Interlego AG & Anor v Croner Trading Pty Limited

[1993] HCATrans 354

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• I,	•

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IN THE HIGH COURT OF AUSTRALIA

Office of the Registry

Sydney No SS of 1993

B e t w e e n -

INTERLEGO AG and LEGO AUSTRALIA

PTY LIMITED

Applicants

and

CRONER TRADING PTY LIMITED

Respondent

Application for special leave

to appeal

BRENNAN J

DAWSON J McHUGH J

Interlego 1 19/11/93

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON FRIDAY, 19 NOVEMBER 1993, AT 9.30 AM

Copyright in· the High Court of Australia

MR R.J. ELLICOTT, QC: If Your Honour pleases, I appear with

MR A.J. BANNON for the applicants. (instructed

by Blake Dawson Waldron)

MR D.K. CATTERNS, QC:  May it please the Court, I appear

with my learned friend, MS S.J. GODDARD, for the

respondent. (instructed by Mallesons Stephen

Jaques)

MR ELLICOTT:  Your Honours, we have filed some fairly

lengthy submissions in relation to the matter in

accordance with what we understand is the practice

which the Court is seeking to develop in relation

to matters such as this and to that extent, much of

what I can say in this application is already in

those arguments.

Your Honours will have noticed that all this

started because of the difficulty over the meaning

of what one might have thought were four ordinary

English words "capable of being registered". A

great deal of debate has raged around the meaning
of the words in the context of the Copyright Act of

1911 and the Copyright Act of 1969.

In relation to that matter, and in relation to

the other issues in the appeal, each of the matters

raised, we would submit as a matter of continuing

general importance, both to the designs laws, to

the copyright law, to the questions of passing off

and evidence in relation to passing off in

section 52 matters, and also to the administration

of justice, each of the matters that we have

outlined goes to an issue which is raised simply in

this case. The facts are not complex, the object

in question is rather simple and well known, and

the issues about fundamental form, design and the

like, and the issues about whether evidence is

admissible to prove likelihood of deception are

within an area that is well known.	But they are
all very important issues and of continuing

relevance to issues that arise before the courts.

This case, therefore, we would submit, would

be an appropriate vehicle in which to raise those
issues and have this Court determine them.

BRENNAN J: That perhaps raises the first important question

for us on this application, Mr Ellicott, and that

is why is it that it should be this Court, rather

than the Federal Court, that determines these

issues?

MR ELLICOTT:  So far as the question of design and

fundamental form is concerned, this Court in

Malleys has already laid down the proposition and

Interlego 19/11/93

there is obviously a variance both within the

Full Court itself between the judgment in this case

and the judgment in Hosokawa's case, which we have

summarized in those submissions, and there is a

variance between the decision in the Full Court and
the decision in Malleys' case, where the question

of fundamental form was discussed.

That issue, we say, is one appropriate for

this Court to consider and about which to lay down

appropriate principles, because there is complete

confusion in the judgments in the Federal Court,

and we say that with great respect, between

Hosokawa's case and the decision in this case.

In one case, the majority said that

fundamental form was very significant and that it

relied, in part, on novelty and the prior art; in

the Interlego case, the case we are concerned with,

the Full Court, with great respect, said the

opposite. Now, in one case, Mr Justice Gu.mmow was

the minority judge, that is in Hosokawa; in this

case, he was in effect the person who gave the

judgment of the court. But the thinking that is

involved in that is at variance - and it is very

difficult to expand on this in this short hearing -

with the notion of fundamental form which was

considered by this Court in Malleys, which adopted

a passage from an old book, Russell-Clarke, which

went into the question of fundamental form and said

that it involved conceptions of novelty.

So this is a very important question which

this Court should deal with. It should not be left

to the Federal Court because, although normally an

issue might be left to it, I can understand that,
in this case we would submit there is confusion
there.

There is another question which arises and which is fundamental - before that, I should

mention that in this case the Full Court did not

overrule Hosokawa, they left it on the books and it

is there for persons like my learned friend,

Mr Catterns, and my learned junior to argue about

well into the future if it stays that way. But

another question of significance is the

admissibility of evidence in relation to deception,

the likelihood of deception.

Mr Justice Gu.mmow and, in effect, the

Full Court have said that evidence about the

likelihood of deception is not admissible. It is

very flat-footed.	And if that is the
principle - - -

Interlego 3 19/11/93

McHUGH J: But having regard to what the trial judge said

about it, is this is a suitable vehicle to

entertain this particular - - -

MR ELLICOTT:  We would submit so, Your Honour, because we

were entitled, as is any appellant, to a

consideration by the Full Court of whether or not

the evidence in question was evidence which should
have been taken into account by the trial judge and
given effect to in one form or another. Now, so
far as this case is concerned, therefore, we say

that before this Court it is a suitable vehicle, that it is not just an issue of fact, and at the

heart of it is a very significant principle

because, if one goes back to early cases, the

question of reputation on the one hand and

deception on the other are two concepts that are

inextricably bound, you cannot separate them.

For instance, in the Bayer case in the 1960s,

literally hundreds of witnesses came and were asked

"What does the Bayer cross mean to you?" and they

gave their evidence. That evidence was used in the

High Court by Mr Justice Kitto, and the judgment is

referred to in our notes, both on reputation, but

also on the likelihood of deception.

