20 May 2018

A New Day for Designs

“The EU registered community design, which is less than 20 years old, has brought design rights to the fore,” said Anne Gundelfinger, Vice President, Global IP, Swarovski AG (Liechtenstein), in yesterday’s Session CSA52 Design Clearance in 2018.The session looked at the ins and outs of design clearance, an option that innovative brands are beginning to take advantage of.

“We’ve even seen online platforms starting to take down infringing content based on design registrations,” exclaimed Ms. Gundelfinger.

Over the course of a year, Swavorski receives up to eight demand letters on designs and, according to Ms. Gundelfinger, these come in three distinct types:

First, they come from small designers who don’t even have design registrations but are “morally outraged” that the company’s design may resemble theirs.

Second, they come from big luxury brands that own well-known designs.

Third, and increasingly, they come from “trolls” who “just want to use their registrations to milk you for royalties,” she said.

The picture in Europe is slightly more complex than in the United States because, in addition to EU rights, there will be national rights which may affect the scope of protection.

Additionally, while the scope of protection will be generally similar for U.S. design patents and EU registered designs, there may be a slightly broader scope of protection in the European Union because the test is one of different overall impression.

“Even the courts are [still] sorting out exactly what they think about infringement and the overall impression test,” said Ms. Weal.

John Froemming, Partner at Jones Day (USA) and moderator of the panel, explained that, historically, design rights tended not to get as much attention as utility patents, trademarks, and copyrights, but that this is changing.

He added that, in the United States, designs have to be “virtually identical” in order for infringement to be proved and that the defendant only has to convince the judge that there is a “plain dissimilarity.”

Managing Risk

For Swavorski, the most important part of managing risk is having well-trained designers.

“A lot of people use inspiration as a euphemism for copying. That’s not the case at all,” explained Ms. Gundelfinger. “In design-intensive fields, inspiration is part of the process; it’s expected.”

Fashion houses are constantly looking at the market, asking “What’s on trend? What’s cool?” she added.

Another way to manage risk is to create a record of independent creation—“a far more important element of responding to a demand letter than having done a search,” said Ms. Gundelfinger.

She added: “If I can convince the company that we have independently created a product ,more often [than not], a lot of the moral outrage that tends to drive the case goes away.”

It’s also incredibly important to “understand your competition and what they do own or what they think they own,” said Thomas Adams, Associate General Counsel of The Procter & Gamble Company (USA).

Searching Suggestions

While in the trademark arena, most methods for managing infringement risk rely on conducting searches, the design world is different, according to Ms. Gundelfinger. But that doesn’t mean searching is unimportant.

“In an ideal world, if you had infinite time and money, you’d search every nook and cranny. But this is not a practical reality—you must be time- and cost-effective, making some compromises,” explained Ms. Weal.

The primary purpose of a design search is to assess the legal risk; in order to determine whether there is a potential risk of infringement, you need to know about the context of the design.

“The searches you’re doing can never be completely rigorous, but you hope to establish a good context,” Ms. Weal added.

Searches can also help after a demand letter has been received to help convince the other party that there hasn’t been infringement.

“In a troll situation, they have a particular modus operandi and searches can be helpful in framing your strategy and response,” stated Mr. Froemming.

It’s also important to bear in mind that the evolution of the design throughout the process may or may not be reported back to the legal department, added Ms. Weil.

Timing is crucial. At Swavorski, searches have to fit into the product development process, creating a “fairly short window” to do clearance for final designs, noted Ms. Gundelfinger.

“We’re all hoping there’s a silver bullet of image matching, but I’m very skeptical,” said Ms. Weal. “There’s so much you can’t account for in image matching.”

Ms. Gundelfinger added that technology is currently not developed enough to conduct a global image search, and that it may never develop to the level it would need to be.

In practice, after choosing the relevant Locarno class (an international classification for registering industrial designs), brands may choose to further limit what is being searched for.

While Ms. Weal noted that this increases the risk of missing something, Mr. Adams pointed out that “if you’re looking at the whole class, there’s a human fatigue element.”

He added: “If you’re just doing key word searching on registers, you really have to wrack your brain.”

Finally, it’s important to know “when to stop and not go too far down the rabbit hole,” concluded Ms. Weal.

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