Natwest Bank launches IP lending scheme
Earlier this year Natwest Bank launched a new scheme to allow intellectual property to be used as collateral.
On 3 November 2015, the UK Supreme Court heard the Magmatic v PMS case relating to the design of Magmatic’s Trunki children’s ride-on suitcase.
In its decision, the Supreme Court upheld a previous decision of the Court of Appeal that the children’s suitcases, Kiddee cases, produced by PMS, do not infringe the Trunki cases produced by Magmatic.
The case of Magmatic v PMS centred on a key legal issue concerning the scope of protection provided by a registered design in the European Union. The decision of the Supreme Court is believed to have a great impact on designers and innovators attempting to enforce their registered design rights.
2006 – Magmatic is formed and Trunki suitcases are first sold. Famously, Magmatic’s owner, Rob Law, appears on Dragons’ Den and leaves without investment from any of the celebrity investors.
2012 – Sales of Trunki suitcases reach 1.3 million
July 2013 – Magmatic wins a High Court judgment against PMS in which it was held that the Kiddee suitcases, produced by PMS, infringed Magmatic’s registered design for the Trunki suitcase.
In March 2014, PMS appealed the decision of the High Court. Controversially, the Court of Appeal found the Kiddee suitcases produced a different overall impression on an informed user when compared to Magmatic’s design for the Trunki suitcases, and therefore, the Court of Appeal, reversing the High Court decision from July 2013, ruled that the Kiddee cases did not infringe the registered design right owned by Magmatic for the Trunki suitcases.
The controversial decision stemmed from the interpretation of the monochrome representations (one representation is shown below) filed as part of the registered community design (RCD) for the Trunki suitcase. A monochrome representation should mean the design is not limited to particular colours, and thus, PMS could not use the colours of a Kiddee case as a point of distinction between the Kiddee and Trunki suitcases.
However, the RCD representation does show a distinct contrast in colour between the dark wheels and strap, and the lighter shaded body of the suitcase.
The Court of Appeal held that the colour contrast between the wheels and strap, and the body of the RCD was a striking feature which was not present in the Kiddee case design. Hence, the overall impression created by the two designs on the informed user was held to be “very different”. The Court of Appeal concluded that the monochrome representations of the RCD were sophisticated to the extent that they could be distinguished from simple black and white line drawings which solely indicate shape.
Thus, the scope of protection of the RCD is limited to a design with a striking contrast in colour between the wheels and strap, and the body of the suitcase.
It may be argued that simpler black and white line drawings could have afforded the Trunki RCD a broader scope of protection, potentially resulting in a finding of infringement by the Kiddee case design.
Magmatic appealed the decision of the Court of Appeal. Due to the importance of the legal issues raised, the case was heard before the Supreme Court on 3 November 2015.
The decision of the Court of Appeal noted the importance of surface decoration and contrast of colour when considering the overall impression created by the designs.
This allowed the extensive surface decoration (whiskers and stripes) of the Kiddee case to be considered against the relatively plain body of the Trunki case. Moreover, the contrast in colour between the wheels and strap, and the body of the Trunki RCD could be considered against the uniform colour of the wheels, strap and body of the Kiddee case design.
The Supreme Court decided that the contrast in colour found in the representation of the RCD resulted in specific features which became a core part of the design. As these specific features were not found in the Kiddee case, there was no infringement of the RCD. Thus, the Supreme Court upheld the decision of the Court of Appeal.
The decision of the Supreme Court has been described as “an undoubted blow” for the design community, reinforcing the provision that for infringement to have taken place, the later design must bear a strong resemblance to the registered design.
The decision also emphasises that registered design protection does not extend to protection of an idea or an invention, but only to the design of a product.
Comparison between the Trunki RCD (left column) and the Kiddee case design (right column)
Other intellectual property (IP) rights relevant to a product protect the technology embedded in it or the process by which it may be made (patents), the brand names or logos of the manufacturer/seller of the product (trade marks); and any text, images or sounds associated with a product (copyright).
Registered design rights are often overlooked but they can be a cost effective method of protecting the aesthetic appearance of products by providing a low cost and fast registration with a maximum term of protection of 25 years (5 years longer than a patent).