In the case that Mr Justice Gummow relies on,

the G.E. case, one finds that Lord Diplock, in the

passage that Mr Justice Gummow relies upon to say

that it is inadmissible, is not really saying that

at all. What he is saying is that in addition to

the evidence before us, it is a matter for the

judge ultimately to form an opinion based on that

evidence. When you look at the evidence in the

case - and we have attached the relevant page to

the submissions - you find that the very questions

that were asked in the survey in this case were

asked in a survey which was the evidence in that

case of G.E. So the decision of Mr Justice Gummow

on that issue is completely at variance with the

decision in the G.E. case, in our submission, and

it leaves a great doubt overhanding the

admissibility of evidence of this character.

Now, that has been happening, we would submit

with respect, that is that type of evidence,

whether it is oral evidence from witnesses in the
witness-box, or whether in more recent times in the
nature of a survey, that has been admitted in the
courts and accepted as evidence that goes to the

issue of likelihood of deception. It is not

evidence that somebody would be deceived, that is

not the point; it is evidence, as it is evidence of

actual deception, it is evidence of the state of

mind of the person. A person who is shown a

product and is asked, "Who do you think is the

Interlego 19/11/93

manufacturer of that?" And in this case they were

asked to study it and, after studying it,

23 per cent said, notwithstanding it has got Tyco

super blocks on it, that it was manufactured by

Lego. That might go to reputation, but it also

goes to the likelihood of deception.

So if that evidence is to be shut out, then we

would submit that there is some deep flaw in the

law or deep inconsistency between the decision in

this case and decisions in previous cases.

Another very important issue arises in this

case as to the relevance - although it is a
question of fact in the long run, it is an
important issue and that is whether, to put it in
broad terms, if somebody copies precisely a

product, that that can be the basis of passing off.

One would have thought it could potentially be the

basis of passing off. It raises to some degree the

issue in Puxu, which Your Honours will recall, a

decision which, if I may say so with great respect,
the Federal Court justices find difficult to cope

with from time to time. It raises that sort of

issue but it also raises a distinct issue as to

whether - for instance, if a trader, as did Tyco,

purposely go out to be as close to Lego as they

possibly could so far as the product was concerned,

because they wanted it, as they said, to work with

Lego; and use the same colours, the same

distinctive colours; exactly the same sizes because

it has to fit in the same way; then whether in such

circumstances that is a significant element in

passing off in section 52 cases.

In this case, obviously, if they sell things

with windows on them, they see the blocks. And
they think, of course if it is our case, they would

think Lego. Now, I do not want to take that any

further, but simply to say that there is a real

issue as to how far a party such as Lego, which has

we can all say we are familiar with it, whether it been trading obviously for a long time and probably	can gain a reputation surrounding the shape and
colour of its blocks and the reputation partly attaching to the precision of it, the utility of
it, et cetera, et cetera.

So far as fundamental form is concerned, if I

might just indicate that, we said that the drawing,

the shape in the drawing - and that is why we
attached the drawing, because really the block is

not the test - was dictated solely by function.

The evidence was that these dimensions were very

precise; that they wanted to have a toy building

set; that the height of those studs on the top, for

a purpose of enabling children to more easily - if

Interlego 19/11/93

they are too long then they have the effect of not being easily pulled apart et cetera; they have got

to be a certain distance from the sides in order to

give continuity so that it gives a vertical wall or

whatever it may be; or it has to such that you can

swing around it; in other words, all the elements

of it - and again, I am wary of the restrictions of

time - are functional, we say.

I appreciate that is an issue of fact, but

this issue about whether or not the fundamental

form of an article is different to the shape which

is the claim in the design - - -

DAWSON J:  You are shifting from function to fundamental

form now.

MR ELLICOTT: Yes, but you see Mr Justice Lockhart, in

Hosokawa, the majority said that the fundamental

form of an article is basically that which is

dictated solely by function. One starts off with

the proposition this is dictated solely by function

but in the Full Court judgment they do not say

that. That is one of the problems that is inherent

in this particular judgment and it is one of the

reasons why we would submit, with respect, this

Court ought to give special leave to appeal because

these issues are going to remain on the table, as

it were, of the courts and courts are going to

spend more time in dealing with it.

Again, another issue I meant to mention which

this Court, so far as we are aware, has not fully dealt with, is the relevance and admissibility of

survey evidence. That would be an issue which

would definitely come up in the appeal because my

friend has said, "Well, you can't rely on that; you

should have been outside a store and taking
evidence from people who came out or as they were

buying", as my friend's leader before

Mr Justice Sheppard said he did in the Lemon case.

But, of course, the possibility of getting that

sort of evidence is potentially remote; that you

get people at the point of sale or just after sale.

So far as survey is concerned, that method of course is well known to commerce and, not only

that, the use of surveys is extremely important, as

Your Honours readily realize, to shortening the

cases and preventing the prolongation of these

cases on reputation and the like. The sooner the

courts have a guidance from this Court as to the

circumstances in which surveys ought to be admitted

and the principles attaching to them, I would say,

if I may say so with respect, the better, because again, there are views in the Federal Court which are not necessarily consistent. And although the

Interlego 6 19/11/93

court has said, yes, you can do this, first of all

you have to get your survey settled before the

judge, and then when you go to the judge, the judge

might have views which are not always consistent

with the views of commerce. In other words, the

proper principles apply in relation to surveys are

also involved in this case.

