For this post, we wanted to provide a more in-depth view on a recent IP case which hit the news and caused quite a few discussions amongst our team. We are grateful to Alexander Carter-Silk and Claire Blewett from law firm Brown Rudnick for their contribution and commentary, and hope you enjoy the read!
Background
Trunki (ride-on suitcases for children) first came to widespread attention in the UK in 2006, when its creator, Rob Law, appeared on the TV programme Dragon’s Den seeking investment. The appearance on the show was something of a failure. One of the dragons (wealthy would-be investors) Theo Paphitas pulled the product’s strap clean off its case. A bemused and disappointed Mr. Law left the Den with no investment. Whilst Mr. Paphitas successfully demonstrated his impressive strength in the episode, his business acumen, and indeed that of the other dragons, was less manifest, as the product turned out to be a roaring success.
Unfortunately for Magmatic, one of the inevitable corollaries of a successful product is its imitation by others, free-riding the wave of its popularity. PMS’ Kiddee Case was apparently just one of a multitude of products that emulated Magmatic’s Trunki product. According to Magmatic, the company successfully removed 3,000 listings for identical infringing products in 2015 and reports that the company now spends more money fighting copies than it does on research and development.
On the 11th July 2013, the Honourable Mr. Justice Arnold decided that the Trunki Community Registered Design (“CRD” – see Glossary page for definition) had been infringed by a competitor product produced by the defendant PMS. The court of Appeal reversed this decision and found in favour of PMS in a judgment that has been upheld by the Supreme Court. Why did the Court of Appeal and the Supreme Court decide that this apparent free-riding (the puns just keep on coming) on the Trunki design was not infringing? What are the possible ramifications for design rights, and how does the case impact on IP insurance in relation to UK and European design rights?
According to the Court of Appeal, the first court’s decision to consider the shape alone when making the comparison was mistaken; it is largely this difference that underpins the disparity in the courts’ decisions. Lord Justice Kitchen in the Court of Appeal held that the CRD pictures were not straightforward drawings but three dimensional images that showed the effect of light upon the surfaces. Furthermore, he said, they showed a distinct contrast in colour between the wheels and the rest of the case. Consequently, the proper comparison should not be based solely on the shape but on the overall impression provided by the design as registered.
The Court of Appeal found that the overall impression given by the design was that of a wheeled suitcase in the shape of a horned animal, with a strap, strips, wheels and spokes whose colour contrasted with that of the rest of the product, and was quite distinct from the insect type case developed by PSD. The judgment was largely informed by the fact that, unlike the previous High Court Judge, they had chosen to take into account the decoration on the accused design as it “significantly affects how the shape itself strikes the eye”.
Learnings
In light of recent court cases it is perhaps not unreasonable to ask whether, if Community Registered Design Rights are so difficult to draft, there is any point in applying for them in the first place?
Registered design is a monopoly right which requires no evidence of copying. It is used every day to prevent plagiarism. One never hears of the cases where the alleged infringement is simply withdrawn. However sorry one feels for Magmatic and its founder, the failure in this case arose because the design as registered did not cover the scope of the real heuristic and emotional hook that made the design successful.
The cost of registering a design is minimal when compared to the cost of registering a patent, costing in the hundreds of pounds rather than the thousands or tens of thousands; discounts are available when applying for design rights in bulk. Even if the rights may later prove difficult to enforce, they still provide a potent deterrence which justifies their nominal cost. The broader the protection sought, the greater the prospect of effective enforcement and the greater the deterrence against third parties launching products that free-ride on the registered design.
The Insurance Perspective
IP insurers see more business from relative high-tech sectors where patents tend to be the major exposure. This is, however, beginning to change, and cases like Trunki demonstrate the IP risks faced by design businesses. CFC is seeing a growth in business from companies that are either designing their own products or selling design services to others. Whilst a design registration requires considerable thought and care, the rights gained can provide protection throughout the EU for all products to which the designs are applied, including graphic works, two and three dimensional designs.
The ability to offer pursuit coverage for design will depend on the quality of the design registrations, particularly in the consumer product space. Most IP insurers make their pursuit cover conditional upon the client having a reasonable prospect of success, which will be most likely if the insured’s registered designs have well drafted specifications. There will always be difficult cases, like Trunki, which will reach the higher courts, but most are resolved before proceedings are issued or before the lower courts.
A greater understanding amongst designers as to the available rights and their scope would benefit them and their insurers alike.
