IP 2.7 REGISTRATION OF INDUSTRIAL DESIGNS
Section 14 (1) vests the right to registration on the statutory creator not necessarily the true creator of the work. The statutory creator is the first to file or validly to claim a foreign priority. However, Section 14(2) provides:
- The true creator is entitled to be named as such.
- Where application is made without the consent of the true creator, all rights in the design shall be transferred to the true creator.
Designs created in the Course of Employment. At common law, the right was vested in the employer/master-Lazarus V Charles. In the Equator manufacturing case, the court further observed that the employee is not entitled to use the design even after he resigns. The salary is enough.
Under the Act, the right is generally vested in the employer except a term to the contrary is provided in the contract of employment.
The UK act provides that where the design is computer generated, the right shall be vested in the person who made the arrangement.
Under Section 14(4) of the act:
The employee shall be entitled to additional remuneration where:
- The contract of employment does not require the employee to exercise any creative activity, but he has in creating the design used data or means that his employment has put at his disposal.
Taking into account his salary and the importance of the design. This entitlement is not modifiable by contract.
The registrar is in charge of registration of designs. His function seems procedural rather than substantive. Once a design has been registered, the registrar must publish a notice of the registration.
By Section 20, Protection can last for 5 years from the date of application. Can be renewed for another two consecutive periods of 5 years. This brings the maximum to 15years.
Where the grantee desires more years, he can apply to the registrar within 12 months from the expiration of the last term. In practice, this seldom happens because designs run out of fashion quickly.
Rights conferred by the Registration:
Section 19. The statutory owner has the exclusive right to:
- Reproduce the design in the manufacture of a product.
- Import, sell and utilise for commercial purposes, a product reproducing the design.
- Hold or store the product for the purpose of selling it.
Rights conferred in Section 19 may be exploited based on the preference of the owner. An industrial design is a form of property thus it can be (Section 23):
- Transferred by succession.
- Held in joint ownership.
The agreement should clearly set out the nature and extent of rights being transferred. Where a design is held in joint ownership, a licence must be granted jointly and assignment must be with the consent of the other joint owner.
Renunciation: By Section 21 the registered owner of an industrial design may renounce his protection before its expiration. Provided that where it has been licenced, the consent of the licensee should be sought before renunciation-Section 21(2d). Such renunciation must be registered before it can take effect-Section 21(2C).
Nullity: By Section 22, a public officer, or a person with sufficient interest may apply to the court to invalidate the design on various grounds (Maybe it is not new, it is contrary to public order and morality (non-conformity with Section 13(1)), that the statutory owner has no right over the design, and so on…(See Section 23). The registered owner of the design should be accorded fair hearing where his design is sought to be nullified and such nullity decree must be registered. In Iyeru Okin Plastics V Metropolitan Industries: the design was nullified for lack of newness.
Section 19 grants certain rights to the registered owner of a design (Like the right to preclude others form importing, selling, manufacturing, reproducing etc… as discussed earlier).
By Section 25(1), Infringement occurs where an unauthorised person does (or causes to be done) any act listed in that Section (i.e. Section 19.
The court would compare the registered design with the alleged infringing one. They shall be compared side by side-Ajibowo V Western Textile Mills. Where both designs are sufficiently similar, infringement would most likely be construed-Apple Incorporation V Samsung Electronics Ltd. The question is whether from a reasonable distance or upon close examination the consumers would mistake the infringing design for the registered one. In Controlled Plastics V Black Horse Plastic Industries, the court construed infringement where the colanders looked similar and would likely deceive customers notwithstanding that the plaintiff’s colander had thicker lines. In Sumal Foods and Confectionary Limited V Wholesome Processing Ltd, the defendants were manufacturing tootsie chewing gum which had a similar packaging to the plaintiff’s (registered) twist chewing gum. Held that the acts of the defendant amounted to infringement and awarded N200,000 damages.
The plaintiff should ensure that his statement of novelty covers the design feature alleged to have been infringed. Failure to do this in Chukwumereje and sons V Manufacturing Industries and Iyeru Okin Plastics V Metropolitan Industries, was fatal to their case.
Who can sue for Infringement? The registered owner of the design has the locus to sue. However, a licensee may sue where the registered owner has persistently refused to sue despite repeated requests-Section 25(4).
Section 25(2) provides “damages, injunction, accounts or otherwise”…
DAMAGES: Monetary compensation for harm caused by the infringement. The court would consider the flagrancy of infringement and damage must be that which flows naturally from the infringement-Pfizer Inc V. Polyking Pharmaceutical Limited. As in this case (Pfizer case) nearly 24 million naira was awarded as damages. There is no hard and fast rule-Tyre V Firestone (as was held in this case) the court may also construe the damages in terms of royalties that would have been paid if the defendant had gotten a licence from the plaintiff.