So, Your Honours, we would submit, with

respect, that this is an appropriate case. Yes, it

has started off in a sense in Hong Kong many years

ago and it did not to the Privy Council and they

have expressed their views on some of the issues;

and, yes, it has been through the Federal Court and

now, some years later, we are coming to this Court.

But all the time these basic issues are there and

we would submit that they are proper issues for

this Court now to grapple with.

BRENNAN J:  Mr Ellicott, although I have read your notes of

argument and found them of considerable assistance,

I confess I do not think that I have with precision

understood the precise points that might fall for determination by this Court if special leave were granted. Could I ask you four questions: first, could you identify the observations of the judgment

of Mr Justice Gummow in this case which are in

conflict with the judgment in Hosokawa and in

Halleys. That is the first problem, I think. The

second I was going to ask you is could you identify

the passage which relates to passing off by product

similarity and this precise error that you say

exists in that passage. And then the two

evidentiary questions that you have canvassed, if

you could identify the passages there and where the

error or inconsistency in the Federal Court

judgments exists.

MR ELLICOTT:  Your Honour, so far as the design issue is

concerned, if I can refer to that, that is dealt

with - and we referred to the passages at page 4 of

our notes - the first one is 205, line 24, and

Your Honour will appreciate that in Hosokawa - - -

BRENNAN J:  No, I do not appreciate as in Hosokawa, that is

my problem.

MR ELLICOTT: All right. In Hosokawa, 26 FCR, at page 408 -

and I will read the passage - - -

BRENNAN J:  Do you have copies of Hosokawa?

MR ELLICOTT: Yes, we do.

McHUGH J: It is the passage set out in the judgment, is it

not?

Interlego	19/11/93
MR ELLICOTT:	I think there may be two, Your Honour.

McHUGH J: It is at page 206 in the judgment, if that is the

passage.

MR ELLICOTT: Mr Justice Lockhart said, and

Mr Justice Northrop agreed;

In my opinion Utilux and Interlego

provide strong support for the view that
features of a design are dictated solely by
the function which the article has to perform,
not when the article's function for successful

performance requires that it be made in that shape and in no other, but when the relevant

features of the shape are brought about solely

by or are attributable only to the function

which the article in that shape is to perform

even if the same function could be performed

by an article of different shape. The essence

of the registrability of a design is that it
has an element of novelty having regard to the

nature of the article and the state of the

prior art. The cases mentioned earlier speak

eloquently of this -

et cetera. That is that passage. At page 205,

line 24, Mr Justice Gummow said:

Novelty in this context means little more than difference; and, even then, it is not

difference in relation to other designs (the

prior art) -

Now, this seems to be completely to the contrary.

That is that aspect of it. Then there is

Mr Justice Lockhart's proposition in Hosokawa, it

was referring only to the registrability of a

design and not its nature. Now, that seems to be

in the teeth of that passage, having regard to the

nature of the article and the state of the prior

art. That passage is at 206, lines 1 to 5.

the references by his Honour to
novelty ..... were made in the context of the
registrability of a design rather than of the
nature of a design itself.

We would submit that that is a difficult

distinction to draw in the circumstances of the

case. Then the learned judge below,

Mr Justice Gummow, at page 208 line 1, says of

Malleys:

The High Court referred to fundamental form as

a tag rather than a legal criterion, using the

phrase as a convenient short-hand way of

Interlego 19/11/93

saying that a shape must be sufficiently

indefinable before it can be called a design.

DAWSON J: Indefinable.

MR ELLICOTT: 

It has got indefinable. My friend has crossed

out "in" for me. Whichever it is, it does not help
to distinguish the High Court decision where

Mr Justice Gurnrnow and the other justices have

agreed have used fundamental form as a tag. Now,

that was not a tag in the passages set out in

Malleys v Tomlin on page 207. It is not used as a

tag, it is a rather significant matter. About the

middle, line 17 on page 207:

The answer to these contentions lies, we

think, in the recognition of what is essential
to distinguish a design from a mere shape. It

is, of course, true that every shape is not a

design; there must be 'sufficient

individuality of appearance" to distinguish it

from what Russell-Clarke in Chapter 2 of his

book ..... 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 be measuring

dimensions. It follows that a design need not

have the precision of a working
drawing ..... 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."

What is not quoted there is later in that statement

in the High Court:

Applying these principle to the shape of the

bottom for a toilet pan that has been

registered as a design, we consider that

taking the various features that are disclosed

and there general arrangement, there is

sufficient individuality of appearance to

justify registration of the design as new or

original.

Now, we would submit that Their Honours there have

not used fundamental form as a tag but going to the essence of a design. There is a lengthy passage in the work of Russell-Clarke which, just shortly:

The question at once arises as to what is this

imaginary article to be taken as being.

Interlego 19/11/93

That is conceiving the fundamental form.	What is
the fundamental form of a building block?

DAWSON J: There is something very metaphysical about all

that.

