internet users who believe in free file sharing.  They attacked the ACS website bringing it down in what is known as a “denial of service attack”.

Unfortunately for ACS Law when the site was recovered from backup, tapes, personal data of those people who were involved in the illegal file sharing were somehow uploaded onto the site.  This was manna from heaven for 4chan who then distributed those details around the internet.  As a result ACS Law face an investigation, not only by the Solicitor’s Regulation Authority (SRA) – their own regulatory body – but also an investigation from the Information Commissioner and a fine of up to £500,000.  In addition, any of the people whose details have been posted on the internet can bring a claim against ACS Law for damages.

In short, it is not enough to say that you comply with the Data Protection Act; you must ensure positively that you are protecting the personal data of others who entrust you with this information.

For more information contact Niall Head-Rapson at McDaniel & Co

Email: nhr@mcdanielslaw.com or visit the McDaniel & Co website
Tel: 0191 212 5594

A Letter Before Action (LBA) or Cease and Desist

What are they?

A Letter Before Action (LBA), sometimes known as a “Cease and Desist”,  is quite simply a letter drafted by a qualified solicitor informing a prospective defendant that unless they settle, you intend to start legal action. In the case of intellectual property (IP) rights infringement an LBA usually sets out why you believe your rights have been infringed together with evidence of your rights ownership.

How effective are they?

Out of ACID’s 400+ settlements by its accredited lawyers on behalf of members, only 4 have reached a final Court hearing and of those, many have settled satisfactorily following an effective LBA and/or a short series of legal correspondence. To the recipient it can be perceived as an official “shot across the bows” or “last chance” before more serious letters follow, which may lead to the claim being heard in Court.

Why does the cost sometimes vary and may seem high?

Generally, the rationale for a letter before action varying in costs is that, basically, some are simple and straight forward and some are much more complicated. In ACID’s experience of many legal actions, the more effective an LBA is, the better the chances are for the least amount of protracted legal response.

Another good reason for an effective LBA (which takes time to prepare) is that there should be little scope for a lawyer on the other side to challenge any points of ownership. There are also many other variables which affect the time spent i.e. gathering comprehensive information (and evidence of rights ownership) in order to prepare an effective LBA. This can be easy or complicated, often depending on the efficiency of the ACID member in giving him/her all the relevant facts and evidence of design ownership and clarity of title. As we know too,  IP law is not straight forward and it may be necessary to look through case studies and precedents to clarify the legal position. It may also be necessary to seek a second legal opinion. Why? Because compared to other rights, there is little case history under unregistered and registered design right. This all takes time.

The amount of time taken to prepare an LBA can also vary if. For example,  a lawyer has to follow up an ACID member for more information which is not forthcoming. Most lawyers charge in 6 minute slots so it is important to ensure that your lawyer has all the relevant facts so that he/she can form a legal opinion! Typically, it is not unreasonable for a lawyer to spend anything from 2 – 5/6 hours on an LBA depending on the complexity of the issue.  Another variable may be the time it takes establishing clarity of rights’ ownership – say in a license arrangement or collaborative design etc.

Watchpoints

If you discover a copy always  be prepared and save expensive legal time by having all the following in place ( the ACID Infringement Purchase Information Sheet is a fast track checklist to ensure that you have collected all the relevant information together):

1.    Archived drawings and documents ready to prove the history of your designs

2.    If you are at an exhibition always ensure that you have evidence of your design ownership with you or have easy access to this evidence

3.    A complete set of legal documents, including contracts of employment with designers, written agreements with freelance designers, suppliers, manufacturers and customers, confirming that you own all the rights in your designs

4.    If your designs or trade marks are registered at the UK Intellectual Property Office or at OHIM (The Office for Harmonization in the Internal Market), retain and archive all these valuable certificates

Many designers do not realise that intellectual property (IP) law is based on property law. When  buying a house, most people will spend several hundred pounds on employing a solicitor to check that the house is free from any unforeseen nightmares such as the seller not actually being the original owner of the property; there is a sitting tenant; there is a public footpath running through the garden; or the land has be designated for nuclear waste. It is the same in IP law, so:

If there are any documents, which are required to PROVE the ownership of your designs, these will need to be drafted and signed before an action can commence. This is when it can be costly, however, never forget that it is never wasted money, it will cover you for the future.

When lawyers ask you to PROVE YOUR CASE you are being asked to ‘prove your case’ to the Court and the other side – it is your lawyer’s job to make sure that the rights are in place at the start so that the strength of your case is not damaged.

Joanna Potbury from DHM Stallard stresses the importance of getting the letter of claim spot on in terms of setting out the claim accurately; not leaving and gaps, and also setting the right tone.  “A good letter of claim can set the scene for much of the pre-action stage and can put you in control of the debate from the off.  If there are any weaknesses or gaps, they will be exploited by the opponent, which inevitably gives the potential defendant a psychological boost, it is our job as effective lawyers to get this right.”