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LIFT VERKAUFSGERATE GmbH v. FISCHER PLASTICS PTY LIMITED
No. NG247 of 1991
FED No. 566
Number of pages - 16
Intellectual Property
(1993) AIPC 91-015
(1993) 27 IPR 187
COURT
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
Hill J(1)
CWDS
Intellectual Property - designs - infringement - obvious imitation - whether
the essential features of the applicant's designs repeated in the respondent's
products; fraudulent imitation - whether respondent knew that the applicant
had registered designs or applied for registration - whether knowledge of some
intellectual property right sufficient to found case of fraudulent imitation -
whether differences made merely to improve the product or whether made to hide
the fact of copying.
Words and Phrases - "fraudulent or obvious imitation".
Designs Act 1906: s.30.
Malleys Limited v. JW Tomlin Pty Ltd (1961-62) 35 ALJR 352; applied.
Dart Industries Inc v. The Decor Corporation Pty Ltd (1989) AIPC 90-569;
applied.
Turbo Tek Enterprises Inc v. Sperling Enterprises Pty Ltd (1989) 23 FCR 331;
applied.
Elconnex Pty Ltd v. Gerard Industries Pty Ltd (1991) 32 FCR 491; discussed.
HRNG
SYDNEY, 12, 14 and 15 July 1993
#DATE 19:8:1993
Counsel and Solicitors for the Applicant: D K Catterns instructed by
Freehill, Hollingdale and Page
Counsel and Solicitors for the Respondent: R Webb instructed by Minter
Ellison Morris Fletcher
ORDER
THE COURT ORDERS THAT:
1. Applicant's application stood over to a date to be
fixed with counsel when argument will be heard as to
costs.
2. Applicant on that day to bring in short minutes of
order.
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal
Court Rules.
JUDGE1
HILL J Lift Verkaufsgerate GmbH, the applicant, applies to the Court for an
injunction restraining Fischer Plastics Pty Limited, the respondent, inter
alia, from manufacturing or selling certain compact disk holders and audio
cassette holders, said to constitute infringements of Australian Registered
Design Numbers 103296 and 103297, the property of the applicant. The
respondent denies infringing the applicant's monopoly in the registered
designs and in its defence and cross-claim asserts that each of the designs is
invalid and should be cancelled because neither was new or original having
regard to the prior designs published in Australia before the relevant
priority date, in each case 17 June 1988.
2. The respondent's case on invalidity, as disclosed in affidavit evidence,
was that Mr Fischer had travelled to Germany to attend a school reunion in
September 1987 returning to Australia in October 1987 and that he had brought
back with him, to Australia, an audio cassette holder manufactured by the
applicant in accordance with registered design 103296 ("the audio cassette
design"), so that that design had been known in Australia prior to the
relevant priority date. Other evidence as filed, including an affidavit of Mr
Schaede who was, as will be seen, an important witness for the applicant,
appeared to corroborate this.
3. A copy of the product which Mr Fischer alleged he had purchased on this
visit became an exhibit in the proceedings. That product used aluminium rods
as connectors to join the two plastic sides of the product. The respondent
adduced a body of affidavit evidence which made it clear that it first
undertook the manufacture in Australia of an audio cassette holder embodying
the registered design with aluminium rods, such as that exhibited by Mr
Fischer, in the middle of March 1988, that is to say substantially later than
the time asserted by Mr Fischer. On this basis the product would not have
been available for sale until the end of March or April 1988. Ultimately
counsel for the respondent conceded the validity of the two designs accepting
that products embodying the designs were not available in Australia at the
relevant priority date and, by implication, that both Mr Fischer and Mr
Schaede were mistaken as to their recollections of the date when the product
was brought by Mr Fischer to Australia.