MR ELLICOTT:  It is, but that is the area that this law is

into, and Your Honours might ultimately decide it

ought to be taken out of that area. But it is

there. So far as fundamental form is concerned,

you have to conceive, when it is shape as distinct

from pattern, what is the fundamental form of a

building block. We have sought to give it

practicality by saying it was the original building

block that we drew in 1946, and this was one that

was drawn in 1968. But whatever it was, there was

nothing different from the fundamental form. If

you take the knobs off, it really is no different

to the shape of an ordinary brick.

One can get very worked up about the shape of

a brick, I suppose, if you are a design engineer,

and say, that has got the golden rectangle in it.

There are golden rectangles all over the place, but

they are all common forms. That has got a common

form to it.

DAWSON J:  It is really that to which the embellishment is

added, is it not?

MR ELLICOTT: Yes, and we say - our case was, and I do not

want to get into the facts - that no embellishment
was added to this because the fundamental form of

that was dictated by function, that was one point;

and the second point was, when you look at the

question of novelty, this was not novel, that had

been there before, and toy building bricks were

well known and this was no different to them.

Familiarity, in this case, does not breed contempt;

familiarity tends to make people warm and cuddly

about Lego. But if one is looking at the drawing,

a cold drawing which is the real test, not the

coloured bricks - and we have attached that to the

submissions at page 18 - one sees more readily, we
would submit, what we are submitting.

At page 404 in Hosokawa there is a passage towards the bottom, about eight or ten lines up:

In particular, I cannot accept that the

amendment made in 1919 introduced for the

first time into the Designs legislation of

England the notion that, if a design is to be

a "design" within the meaning of the Designs

legislation, upon application to an article it

must produce some visible alteration to the

fundamental form; it must appear to the eye to

Interlego 10 19/11/93

contain characteristics over and above the

fundamental form. This had then been the law

for a long time. Fundamental form of an

article was described by AD Russell-

Clarke .... as "those primary essential features

which are the property of the fundamental

article".

BRENNAN J:  What is the difference between that and the

words on 208, lines 3 to 6?

MR ELLICOTT:  Your Honour, His Honour Mr Justice Gummow

there is dismissing fundamental form.	He is
saying -

BRENNAN J:	He is giving a meaning to it.
MR ELLICOTT:	No, he is saying it is a tag.

BRENNAN J: Whatever he describes it as, "using the phrase

as a convenient short-hand way of saying", he then

goes on to say what it means.

MR ELLICOTT: Yes.

BRENNAN J: What is the difference between the meaning which

Justice Gummow assigns to it and the passage which

you have just read from 404 from Hosokawa?

MR ELLICOTT:	The difference is, Your Honour, that in the cases it is absolutely clear that the question of
fundamental form, that is the conception of what is
the fundamental form or the identification of what
is the fundamental form, is the first step in
deciding whether a design is a design for the
purposes of the Act.

BRENNAN J: Well, it can be a first step. Does it have to

be?

MR ELLICOTT: It has to be a first step. It is the first

step in this case.	What His Honour was
saying - - -

BRENNAN J:  What would be the fundamental form, for example,

that would have been applicable in the B & D Door

case?

MR ELLICOTT: It would have been applicable there, yes.

BRENNAN J:  What was the fundamental - how could you

describe a fundamental form of a door lock?

MR ELLICOTT:  Your Honour, it does not answer the question

to ask me that question, with respect, because the

courts have wrestled with this problem. I can

understand that Your Honour may find conceptual

Interlego 11 19/11/93

difficulty with it, but the courts - they did it in

Malleys. They must have been saying, "What is the

fundamental form of the bottom for a toilet pan?"

Your Honours and I might be more familiar than

others with the fundamental form of the bottom of

the toilet pan, but they asked the question, and it

has been there as part of design law from the very

beginning. So that it is not something which one

can readily dismiss and say, "Oh, well, it doesn't

matter. In other cases you don't have to worry

about it." In every case you will not have to

worry about it, simply because it is obvious that

there is a design involved. Or it may be a

question of "What is the difference between that

particular shape and this particular shape?" and

there is then an issue there.

But when you get into the area of defining

whether this is a design, that is the drawing in

this case, then you immediately have to answer the

question, according to the law, what is the

fundamental form? Now, that passage does not - it

dismisses fundamental form. It is not enough to

say, a shape must be sufficiently definable before

it can be called a design, because it begs the

question, "What do you mean by sufficiently

definable?" That raises the issue of fundamental

form. In other words, does it have that

individuality of appearance which a design must

have before it is registrable. Or is it so much

identified with the fundamental form that you

cannot say that. That was the issue in Malleys;

that is the issue here, and that is why - it is the

issue that Mr Justice Lockhart accepted in

Hosokawa; it is the issue that Mr Justice Gummow

dismissed, in our respectful submission, in this

case.

DAWSON J: If you think of fundamental form in a platonic

sense, it gets closer to it, does it not? It is

merely a concept.

MR ELLICOTT: Yes. There is a sense in which it is

imaginary and conceptual and Russell-Clarke does

emphasize that in the passage that they relied

upon. He said:

The question at once arises as to what is this

imaginary article to be taken as being.	The
article is the general type of article in
question, the genus or species qua use or

purpose. For instance, chairs as a class, or

tables as a class. Its shape must be taken to

be the simplest and commonest known form of

that type of article.

DAWSON J: That is platonic, is it not?

