Oakley Inc. v Animal Ltd and Others
| Jurisdiction | England & Wales |
| Judge | Mr Peter Prescott QC |
| Judgment Date | 18 February 2005 |
| Neutral Citation | [2005] EWHC 210 (Ch) |
| Court | Chancery Division |
| Docket Number | Case No: HC 02 CO2484 |
| Date | 18 February 2005 |
[2005] EWHC 210 (Ch)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
PATENTS COURT
Royal Courts of Justice
Strand, London, WC2A 2LL
Mr Peter Prescott QC (Sitting as a Deputy Judge)
Case No: HC 02 CO2484
Mr James Mellor and Mr Pushpinder Saini (instructed by Bird & Bird) for the Claimants
Miss Fiona Clark (instructed by Reynolds Porter Chamberlain) for the Defendants
Mr David Pannick QC and Mr Simon Malynicz (instructed by the Treasury Solicitor) for the Secretary of State for Trade and Industry
Hearing date : 17 July 2004
Subsequent submissions in writing
I direct that pursuant to CPR PD 39A §6.1 no official shorthand note shall be taken of this judgment and that copies of this version as handed down may be treated as authentic.
Mr Peter Prescott QC
This case is part of a battle between rival makers of designer sunglasses. But it may have implications which go far beyond the worlds of fashion and designs.
A constitution tells us who has the power to make the laws that govern a country. This case raises a point about the constitution of the United Kingdom.
The UK is part of the European Union. The EU issues directives. They are proposed by the European Commission and approved by the European Parliament and Council. Article 249 of the Treaty Establishing the European Community explains that "A directive shall be binding, as to the result to be achieved, upon each Member State to which it is addressed, but shall leave to the national authorities the choice of form and methods".
It follows that once a directive has come into force the Member States are bound to bring about the result that it requires to be achieved, and to do so by the date it specifies. This may require them to change their own internal laws. Should a Member State refuse or fail to do so it may be brought before the European Court of Justice, and fined. By remaining part of the European Union a Member State accepts that liability.
When we joined the European Community in 1972 it was appreciated that we would be required to implement directives. Article 189 of the Treaty of Rome said so, and its wording was identical to the current Article 249. So Parliament passed a very important constitutional measure. It made it possible for our law to be changed without need for any further Act of Parliament. It is section 2(2) of the European Communities Act 1972. It provides that a designated government minister or department shall have the power to make regulations. By section 2(4) those regulations not only have the force of law, they may even amend an Act of Parliament.
A question that arises in this case is: Can a government minister or department use these powers to make regulations which bring about a result that is not mandated by a European obligation? If there is such a power, how far does it go?
I have listened to arguments on behalf of the Secretary of State which satisfy me that the power that she claims must go very far indeed. Because regulations made pursuant to section 2(2) can amend even an Act of Parliament, as I have already observed, there is raised a question of some constitutional importance. 1 Furthermore, and contrary to what was anticipated back in 1972, a very great use is now made of the powers conferred by section 2(2) by some government departments.
While this judgment was in preparation the European Court of Justice issued its decision in Case C-255/01 Markopoulos (7 October 2004). It raises yet another point of law—this time of European law—which may be of importance. It is about derogations. Therefore, I postponed the handing down of my judgment in order to receive arguments from the parties.
European directives frequently contain 'derogations'. A derogation is an exception carved out of the broad scheme of the directive which Member States can avail themselves of if they want to. The case before me is about a derogation.
The question is: to what extent, if at all, may a Member State avail itself of a derogation after the final date by when the directive was supposed to have transposed the directive into its internal law as a matter of urgency?
How Those Points Arise.
The actual issue I have to decide could not be more mundane. Is Registered Design No. 2,059,677 invalid for prior publication? But the answer to that question may depend on which person or body had the power to make the relevant law about the validity of registered designs.