4. There were, accordingly, only two issues which arose for determination in
the case, both relevant to the issue of infringement. The first, stated in
terms of the statutory test in s.30 of the Designs Act 1906 ("the Act") was
whether the respondent had applied the designs, or an obvious imitation of
them, to its products being an audio cassette and compact disk holder and
secondly whether the respondent had applied a fraudulent imitation of the
designs to those products.
5. Each of the registered designs was registered in respect of what, in the
registration, is described as "a retainer". The first, ARD 103296, related,
in its commercial operation, to a holder for audio cassettes. It was
illustrated by the following representations:
(DESIGNS OMITTED)
6. The second design, ARD 103297, which in a commercial application related
to a compact disk holder, was illustrated by the following representations:
(DESIGNS OMITTED)
7. Expert evidence was called by each of the parties. In the case of the
applicant that evidence was from a Mr Redmond, the foundation head of the
Department of Industrial Design at the University of New South Wales. In the
case of the respondent that evidence was called from a Mr Bayly, currently the
managing director of Bayly Design Associates of Victoria. Both are eminently
well qualified in the field of industrial design. Their evidence is
admissible and instructive but ultimately not determinative. Indeed in the
case of a design as simple as the designs in question in the present case,
their evidence (couched as it is in language difficult for a layman to
comprehend), on the issue whether the respondent's products were an
"imitation" of the applicant's designs, may well serve to distract me from the
primary question. I prefer to describe the design and the respondent's
products in somewhat simpler terms. In doing so I have regard, as the parties
agree I may, to the applicants products which indeed embody the designs,
although disregarding manifestations of colour, texture and surface
treatments. It is not suggested that the applicant's products in any way
depart from the designs as registered.
8. The audio cassette holder design depicts a holder which would contain 13
audio cassettes. Its size is determined by this capacity. There are two
sides which are joined together by rods, which may conveniently be described
as connectors. These connectors are, in the manifestation of the design
represented by the commercial product, of a length determined by the width of
an audio cassette. Along the inside of each of the side pieces are a series
of semi-circular sockets. At the top of each socket is to be found a flat lip
area, which may be described as "a tooth". The function of the semi-circular
sockets with the teeth at top is to permit the cassette to be moved or
"flipped" forwards or backwards so that either it or the next succeeding
cassette will be visible. On the underneath where each of the rods connect
the two sides there is a small foot so that the stand will be slightly raised
from the surface on which it lies.
9. The respondent's product is of virtually identical dimensions to those of
the applicant. Given the function of the two products to contain audio
cassettes, this is not surprising. There are, however, as the expert
witnesses point out, a number of differences between the two products. Two
may be mentioned here. The first is that there is a marginal difference in
the semi-circular shapes but that difference is probably only remarkable
because in the Fischer product the semi-circular sockets are closer to the top
of the sides than are the corresponding sockets in both the applicant's
product and design. The second, but by far the more substantial difference
between the two, is to be found in the connectors joining the two sides. In
the Fischer product, the connectors are not simple cylindrical rods as shown
in the design, but rather two solid moulded plastic connectors of
approximately 3 centimetres in width, each reminiscent of two rods with an
indentation in the middle with a large rectangular protrusion at the base to
act as a stand to elevate the holder from the surface on which it lies.
10. The expert witness for the respondent pointed in his evidence to the
following differences between the Fischer product and the registered designs.
1. The vertical positioning of the part-cylindrical sockets within
the inner surface of each side member on the Fischer product is
central thereby providing equal clearance above and below. By way
of contrast, each of the registered designs depict the
part-cylindrical sockets as being positioned with their lower edge
aligned with the bottom edge of the side members thereby providing
clearance above the sockets but not below.
2. The outer edges of the side walls are smoothly radiused at the
junction of the inwardly depending flanges on the product whereas
in each of the registered designs there is, so it was said,
depicted a definite chamfer on the perspective view.
3. The interconnection of the side members on the Fischer product is
formed with two substantial rectangular components each having a
proportion of width being approximately equal to three-quarters
their length whereas the designs depict the interconnecting
cross-members as being slender cylindrical rods.
