Unregistered design rights in gilet found to be infringed

DKH Retail Ltd v H Young (Operations) Ltd ([2014] EWHC 4034 (IPEC)), a case heard by His Honour Judge Hacon in the Intellectual Property Enterprise Court, concerned the alleged infringement of UK unregistered design rights and unregistered Community design rights in two overlapping parts of a gilet.

DKH Retail Limited alleged that H Young (Operations) Limited had imported into the United Kingdom and offered for sale in the country a gilet called 'Glaisdale' which infringed DKH's unregistered design rights in:

1. the front portion and hood of its 'Academy' gilet sold under its SUPERDRY trademark; and
2. the hood alone.

DKH relied on the same parts of the 'Academy' gilet in respect of both the UK unregistered design rights and unregistered Community design rights.

H Young challenged the subsistence of UK unregistered design rights in the designs on a number of grounds, including that:

• the designs were not original;
• UK unregistered design rights could not subsist due to the "must fit" exception; and
• the designs were commonplace.

Each of these challenges was rejected.

Section 213(4) of the Copyright Designs and Patents Act 1988 (CDPA) provides that "a design is not 'original' if it is commonplace in the design field in question at the time of its creation" (this section has been amended by the Intellectual Property Act 2014 so that the design must be commonplace in a qualifying country within the meaning of Section 217(3) of the CDPA; however this applies only to designs created after October 1 2014). Hacon J reviewed the case law concerning whether a design was “commonplace”, including the factors set out by Mummery LJ in Farmers Build Ltd v Carier Bulk Materials Handling Ltd ([1999] RPC 13). Hacon J found that the relevant design field was outerwear and casual clothing.

H Young relied on two pieces of prior art to argue that the designs were commonplace. The first piece of prior art, which was subject to limited sales in the United States, was considered too obscure by the judge to be taken into account. As regards the second piece of prior art, the judge was not satisfied on the evidence provided that its features would be part of the design corpus. The judge reached the conclusion that neither design was commonplace.

DKH claimed secondary infringement of its UK unregistered design rights under Section 227 of the CDPA. As H Young admitted the importation and sale of the alleged infringing articles, the issues for the judge were whether the relevant parts of H Young’s gilets infringed DKH’s UK unregistered design right and whether H Young knew or had reason to believe this was the case. The judge referred to Lewison J’s summary of the assessment of whether an article infringes under Section 226 of the CPDA in Virgin Atlantic Airways Ltd v Premium Aircraft Interior Group Ltd ([2009] EWHC 26 (Pat)). Hacon J compared the relevant features of the two gilets and concluded that, owing to the visual significance of the similarities, the relevant parts of the 'Glaisdale' gilet were made substantially to DKH’s designs.

DKH submitted in its particulars of claim that it was well known in the trade that garments may be protected by unregistered design rights. This submission was not addressed in evidence, however. The judge stated that, although he would not be surprised were this the case, the lack of evidence meant knowledge could only be imputed following a reasonable period from receipt of DKH’s letter before action.

H Young also challenged DKH’s ownership of any unregistered Community design rights in the designs, as DKH’s ownership in part depended on a clause in the designer’s employment contract purporting to assign future design rights. H Young argued that Article 27 of the Community Designs Regulation (6/2002), which provides that matters of Community designs as property are to be dealt with under national law, does not provide for assignment of future rights. The judge disagreed. He found that Article 27 delegates all matters of unregistered Community design rights as property to national law. Sections 223(1) and (2) of the CDPA allow for the future assignment of UK unregistered design rights, and thus the future assignment of unregistered Community design rights was effective.

Corresponding challenges to the subsistence of unregistered Community design rights were raised by H Young as in respect of UK unregistered design rights, each of which was rejected. On infringement, the judge had to consider whether, per Article 10 of the Community Designs Regulation, the relevant parts of the 'Glaisdale' gilet produced a different overall impression on the informed user. The judge cited the approach set out in Magmatic Ltd v PMS International Ltd ([2014] EWCA 181). On a comparison of the gilets, the judge held that they shared all of the features over which DKH claimed unregistered Community design rights. A different overall impression would not be created.

Having found that DKH’s UK unregistered design rights and unregistered Community design rights were infringed by the 'Glaisdale' gilet, the question for the judge was whether DKH should be entitled to additional damages pursuant to Article 13 of the IP Rights Enforcement Directive (2004/48/EC) and/or additional damages pursuant to Section 229(3) of the CDPA. Article 13 provides for additional damages where the infringer “knowingly, or with reasonable grounds to know”, committed the infringing acts. Section 229(3) allows the court to award additional damages based on the flagrancy of the breach.

The judge held that Section 229(3) must be interpreted in accordance with Article 13. He noted that Article 13 damages would potentially apply in any case of secondary infringement, due to the requirement of knowledge. It did not follow however that additional damages should automatically be awarded. Since knowledge was only established on receipt of DKH’s letter, the judge did not consider that it was appropriate to award additional damages under Article 13.

As both UK unregistered design rights and unregistered Community design rights were claimed by DKH in the same designs, this decision provides a useful comparison of the different approaches the court is required to take under each regime, on the same evidence.

Although it was found to have no impact on the case, Hacon J made some interesting comments in respect of the impact of the recent removal of the words "any aspect of" from the definition of 'design' in Section 213(2) of the CDPA by Section 1(1) of the Intellectual Property Act. The explanatory notes to the amendment state its purpose as limiting protection for trivial features of designs. The judge did not consider that the purpose or effect of the amendment was to align the definition of 'design' under UK unregistered design rights with that under unregistered Community design rights in Article 3 of the Community Designs Regulation. However, he submitted that the impact of the amendment was that claims to designs except those specifically embodied in the claimant's article are now excluded. It will be interesting to see the impact of this amendment on future cases.

Leigh Smith, Clifford Chance LLP, London