Interlego	12	19/11/93
MR ELLICOTT:	Yes.	And in that sense it would, in our

submission, be appropriate in this case to ask the

very same question. At page 208, line 15:

There is no suggestion in the authorities that

there is a need to examine the prior art,

identify common features, construct an

imaginary article, and then determine the

extent to which the shape put forward as a
design differs from that mental construction.

At most, the High Court requires that the

shape be sufficiently certain and identifiable

before it can be treated as a design.

Now, we say that is in conflict with what the

High Court has said.

Again at page 216, lines 1 to 5, there are

similar passages:

If there is, then it is no objection that

every feature of the shape is functional.

This issue is not dealt with by comparing an

article in that particular shape to an

imaginary article in an indeterminate, generic

shape and attempting to identify points of

similarity and difference.

We would say that is in the teeth of what the

High Court in Malleys has adopted, in

Russell-Clarke and what Hosokawa is saying.

Now, Your Honours, on the question of

admissibility, at page 245 at line 21:

Rather, the purpose of the evidence was

to show that potential consumers would have

been deceived. Evidence to that effect is

inadmissible, since that question is the very

issue which the Court has to determine.

That has, we would submit, grievous judicial error

in it because it misconceives what the purpose of

the evidence was. The purpose of the evidence was

about the state of mind of these ladies, who had

children under 14, sitting in a shopping mall.

That state of mind fringes into reputation, but it

also goes into deception. The passages that he

relied on are found at pages 240 to 242, and at

240, line 20, he says:

the question whether a mark or get up so

nearly resembles another as to be deceptive or

likely to deceive is a question for the

tribunal of fact and is not a matter for any

witness to decide:

Interlego 13 19/11/93

One can literally agree with that, but the problem

is that His Honour draws a conclusion which is not

a logical conclusion, that is to say, therefore no

evidence whatsoever that could bear upon that

question is admissible.

The witnesses are not saying, "I would be

deceived." That is not the evidence they are

giving; they are saying, "Look, when I see this now

I think the person who made that is Lego." Now, a

judge sitting in a court, he or she can say, "That

is very helpful to me. That is probably what I

would think." Or say, "That is a lot of nonsense."

or "Those people are sitting in an artificial

situation" and reject it or whatever the view is of

the judge, but to say it is inadmissible is fatally

flawed, we would submit. That is that part of it.

Your Honours, I do not think - this is my

recollection of it - that there is any passage that

deals with the question of the identity between the

product. It is more a matter that we complain of

because there is no doubt that at the hearing of

the appeal we raised the question that this was an

extremely relevant issue on the question of passing

off or breach of section 52. There does not - I

could be wrong, but I do not think I am,

Your Honours - I do not think Their Honours have

dealt with it in this judgment.

That is an issue as to which there could be

significant consideration given, and it is an

important issue in the light of traders who do copy

precisely what another trader has done. And that

is what has happened here, and done it for a

purpose, an agreed purpose, namely so that the

product could be sold to the public and it would

work with Lego.

The only other issue I think I have to mention

to Your Honours - I do not know whether I have

covered all those -

BRENNAN J:  I think you have, because you have dealt with survey evidence in the course of - - -

MR ELLICOTT:  Yes. The only other issue I wanted to mention

was the question of the meaning of "capable of
being registered" which we say, when you look at
section 17 of the Designs Act, it says:

Any new or original design, which has not been published in Australia before ..... may be

registered -

and you ask the question, "Is it capable of being

registered?" And the answer is "No." because it,

Interlego 14 19/11/93

eg, for one reason, is not novel. That is a reason, not "new or original" or it has been published before in Australia. That is a reason.

In that reasoning, Your Honours will find that the

judges below have placed great relevance on

absurdity in assisting them to come to the opposite

conclusion of what we would say was the natural and
ordinary meaning of those words. But absurdity

abounds in these sections because if a design lacks

eye appeal, you can get copyright in it - I used

the word "design" there not properly, in the sense

that if a claimed design lacks eye appeal and is

not a design, then it will have copyright.

In the Popeye case, King Features v Kleeman,

they did not intend to use it for three-dimensional

form when they made the drawing of Popeye way back,

but the Privy Council said, or the House of Lords

said you did get copyright if you did not intend to

do it at the original time the work was made. Now,

in a sense that is absurd because when you make it

you do not intend, but two years later you do, but

you get a copyright in three-dimensional form for

the life of the author and 50 years thereafter.

Absurdities abound. Or if we are right on

fundamental form, if it does not have fundamental

form - yes, if it equates with fundamental form,

likewise there can be copyright.	So nothing comes
from absurdity,

The other aspect of it, and I finish on this, is that in relation to "capable of being

registered", it still arises under the new Act.

This question of the overlap between copyright and

design has been plaguing law reform commissioners

for some time but they never ever got it right, in

our submission. The new section 77 which says:

(d) at that time, the corresponding design is

not registrable -

we would say that means not capable of being

book. According to the Full Court it was a design, registered. This is at page 234 of the application it was registrable so Lego does not fit into that -

or has not been registered under that Act.