4. The twin lug form of connection of the interconnecting member and
its alignment position on the side member of the Fischer product
is quite different to that depicted in the illustrations of the
registered design. This difference is basically as a result of
the slender cylindrical form of the interconnecting members
illustrated in the registered designs which have only one
connecting point at each end, whereas the relatively wide form of
the interconnecting member on the Fischer product provides an end
wall being able to support twin locating lugs which are located
within twin tubular sockets on the side members.
5. The size, configuration and positioning of the four small rib-like
feet on the base of the product are considerably different to the
four solid projecting pads depicted in the illustrations of the
registered designs.
11. When asked to summarise the differences between the Fischer products on
the one hand and the designs on the other, the expert for the applicants
said:
"I think the difference comes down to the
connector. There is a significant difference in
the design, but I believe it is a discrete and
identifiable difference. You can separate it
off quite distinctly and say, yes, this is the
same design overall, it has the same appeal to
the eye but it has a different connector."
12. The parties were in agreement that the general test for infringement is
that stated by the Full High Court in Malleys Limited v JW Tomlin Pty Limited
(1961-2) 35 ALJR 352 at 354 where their Honours said:
"An infringement of copyright in a registered
design occurs when another person, without the
licence or authority of the owner, 'applies the
design or any fraudulent or obvious imitation of
it to any article in respect of which the design
is registered' (s.30(a))."
13. Their Honours, after speaking of the facts before the Court, continued
(on the same page):
"Turning to s.30 it is apparent that there is
infringement in any one of three cases - that
is, where the design which has been applied is:-
(i) the registered design
(ii) an obvious imitation of the
registered design (ie not the same
but a copy apparent to the eye
notwithstanding slight differences)
and
(iii) a fraudulent imitation (ie a copy
with differences which are both
apparent and not so slight as to be
insubstantial but which have been
made merely to disguise the
copying). Visual comparison will
establish (i) or (ii) but a finding
of fraudulent imitation must require
something more because in such a
case visual comparison is not of
itself sufficient to establish
imitation; otherwise it would be an
obvious imitation."
14. Thus the issue for me is one essentially of visual comparison in order to
determine whether the compact disk holders and audio cassette holders of the
respondent are of substantially the same shape as those represented by the
registered designs, accepting that there may be differences provided those
differences may be said to be only slight differences.
15. In making the visual observation I must bear in mind that the Act is
concerned not with ideas or inventions but with design. So, as the High Court
in Malleys said (at 352-3):
"It is, of course, true that every shape is not
a design; there must be 'sufficient
individuality of appearance' to distinguish it
from what Russel-Clarke in Ch 2 of his book
'Copyright in Industrial Designs' (1930) aptly
describes as 'the fundamental form' of an
article. Furthermore, the existence of that
sort of individuality is to be determined by the
eye and not by measuring dimensions. It follows
that a design need not have the precision of a
working drawing; it concerns the shape or
configuration of an article, as it appears to
the eye. If a design applied by another has the
features that are characteristic of the
registered design and are so arranged that to
the eye the resulting shape is substantially the
same, there is infringement, whereas if the same
features are arranged so that to the eye the
resulting shape is different, there is, in the
absence of fraudulent imitation, no
infringement. In deciding one way or the other
the proportions of common features may be of the
utmost importance, but acceptance of this does
not involve deciding that to be registrable the
representation of the design must be represented
so that its proportions can be accurately
calculated; it is sufficient if it shows a shape
with enough individuality of appearance to
distinguish it and to enable it to be determined
by visual comparison whether the shape of an
article is either the same as, or nothing more
than an imitation of, that disclosed by the
registered design."