As I have said, the issue is part of a battle between rival makers of designer sunglasses. I shall call them "Oakley" and "Animal". Oakley are suing Animal for infringing their registered design. They claim that Animal's sunglasses are too close. Apart from other defences, Animal say: "Well, your registration is invalid
anyway, and should be declared to be so, because your design was not new. You published the design yourselves, before taking proper steps to register it".
This is the trial of a preliminary point of law. The parties have agreed certain facts which can be taken to be true for the purposes of this preliminary issue. They are very simple.
On 10 May 1996 Oakley sold in this country sunglasses made according to their disputed design. Of course, by doing this they disclosed the design to the public in this country. To use the jargon of registered designs law, they 'published' their design in the UK. One month later, on 10 June 1996, Oakley applied for design protection. (They did it in America; but nothing turns on this because Oakley in due time followed it up with a British application. So the British application takes the benefit of the American date, 10 June 1996).
Animal did not bring out their competing design—the one Oakley are complaining about—until much later. By that stage there had been important changes to our law of registered designs.
However, the fact remains that Oakley's design was published in this country before Oakley applied for design registration. Therefore, say Animal, the Oakley design registration is invalid. But Oakley riposte: "According to which law?" For, as we shall see, there are two different laws that might have applied to the situation.
According to the version preferred by Oakley, the law allowed a 12-month grace period. During that period Oakley were entitled to sell their sunglasses without needing to initiate steps to register their design. They could, so to speak, test the market to see if it was worth their while to incur the expense of registration. Since 10 May 1996 was well within the grace period, it follows that the Registered Design is not invalid for prior publication.
According to the version preferred by Animal, the law allowed no such grace period. It follows that the Registered Design is invalid for prior publication.
Which version is right? The answer is said to depend on who had the power to make the law in the first place.
The Legal Protection of Designs.
In this country there are at least two kinds of property in designs. I shall call them 'Registered Design' and 'Unregistered Design Right'. In some ways they are similar, and it is possible to have both at the same time. Some of the main differences between them are set out in the following table.
| REGISTERED DESIGN 1. Must be officially examined. 2. Recorded in a public register. 3. The design must be new. 4. Can be infringed by any design that is too close—even accidentally. 5. Protection lasts up to 25 years. 6. Is governed by the Registered Designs Act 1949 as amended. | UNREGISTERED DESIGN RIGHT 1. Arises automatically. 2. Cannot be registered. 3. The design need not be new, but must be 'original' (created independently by its author), and not commonplace. 4. There can be no infringement unless there has been plagiarism. 5. Protection lasts up to 15 years. 6. Is governed by Part III of the Copyright, Designs and Patents Act 1988. |
Sometimes yet a third kind of protection is available for designs, which I shall call Industrial Copyright. In practice this is effective where the design is 'for an artistic work or a typeface' 2. An 'artistic work' could be a drawing, a photograph, a model for a building, and so forth 3. For example, the author of a sculpture (which counts as an artistic work) could license its reproduction in the form of garden gnomes (which is a form of industrial exploitation). Like Unregistered Design Right, copyrights cannot be registered: they arise automatically.
There is a fairly obvious relationship between these rights but sometimes it is quite complex. For example, if you infringe the Industrial Copyright in a design you do not infringe the Unregistered Design Right also (1988 Act, s.236). And in certain circumstances the Registered Design right will have expired when the copyright did (Registered Designs Act 1949, s.8(5)).
In order to obtain a British registered design you must fill in a form and send it off to the Designs Registry—a branch of the Patent Office—together with a depiction of your design. Officials at the Registry will then search their records to see if the design, or one similar to it, was already known. If they think your design is sufficiently new, and that your application complies with the other requirements of the law, they will cause it to be recorded on the Register. Your competitors are then entitled to search the Register (subject to certain exceptions which are not relevant here), and so they can take steps to avoid inadvertently infringing your right.
In practice many designs are registered which should not have been. (For example, the official search may have failed to spot that the design was not really new. It is easy for this to happen seeing that the files...
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