The cases to which we refer at page 12 of our

submissions, Ogden and Edwards Hot Water, by very

highly respected judges in this area,

Mr Justice Franki and Mr Justice Kearney, they are

cases which would imply in the words "has not been

registered" could have been registered. We would

say in our case, could not have been registered because of lack of novelty. It is not right to say, therefore, that that aspect of the case is no

Interlego 15 19/11/93

longer relevant. It is. It is a live issue, it is

obviously a live issue in relation to the nature of

the design, but it is also a live issue on the

construction of the words "capable of being

registered".

The Privy Council placed immense reliance on

those words having a retrospective effect. With

very great respect, the Privy Council's judgment

does not bear a great deal of logical examination,

and Mr Justice Gummow agreed with us in relation to

that. I do not think my friend was all that

enamoured of it below. But what Mr Justice Gummow

did and the Full Court was to say, well, it is not

retrospective, but to give it a very special

meaning. We said, well, if you do not give it a

retrospective meaning and it is prospective, it all

fits into place and there is no problem of

interpretation.	You just give it its ordinary
meaning.	And we took it and applied it to

section 17 of the Designs Act and said it cannot be

capable of registration because it is not novel.

Those are our reasons, Your Honours.

BRENNAN J:  Thank you, Mr Ellicott. Mr Catterns.

MR CATTERNS:  May it please the Court. Your Honours, could

I hand up a brief outline.

BRENNAN J: Thank you.

MR CATTERNS:  In our submission, the question of fundamental

form is a non-issue. It was used by the High Court

in Malleys as a simple way of stressing the

requirement that a design is for a specific shape

or configuration. One can attempt to define a

table platonically as a more or less horizontal

surface, supported by one or more more or less

vertical supports. But that tells you nothing.

All that you need to have a design is something

that is sufficiently specific so that the scope of

the monopoly can be ascertained.

And that is what the High Court, I

respectfully submit, were saying in Malleys in the

passage that is conveniently set out at application
book 207. As my friend reminded Your Honours, the

design in that case was for the bottom of a toilet

pan of the type before sewerage. The shape was a

circle with a little dome in the middle and a

J ring, and the whole case turned on the J ring.

There was a little annulus around the outside of it

in a J shape that the cylinder sat on.

The submission was that that is all too vague

to be a design. That submission was put at line 9

Interlego 16 19/11/93

on page 207. First it says "too vague" at line 8,

then Their Honours record the submission that:

any person inspecting the certificate of

registration, although shown the features of

the design, could not know the extent to which

a different arrangement of those features

would be protected -

in other words, you would not know the scope of the design. Th~ answer that is given here, at line 21:

there must be 'sufficient individuality of appearance' to distinguish it from .... 'the

fundamental form' -

And that is exactly what the High Court said in the

Firmagroup case that Your Honour the presiding

Justice mentioned a while ago. That was for the

handle in the garage door. The High Court was able

to deal with that matter without any platonic

debate on what is the fundamental form of a handle

for a garage door: is it a rectangle, is it a

rectangle with a recess; Your Honours remember that

they looked quite different.

The question in any case, in determining

whether something is a design, is whether there is

a sufficiently specific definition of the shape and

configuration of an article. There is no question

of general importance, I submit, on what the

meaning of the doctrine of fundamental form is.

There is no such doctrine. It is just a helpful

tag, as His Honour Justice Gummow put it. It was

found helpful in Malleys; it was not found

necessary or helpful in Firmagroup. Your Honours,

so far as Hosokawa goes, this is not an appeal from

the Hosokawa decision.	The reasons fundamental
form -

BRENNAN J: But is there any conflict between this decision

and Hosokawa?

MR CATTERNS:  No, Your Honours, I submit, and I submit my

learned friend was not able to point to one,

because the passage at the bottom of 205, line 24,

is just a perfectly adequate paraphrase of the

passage in Malleys that I just referred

Your Honours to, "difference in relation to the

simplest form of an article". That is because my

friend has put novelty on two levels: there was

the general lack of novelty that made his design
unregistrable; and then there is a particular
doctrine of fundamental form and its

interrelationship with novelty, and if there be

such a doctrine, His Honour Justice Gummow

summarizes it perfectly well and virtually

Interlego 17 19/11/93

identically to the High Court in Malleys in those

last four lines.

Your Honours, the question arises because if

our construction of section 218 is right and the

words "constituted a design capable of being

registered" mean as the Full Court held, a design within the meaning of the Act, he has to say, "Oh no, this is not a design within the meaning of the
Act because it is the fundamental form of the

article." So they have to submit that the

fundamental form of a toy block is exactly this

form. He has to submit that when his drawings were

drawn, which is the relevant moment in terms of

section 218, the fundamental form of the toy block

was not a rectangular prism, say, of any dimensions
but this precise form, with these proportions,
these sharp edges about which there was a lot of

evidence, these circles on the top, eight studs

instead of six or four, all of the clean lines

underneath and so on, all of the features of shape

and configuration, our friends try to say are part

of the fundamental platonic form of the child

building block. That is how it arises in this case

and that is why, as a matter of fact, it can be put

aside very rapidly, with great respect.

Similarly, Your Honours, with respect to the question of "dictated solely by function", the

evidence was of a design expert, accepted by

His Honour Mr Justice Sheppard and upheld by the

Full Court, that all of these features that one

sees in the block or, as my friend rightly says,

the drawing, are not dictated solely by function.