16. In Dart Industries Inc v The Decor Corporation Pty Limited (1989) AIPC
90-569, Lockhart J usefully summarised, in a judgment with which Jenkinson and
Gummow JJ agreed, the authorities relevant to the question of infringement by
obvious imitation. As distilled by Gummow J in Wanem Pty Limited v John
Tekiela (1990) 19 IPR 435 at 440, these principles:
"Establish that:
(i) first impressions are important in
determining whether there is an
infringement of a design,
(ii) an obvious imitation is one which is
not the same as the registered
design but is a copy apparent to the
eye notwithstanding slight
differences,
(iii) the question must be looked at as
one of substance and by examining
the essential features of the
design,
(iv) a closer correspondence between the
registered design and the alleged
infringing design is necessary to
satisfy the test of obvious
imitation than that of fraudulent
imitation,
(v) precise mathematical comparisons or
matters of measurements or ratios,
which form no part of the mental
picture which the eye conveys to the
brain of shape or configuration
suggested by the design, are not to
be applied as the test of
infringement; appearance to the eye
is the critical issue, and
(vi) questions of infringement must not
be determined by a narrow or overly
technical approach in comparison
between the design and the alleged
infringement, lest the registration
be sapped of its worth to the
registered owner."
17. The parties also accepted the proposition which appears in Russell-Clarke
on Copyright in Industrial Designs, M. Fysh, 5th ed, 1974 at 85, and approved
in numerous authorities including Decor (supra), namely that:
"If only small differences separate the
registered design from what has gone before,
then equally small differences between the
alleged infringement and the registered design
will be held sufficient to avoid infringement."
18. It is clear that the idea of a design which enables a product to be
flipped forward and backwards is not a new one. Counsel for the applicant
tendered in evidence a Swiss patent, patent number 262708, containing diagrams
for a container for slides where the idea of semi-circular divisions with
teeth was employed to enable the slides to be flipped from one side to another
for display purposes. A copy of figures 2 and 3 forming part of that patent
show the following:
19. Likewise the applicant is the proprietor of Australian patent number
576282 in relation to a "device for holding or displaying rigid, flat objects
such as CD, audio or video cassettes" which discloses the basic idea of the
design as may be observed from the following figure 2 as depicted in the
patent.
20. But notwithstanding that some elements of the designs are not novel, it
is apparent that the question for my decision must be determined as one of
substance by examining the essential features of the designs to see whether
those essential features are repeated in the respondent's products. In the
present case the essential features are the side faces, the semi-circular
sockets with the teeth which operate to prevent the article contained in the
holder from moving too far forward or back, the connectors and the feet. Of
these elements two of them, which are clearly related as a matter of
fabrication, differ substantially, namely, the connectors and feet. In my
view the difference in the design caused by the connectors is so great as to
present a quite different visual image from that in the registered designs.
21. This visual difference is sought to be discounted by Mr Richmond who, in
his oral evidence, argued that the differences in the connectors and feet
should be seen as discrete and separable differences like differences of a
bumper bar on the design of a car. With respect that analogy is not a fair
one in the present case. Even if it be right to regard the bumper bar as
discrete and separable from the overall car design, a bumper bar is such an
insignificant part of the overall design of a car that differences in the
bumper bar can perhaps be seen as slight differences in matters of overall
design. But that is not the case here where the difference in the connectors
present clear differences in the appearance of the whole.
22. Accordingly I am of the opinion that the applicants have not made out a
case of infringement by obvious imitation.
23. Before passing to the question of fraudulent imitation I would note the
submission of the respondent that the similarity of overall proportion of the
applicant's and respondent's products is a matter dictated by the function
which those products are intended to serve. The evidence established, for
example, that the width of the products of both the applicant and the
respondent was dictated by the width of the objects, namely, audio cassettes
or compact disks, which were to be contained in them. Likewise the length of
each was determined by the usual dimensions of hi-fi furniture. Similarly the
diameter of the semi-circles, and in particular the opening in each socket,
was determined by the size of the compact disk or audio cassette to be
contained and the flip action which the socket was designed to produce. I
should add that although there are differences in the shaping of the
semi-circular sockets and teeth, those differences, in my mind, would not have
avoided the respondent's product being an obvious imitation of the applicant's
design. The overall impact to the eye of these sockets and teeth is the same,
despite the differences however significant they may seem to an expert
observer.