INJUNCTION: “injunction” comes from the Latin Word “injungere” meaning to forbid or command. It is an equitable and discretionary remedy which directs a party to do (mandatory) or refrain (prohibitive) from doing an act. Granted in deserving situations where damages would be insufficient. In American Cynamid V Ethicon Ltd, the House of Lords listed the conditions for its grant viz:
- There must be a substantial issue to be tried. Meaning that the plaintiff’s claim must not be frivolous.
- The balance of convenience must weigh in favour of the plaintiff. Meaning that the plaintiff would suffer more harm/damage if the order is not granted-ACB V
- Where damages would adequately compensate the applicant, an injunction may not be ordered.
- The applicant should make an undertaking as to damages. Meaning he should undertake “responsibility to mitigate hardship” caused to the other party-Kotoye V
- How best would the ends of justice be served?
An injunction was granted in James Oitomen Agbonrofo V Grain Haulage and Transport Ltd, to prevent the defendants from producing infringing boilers.
ACCOUNTS FOR PROFITS: This is an alternative to damages. Usually entails the defendant surrendering the profits (made from sale of infringing articles) to the plaintiff (registered design owner). In practice, this is a laborious remedy because it may be hard to trace all accounts. This remedy was ordered in-James Oitomen Agbonrofo V Grain Haulage and Transport Ltd.
DELIVERY UP: Here, the infringing articles, objects and machines are handed over to the plaintiff (for destruction) to prevent the reintroduction of the articles into the market-James Oitomen Agbonrofo V Grain Haulage and Transport Ltd.
ANTON PILLER ORDER: facilitates infringement actions. It is an order of the court (applied for in camera) authorising the plaintiff to enter the defendant’s premises and seize or photograph infringing materials needed for evidence. The plaintiff should be in the company of a police officer not below the rank of assistant superintendent of police-Section 25 Copyrights Act
In Anton Piller V Manufacturing Processes, the court stated that the plaintiff must establish that:
- There is a strong prima facie case for infringement not mere suspicion.
- He would suffer serious damage if the order is not made.
- The defendant is in possession of incriminating documents which would be destroyed if he becomes aware of the allegation. As Lord Denning noted: if the defendants were forewarned there is grave danger that vital evidence will be destroyed.
The courts are wary in granting this order due to its reaching effects on the legal rights and obligations of the parties. It has been criticised as amounting to trespass, invasion of privacy, liberty, fair hearing (Because it is granted at the defendant’s back), as guaranteed under the 1999 Constitution. Also goes against the rule against self-incrimination provided under Section 175 of the Evidence Act. These criticisms were written off in Oluwanishola Development Co V Guinea Insurance Co and Ferado V Unibros Limited.
The patentee or registered owner of an industrial design may exploit his right as he deems fit. He may licence, sell, assign, etc.
Exploitation may be by:
- Voluntary licences (which includes: -Contractual Licences and Licences as of Right).
- Compulsory licences.
ASSIGNMENT: By Section 24, property in the whole or part of the invention can be assigned just like any other chose in action. NB: A chose in action is an intangible right over property which can only be enforced by taking legal proceeding. E.g. a right over shares.
An assignment puts the assignee into the shoes of the patentee/registered design owner. It must be in writing and signed by the parties. Additionally, to take effect against third parties, such assignment must be registered (after payment of prescribed fees). In Arewa Textile V. Finetex Ltd failure to register assignment rendered the case inchoate (according to Salami J.C.A).
LICENCE: (Section 10, 23) unlike an assignment which has an element of ownership, a licence merely grants the licensee permission to do an act which (but for the licence) would have amounted to an infringement. A licence may be voluntary or compulsory.
Voluntary licence: A voluntary licence may be divided into contractual licence and licence as of right provided for under Section 10 and 23 of the Patents and Designs Act.
Contractual Licence: Here, the patentee enters into an agreement with another person (the licensee). Such licences must be registered to take effect against third parties. The parties should ascertain:
- Their roles (patentee/licensee)
- The subject matter of the licence.
- The length/duration of licence.
- The geographical application of the licence.
- The remuneration payable (whether in lump sum or royalty/periodical).
- Whether the licensee can sub-licence.
A good solicitor should consider inserting the following clauses/terms
- Quantitative and qualitative measures to check the licensee and maintain standard and prevent over flooding of the market.
- Termination clause: in the event of breach or for convenience.
- Governing law clause: What law should govern the agreement?
- A settlement clause: rather than going straight to litigation.
- Who institutes proceedings in the event of a breach by another?
Section 23(3) prohibits and invalidates any unreasonably restrictive clause.
Section 23(4) provides that unless there is a contract to the contrary, the licensee cannot grant sub-licenses.
Section 10 licence of right: If the patentee wants the invention to be exploited by as many people as possible, he can tell the registrar to register the words, “licence of right” alongside the licence. This entertains requests from interested person and suggests that the patentee is open to granting licenses. The amount of annual fee payable shall be cut by half. If he cancels the licence of right, he shall pay up all annual fees as though he never made the licence of right.
This goes to show that the law encourages the grant of a licence to facilitate exploitation by worthy individuals and development from such exploitation. Note however that the terms of a license of right shall be fixed by the court.