These could be triangular studs, they could be

2 millimetres higher, thereby giving a different

impression of shape or configuration, the ratio of

length to height to width could be entirely

different. All of those are features of

configuration. That is what gives one the specific

shape or configuration of this design and that is

submit that in neither the fundamental form or	just not dictated by function. So I respectfully
dictated by function aspects of our friend's
submissions, which is the first part of their
submissions, is there any error or is there any
question of importance.
So far as section 218 goes, the construction of the words "constituted a design capable of being
registered", His Honour Mr Justice Gwnmow drew attention to the absurdities of result but his
reasoning does not depend on those absurdities. It is right that the Privy Council placed rather more
emphasis on the absurdities.

Interlego 18 19/11/93

There are two very good reasons, as matters of

construction, why the construction adopted by the

Full Court is right. These are, as Your Honours

remember and as explained at some length by

His Honour Justice Gummow, section 218 re-enacts section 22 of the old English Act, the 1911 Act,

which became the law in Australia by virtue of the

1912 Act and it said, copyright shall not subsist

in a design which, at the time it was made,

constituted a design capable of being registered.

In Australia now the notion of an artistic work

being a design does not work because an artistic

work is a representation on a piece of paper of a

drawing, whereas a design is a mental conception of

features of shape and configuration. So to say an

artistic work constituted a design does not make

sense in 1993.

But in 1911 there was a notion of the design

of an artistic work and it meant things like the
arrangement of the subjects, the groupings of them

and so on. And Justice Gummow cites the passages

from the old Fine Arts Act, the Hanfstaengl v

Empire Palace case and so on. So it makes sense,

as a matter of construction, for the forerunner of

section 218 to say, the artistic work constitutes a

design, namely it showed you an arrangement of its

subject-matter, capable of registration. That can

mean, as a matter of construction, of the type

which the Designs Act registers.

Then there is a fundamental other point which

His Honour also used as part of his reasoning before getting to questions of absurdity.

Copyright depends on the making of a work by a

person. The author draws his drawing. Now, the

moment the author draws his drawing you know, all

around the world, where the copyright subsists in

it. It depends on whether it is original, in other

words, whether he has copied it slavishly or not;

whether he is a citizen of one of the countries

protected in the conventions and so. Section 218

also adds a consideration of his intention:

whether he intends to industrialize it.

Now, all of those matters are matters directly

related to the work and its making. If our friends

are right, a Danish author does or does not have

copyright in his drawing in Australia, depending on

the mere chance of whether somebody has published

in Australia blocks that corresponded to his

drawing. As it so happened, there was evidence in

the case that blocks made by Hilary Page, from whom

Lego got the original drawings, happened to have

been published in Australia before the works in the

case were made.	So, by sheer luck you may escape
section 218.

Interlego 19 19/11/93

Now, that is not an argument as to absurdity,

Your Honours. It is entirely foreign to the notion

of copyright that its subsistence should depend on

utterly extraneous matters, matters extraneous to

the work and its making. That is why, with

respect, His Honour Mr Justice Gummow was right on

that.

Your Honours, section 218 related to the works

made before May 1969 when the new Act came into

force and section 77 relates to the works after

that date. As Your Honours remember, section 77

was itself amended in 1990.

So far as the old section 77 goes, our friends say very little. The words "capable of

registration" do not even appear. They have to be

implied into it at all before my friend can even

get started on the argument about what they might

mean. So, I submit that the courts below are

certainly right on that.

Your Honours, so far as the new form of

section 77 goes - - -

McHUGH J: This argument only relates to drawing No 8, does

it?

MR CATTERNS: Yes, Your Honour. There is in fact a large

number of drawings post. We just chose drawing 5

and drawing 8 as examples. Drawing No 5 is

section 218 and drawing 8 is section 77.	It is a
post-1969 drawing.

Your Honours, so far as that goes, the Act was

amended after His Honour Justice Sheppard reserved,

as Your Honours remember, and therefore we had no

opportunity of proving all of the elements of the

new section 77. Their Honours' orders appear at

page 273 where Your Honours will see that in fact

our friends got an injunction - order 2 - which,

incidentally, would give them all the practical

injunctive relief they seek in the matter because

our blocks are reproduced as their drawings.

Your Honours note that order 3 is suspended

until the evidentiary questions are dealt with

before His Honour below. So, at least so far as

the question of the new section 77 goes, our

friends' application is premature if not

incompetent and, as we submit in our written

submissions, the matter would inevitably come back

to this Court on the application for special leave

of either our friends or ourselves.

Your Honours, so far as the question of

admissibility goes of survey evidence, it is right

Interlego 20 19/11/93

to say that His Honour Justice Gummow used the

words "inadmissible" but, Your Honours, I do submit

that His Honour ultimately dealt with the question

at page 247, line 3. The passage begins at page 245, and our friends read

of weight and, in particular, upheld weight. That appears

that to Your Honours.	Your Honours will note that
Justice Gummow says:

the primary Judge, for the main part, accepted

the position as I have explained it -

and that includes the use of the word "admissible"

earlier.