24. For a case of fraudulent imitation to be made out, the parties are in
agreement that as a minimum it is necessary for the applicant to show that the
respondent has actually made an imitation. Thus in Turbo Tek Enterprises Inc v
Sperling Enterprises Pty Limited (1989) 23 FCR 331 at 348, in a passage cited
by both parties before me, the Full Court of this Court (Sweeney, Fisher and
Sheppard JJ) said:
"... we think that it is correct to say that it
is open to a court to find that an imitation is
fraudulent where the designer or manufacturer of
an article, having reason to believe that
another article is an embodiment of a design
which is actually registered or in respect of
which an application for registration is
pending, imitates or copies the article."
25. It is inherent in the concept of a fraudulent imitation that there will
be an intention to copy but with differences which, at the end of the day, are
"mere disguises to hide the fact of copying". As the High Court put it in
Malleys the differences will be "both apparent and not so slight as to be
insubstantial" in the case of a fraudulent imitation (see at 354).
26. There is an area of dispute between the parties as to whether it is
necessary that the respondent knew that the applicant had either registered a
design or applied for registration of a design before making its own product.
It is certainly clear from Turbo Tek that, at least in some circumstances, it
will not matter that the design has in fact actually been registered. I shall
return to that question later.
27. It was the respondent's case that it knew nothing of the applicant's
registered design or, for that matter, of any application to register.
Rather, it was said, the respondent had purchased in Germany the applicant's
audio cassette holder which embodied the design in question. That had been
brought back to Australia by Mr Fischer who had approached one of the
respondent's employees, a Mr Schaede, a technical director with the
respondent. According to Mr Fischer he instructed Mr Schaede to redesign the
product so as to improve it. The task of redesigning took, so Mr Fischer said,
some 18 months to complete and there were, from time to time, discussions
between Mr Fischer and Mr Schaede "for improvement".
28. Mr Schaede swore that when he saw the product he formed the view that the
concept was good but that it had various design deficiencies. He agreed that
Mr Fischer, either in late 1987 or early 1988, instructed him to work on the
product to redesign it to overcome the deficiencies. He said that there were
two such deficiencies. The first was the aluminium rod which was used to
connect the two side pieces. Mr Schaede said he found the applicant's product
unstable and considered this to be a serious design defect. It was he who
designed the rigid cross bar which appeared as two tubular poles separated by
a depression but which when viewed from the bottom appeared as a rectangular
almost square open box. The second area of design deficiency was, according
to Mr Schaede, the length of what he described as the flat lip area at the top
of each of the sockets and which I have elsewhere referred to as the teeth.
He found that the length of the flat lip areas was too short and lengthened
it. He explained the length of time which the design process had taken (18
months) as arising because he had only time to do design work between other
tasks. He dated the work, he said, as being in late 1987 or early 1988
because at that time he was simultaneously designing a plastic kick-board or
plate for the Ford Capri motor car. He said he had been unable to locate
drawings other than those which he produced. He said that he had designed a
compact disk holder not by reference to any product of the applicant but as an
extension of the audio cassette holder design. He said he did not know if the
applicant made a compact disk holder.
29. It will be recalled that the applicant's affidavit evidence made it clear
that Mr Fischer could not have purchased the applicant's audio cassette holder
at the time he said he did. Although this had been conceded by the
respondent's counsel, Mr Fischer, in his evidence, vigorously maintained the
correctness of his earlier affidavit evidence. He was a most unsatisfactory
witness and hardly ever answered the questions which were put to him,
preferring instead to put forward, as an apparent answer, matters which he
believed assisted his case. It was no doubt this which caused counsel for the
respondent to accept that Mr Fischer was not a witness whose evidence could be
relied upon without corroboration. This was not, so counsel submitted, to say
that Mr Fischer was untruthful in that it was clear that he believed what he
said. However, it was certainly clear that Mr Fischer's firm belief stemmed
from endeavouring to reconstruct events rather than from actual recollection.
30. The first issue for determination involves the question whether, it being
asserted that a search was made on behalf of the respondents of the register
of patents and designs, that search revealed no registration as the
respondents submitted or indeed revealed the applicant's registration as the
applicant submitted must have been the case.
31. The search was carried out by a Mr Bernard who, so the evidence said, was
the respondent's director of marketing and sales. According to both Mr Fischer
and Mr Schaede, Mr Bernard reported that he had made searches and that the
applicant's audio cassette holder was not covered by design or patent
registration. A search of the respondent's files had not located any record
or search note prepared by Mr Bernard who had left the employ of the company
approximately 3 years ago. Mr Fischer's evidence suggested that the parting
with Mr Bernard may not have been wholly amicable. No attempt was made to say
so directly, let alone to elaborate. There was no suggestion that any
attempts had been made to locate Mr Bernard or indeed that he would have been
inaccessible to the respondent had it sought him out.
32. For the applicant evidence was given by a Mr Forster, a patent attorney,
that if a search of the Australian patent register had been conducted in
October 1987, as it was alleged Mr Bernard had, either by reference to the
word "Lift" (with or without the word "Verkaufsgerate") for racks for
audio-cassettes or similar products, that search would have disclosed an
application for registration of Australian letters patent number 576282, to
which reference has already been made. Mr Forster further deposed to the fact
that a searcher making a design search after 17 June 1988, when the
applicant's application for design registration were filed, would have located
the designs.
33. In these circumstances counsel for the applicant submitted that I should
infer that while Mr Bernard made searches, those searches had disclosed both
the patent and the designs (assuming the searches were made in the latter case
after June 1988) and that the failure on the part of the respondent to call Mr
Bernard as a witness allowed such an inference to be more confidently drawn:
Jones v Dunkel (1959) 101 CLR 298. There are, it must be said, two competing
inferences, namely, that Mr Bernard though instructed to do the relevant
searches did not do them or alternatively that Mr Bernard was so incompetent
as to be totally unable to do the searches even with the aid of assistance of
staff at the trade marks and patents office. Of Mr Bernard's competence
little is known save that he was the respondent's director of marketing and
sales.
34. To draw the inference suggested by the applicant however, I must reject
the evidence of Mr Schaede and Mr Fischer that Mr Bernard had in Mr Schaede's
presence told both Mr Fischer and him that the search had been made and that
that there were no patent or design application or registrations for that
product.
35. To resolve this question it is necessary to make findings with respect to
Mr Schaede's credit. Perhaps more significantly it is necessary to do so with
respect to Mr Schaede's evidence that he set out, on instructions from Mr
Fischer, not to copy the applicant's audio cassette holder, making some
alterations to disguise the copy, but rather to improve upon the product.
36. Not surprisingly, having regard to Mr Schaede's affidavit evidence which
placed his involvement in designing a compact disk and audio cassette holder
as encompassing a period of some 18 months from the time Mr Schaede first saw
the applicant's product to the time the respondent began to tool up for its
own product, Mr Schaede was examined about this timing. That his affidavit
evidence took as the starting point Mr Fischer's return from Germany in
October 1987 as the date when Mr Schaede first saw the applicant's product,
makes it clear that in making his affidavit evidence Mr Schaede had conferred
with Mr Fischer. There is nothing sinister about that. Mr Fischer had been
certain (albeit wrongly) of the 1987 date because he had been in Germany at
that time for a school reunion. The next time Mr Fischer had been in Germany
was 1990 and that date clearly would not have been helpful to the respondent's
case.