Your Honours, that is the problem with the

survey. The hypothetical situation which was

created was so artificial as to make it a quite

dangerous guide. To hand somebody a box outside a

supermarket and say, "Who is the manufacturer of

this product?", it is quite unsurprising that

23 per cent of people, trying to be helpful, say,
"Lego". His Honour held, after some of those
witnesses were cross-examined - some of the
respondents to the survey were cross-examined, and

hearing submissions about the form of the

questions, that it was so artificial as to be a

dangerous guide. I would respectfully submit that

there is no question of law arising from that. On the facts, His Honour Justice Sheppard said he got

no assistance from the survey - I interpolate:

rightly - and Justice Gummow was not erecting a new

principle here.	He is upholding His Honour on
that.

Finally, Your Honours, no question of

reconsideration of the Puxu case arises. Puxu does

not hold, as a matter of law, that the sale of

an identical product cannot be misleading conduct.

On the facts of the given case, in Puxu,

particularly with the labels underneath the

cushions of an expensive item, the High Court held

it was not misleading conduct.

The question, no doubt, in some cases, the

sale of an entirely identical product without more

may be misleading but that is a matter that depends on the facts of each case. And there is no general question of law which arises. For those reasons,

we submit, the application should be refused.

BRENNAN J:	Mr Ellicott.
MR ELLICOTT:	Your Honours, it is clear from the cases that

you can have a design which is dictated solely by

function, and you can have other designs, so

Interlego 21 19/11/93

called, which are also dictated solely by function

in relation to the same object. In other words,

you just do not have one emanation of fundamental
form; you can have several. That is made clear in

Hosokawa.

BRENNAN J:  You could have several manifestations of a

fundamental form?

MR ELLICOTT: Yes.

BRENNAN J:	None of them specific.
MR ELLICOTT:	You can have several manifestations of an

article which are dictated solely by function. In

other words, simply because you find for designs or

shapes, that there is a difference between this one

and that one or another one, they may each be

dictated solely by function and not one of them may

be a design within the meaning of the Act.

Now, on the other hand, one asks the

questions, "What is the fundamental form of such an

article in such a case?" One would say that the

fundamental form would be dictated solely by

function but none of those is sufficiently

different, that is to say, it did not have that

individuality of appearance that gave it the

character of a design.

On the question of novelty, my friend

conceiving this person in Denmark, quite properly, making the drawing at the beginning: the question

of novelty arises for each jurisdiction at that

very point. It has either been previously

published or it is either novel or original, new or

original, or it is not at that moment. There is no

difficulty about that being part of the intrinsic

nature of a design.

The old section 77, which Your Honours will

find at page 226, raises the question "capable of

being registered" because when it says "the

corresponding design has been registered" it must

assume - this is in section 77(l)(d) - that it

could have been registered or was capable of being

registered.

Your Honours, if the point that my friend

raised in relation to the new section 77 and the

injunction that we obtained and was suspended, in

so far as that relates to the factual matter, we

are prepared to concede that if that is the basis

upon which the Court might consider rejecting

special leave because it is not a matter that we

ultimately want to debate. But we do want to

debate what we say is the real issue and that is,

Interlego 22 19/11/93

in this very respect, the meaning of the new

section 77.

So far as page 247, lines 3 to 15 are

concerned, that is where my friend sought to say,

"Well, this is just a question of fact", it is

absolutely clear that Mr Justice Gummow was saying,

"I'm not looking at this evidence because it is not

admissible":

As I have indicated, in the absence of a

specialised market, evidence of consumers or

retailers as to their likely reaction should

not be admitted on the issue of whether

conduct has been, or is likely to be

misleading or deceptive.

If the Court pleases.

BRENNAN J:  Thank you, Mr Ellicott. The Court will adjourn

briefly in order to consider what course it should

take in this matter.

AT 10.40 AM SHORT ADJOURNMENT

UPON RESUMING AT 10.49 AM:

BRENNAN J:  The decision of the Full Court of the Federal

Court as to the meaning of the phrase "a design capable of being registered" in section 218 of the

Copyright Act 1968 (Cth) appears to be consistent

with the decisions of this Court in Malleys Ltd v

J.W. Tomlin Pty Ltd (1961) 35 A.L.J.R. 352 and
Firmagroup Australia Pty Ltd v Byrne & Davidson

Doors (Vic.) Pty Ltd (1987) 61 A.L.J.R. 495;

73 A.L.R. 321 and to give to that phrase a meaning

which is both reasonable and in conformity with a

policy attributable to that Act in its relationship

with the Designs Act 1906 (Cth).

In those circumstances, it is not appropriate

to grant special leave to appeal to this Court to
disturb a ruling of the Federal Court. Unless
there are special circumstances in the case, the

interpretation and application of the provisions of

the Copyright Act are matters which ought

ordinarily to be determined by the Federal Court.

A fortiori, at this stage of the litigation,

special leave should not be granted to consider the

construction of section 77 of the Act.

Interlego 23 19/11/93

The evidence which was rejected by the Federal

Court was not of such cogency as to make the

question of its admissibility a question which

ought to attract the grant of special leave. The

question of passing off by product similarity is

not an issue which enjoys a sufficient prospect of
success on appeal to warrant a grant of special
leave. For these reasons, the application is

refused.

MR ELLICOTT: If it please the Court.

MR CATTERNS:  Would the Court make an order for costs,

Your Honour.

BRENNAN J:  You have nothing to say on that, Mr Ellicott?

The case is refused with costs.

AT 10.51 AM THE MATTER WAS ADJOURNED SINE DIE

Interlego 24 19/11/93