37. The problem with this evidence, as I have already explained, is that the
product which Mr Fischer claimed to have brought back with him to Australia in
October 1987 had not yet been manufactured and indeed was not manufactured
until March-April 1988. The earliest therefore the product could have got
into Australia was around that time. Mr Fischer was unable to suggest any
explanation as to how it got into Australia after March 1988 and before 1990.
38. Mr Schaede did not give evidence as to when tooling up for the production
of the respondent's products began. If, as he said, the design process began
in late 1987 or early 1988 and took 18 months before tooling up began, tooling
up must have begun at the latest around July 1990. No precise date is given
by Mr Schaede in his affidavit. On the other hand, if the very earliest the
applicant's product could have come into Australia was towards the end of
March or early April 1988, and the same 18 month period was required, then the
tooling up period could not have begun until October 1990. That seems
somewhat inconsistent with Mr Fischer's evidence that Australian distributors
were appointed in 1990 and the Australian market was entered in that year.
The inconsistency becomes the more pronounced the later the date upon which Mr
Schaede was first shown the applicant's audio cassette holder.
39. Related to this issue of timing, Mr Schaede in his affidavit evidence had
deposed that having first seen the applicant's product in or around October
1987 he had commenced design work to improve it some time thereafter. He said
that he had commenced work at the same time as he was working on the design of
a plastic kick-board or plate for the Ford Capri motor car, a part which was
delivered to Ford in July 1988. In cross-examination Mr Schaede said that he
had been able to trace back from drawings which he had retained sketches both
for the audio cassette holder and for the Ford Capri. That evidence, if it
were accepted, made it clear that the design work had been commenced at least
no later than July 1988 and indeed, earlier.
40. Mr Schaede's evidence gave the impression that he had given this drawing
to his solicitor, yet the drawings exhibited by him, and indeed the only
drawings he said he was able to produce, did not include any drawing with a
Ford Capri part on the same piece of paper.
41. There were times in the cross-examination when Mr Schaede's evidence
suggested that the drawings exhibited to his affidavit did in fact include the
Ford Capri part, but when called upon to identify the drawings it was clear
that this was not the case.
42. The final matter upon which Mr Schaede was cross-examined was whether he
had noted any indication of industrial property ownership when he had first
examined the applicant's product given to him by Mr Fischer. He was asked
initially whether he had looked at the product to see whether there was a
number on it indicating a registered design. He answered that there was
definitely not marked upon the article a "registered design or patent or
something on it". His attention was then drawn to the inside of the article
where there appeared the letter 'C' in a circle, the figures "1988" and the
words "by Lift". He was asked whether he had seen this when he had first
looked at the article. His reply was "could have been, yes." He countered,
however, that this was not an indication of a registered design but of a
copyright. It was put to Mr Schaede then that he would have to have seen this
inscription because he had been looking carefully to see whether the item was
a registered design. He replied:
"Yes, it would have been, yes, a registered
design, yes, looked for that too, even if it
does not involve me if it is registered or not,
if somebody searches (for) us and finds it is
registered, then I have to change it anyway. I
can change it and after it's not much hassle
changing it enough to get around the registered design."
43. Pressed upon this answer, Mr Schaede indicated that by it he had meant
that there was little difficulty creating an article which had more or less
the same function as the original. Pressed further that he had changed the
applicant's audio cassette holder sufficiently so it would not look as if he
were copying the applicant's product he said:
"No, no, not that. If I want that then I
wouldn't have changed the whole thing to - if I
wanted to disguise it that much I could have
changed the whole shape and all."
In further elucidation he said:
"Like I said, if I wanted to change the shape it
wouldn't have been any problem changing the
shape. Some shapes are even easier to make than
that one."
44. It is clear that Mr Schaede is far from an unsophisticated person. He
had, as other evidence indicated, a quite reasonable grasp of the significance
of copyright. This was so notwithstanding that at one point his evidence
appeared to be suggesting that copyright existed only in written or spoken
words rather than in other artistic works such as drawings.
45. His reaction to whether he had noted the copyright claim indicated on the
applicant's product somewhat diluted the otherwise confident impression he had
made giving evidence. The difficulty I have in accepting his evidence is that
at every point at which that evidence was tested, objective facts suggested
that it was incorrect. After considerable consideration I have reached the
view that I should not accept Mr Schaede's evidence. This does not mean that
I believe that he was deliberately telling an untruth. Rather I think that
his evidence is a reconstruction, arrived at after considerable collaboration
with Mr Fischer, and that it is not reliable.
46. In these circumstances I would conclude that Mr Schaede did set about, on
the instructions of Mr Fischer, making a product as alike as possible to the
applicant's product save that differences would be made to it to disguise the
similarities of the two products and "to get around the registered design". I
would also conclude that in doing so Mr Schaede, and Mr Fischer too, were
aware that the applicant claimed industrial property right protection in the
form of copyright in, at the very least, drawings related to the product and I
would infer that in so doing they were aware also of the applicant's design
registration. In this regard Mr Bernard's evidence, it may also be inferred,
would not have assisted the respondent's case.
47. There still, however, remains the question whether the end result of Mr
Schaede's efforts can properly be described as an imitation, notwithstanding
that the element of fraud has been made out.
48. Clearly, a fraudulent imitation may display greater departures from the
original design than would otherwise have been apparent if the case were one
of obvious imitation, for there is involved an attempt to disguise the
imitation. The matter is ultimately one of impression but I am inclined to the
view that, in all the circumstances, there is a sufficient similarity between
the respondent's products on the one hand and the applicant's designs on the
other as to constitute (the necessary fraud being present) a fraudulent
imitation within the meaning of s.30.
49. Had I not been prepared to draw the inference that the respondent was
aware of the applicant's registered designs, a question would have arisen,
which was much debated before me, as to whether fraudulent imitation might
properly be established if the respondent, while not aware of the actual
designs, were aware of the products manufactured from the designs and
additionally aware of the fact that copyright protection was claimed.
50. For the applicant it was submitted that while fraudulent imitation would
ordinarily be established only upon proof of knowledge of the actual
registration of the design or the fact that an application for registration
had been made, this was not a necessary element.
51. It is clear from the Turbo Tek case that the relevant knowledge to show
fraud need not be knowledge of an actual registered design. It is sufficient
if there is reason to believe that an application for registration of the
design is pending. Absent knowledge of an actual registration of the design
or reason to believe that an application for registration of the design was
pending there could, so the respondent submitted, be no finding of fraudulent
imitation. That submission goes contrary to the analysis of Burchett J in
Elconnex Pty Limited v Gerard Industries Pty Limited (1991) 32 FCR 491. In
that case it was submitted that a reason on the part of the respondent to
believe that an applicant had other intellectual property rights besides
design rights (for example, patent rights) could not be used to found a
finding of fraudulent imitation. His Honour said in that case (at 503):
"It seems to me that what makes conduct of the
relevant kind fraudulent is the infringer's
dishonest concealment of the reality of copying
in order to evade being held legally responsible
for it. That form of dishonesty can only arise
where the copier knows or suspects that his
copying will infringe another's legal rights.
But in cases where the nature of what is done
makes more than one form of intellectual
property right relevant, I cannot think it would
be a defence to a charge of dishonest
concealment of an imitation of a registered
design for the infringer to say that he actually
had the other right in mind and was not thinking
of design rights. If it was an infringement,
his misapprehension would not make it any less
so, nor would the particular reason for
concealment affect its fraudulent nature. In
these days of trans-national industries, any
other view might have strange consequences for a
case where an infringer of an Australian
registered design was quite without knowledge or
suspicion of that registration, but perfectly
aware of a registration in another country of
the same design, of which he produced a