Lift Verkaufsgerate GmbH v Fischer Plastics Pty Ltd

LIFT VERKAUFSGERATE GmbH v. FISCHER PLASTICS PTY LIMITED
No. NG247 of 1991
FED No. 566
Number of pages - 16
Intellectual Property
(1993) AIPC 91-015
(1993) 27 IPR 187

COURT

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
Hill J(1)

CATCHWORDS

Intellectual Property - designs - infringement - obvious imitation - whether the essential features of the applicant's designs repeated in the respondent's products; fraudulent imitation - whether respondent knew that the applicant had registered designs or applied for registration - whether knowledge of some intellectual property right sufficient to found case of fraudulent imitation - whether differences made merely to improve the product or whether made to hide the fact of copying.

Words and Phrases - "fraudulent or obvious imitation".

Designs Act 1906: s.30.

Malleys Limited v. JW Tomlin Pty Ltd (1961-62) 35 ALJR 352; applied.

Dart Industries Inc v. The Decor Corporation Pty Ltd (1989) AIPC 90-569; applied.

Turbo Tek Enterprises Inc v. Sperling Enterprises Pty Ltd (1989) 23 FCR 331; applied.

Elconnex Pty Ltd v. Gerard Industries Pty Ltd (1991) 32 FCR 491; discussed.

HEARING

SYDNEY, 12, 14 and 15 July 1993

#DATE 19:8:1993

Counsel and Solicitors for the Applicant: D K Catterns instructed by

Freehill, Hollingdale and Page

Counsel and Solicitors for the Respondent: R Webb instructed by Minter

Ellison Morris Fletcher

ORDER

THE COURT ORDERS THAT:

1. Applicant's application stood over to a date to be fixed with counsel when argument will be heard as to costs.

2. Applicant on that day to bring in short minutes of order.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

JUDGE1

HILL J Lift Verkaufsgerate GmbH, the applicant, applies to the Court for an injunction restraining Fischer Plastics Pty Limited, the respondent, inter alia, from manufacturing or selling certain compact disk holders and audio cassette holders, said to constitute infringements of Australian Registered Design Numbers 103296 and 103297, the property of the applicant. The respondent denies infringing the applicant's monopoly in the registered designs and in its defence and cross-claim asserts that each of the designs is invalid and should be cancelled because neither was new or original having regard to the prior designs published in Australia before the relevant priority date, in each case 17 June 1988.

The respondent's case on invalidity, as disclosed in affidavit evidence, was that Mr Fischer had travelled to Germany to attend a school reunion in September 1987 returning to Australia in October 1987 and that he had brought back with him, to Australia, an audio cassette holder manufactured by the applicant in accordance with registered design 103296 ("the audio cassette design"), so that that design had been known in Australia prior to the relevant priority date. Other evidence as filed, including an affidavit of Mr Schaede who was, as will be seen, an important witness for the applicant, appeared to corroborate this.
A copy of the product which Mr Fischer alleged he had purchased on this visit became an exhibit in the proceedings. That product used aluminium rods as connectors to join the two plastic sides of the product. The respondent adduced a body of affidavit evidence which made it clear that it first undertook the manufacture in Australia of an audio cassette holder embodying the registered design with aluminium rods, such as that exhibited by Mr Fischer, in the middle of March 1988, that is to say substantially later than the time asserted by Mr Fischer. On this basis the product would not have been available for sale until the end of March or April 1988. Ultimately counsel for the respondent conceded the validity of the two designs accepting that products embodying the designs were not available in Australia at the relevant priority date and, by implication, that both Mr Fischer and Mr Schaede were mistaken as to their recollections of the date when the product was brought by Mr Fischer to Australia.
There were, accordingly, only two issues which arose for determination in the case, both relevant to the issue of infringement. The first, stated in terms of the statutory test in s.30 of the Designs Act 1906 ("the Act") was whether the respondent had applied the designs, or an obvious imitation of them, to its products being an audio cassette and compact disk holder and secondly whether the respondent had applied a fraudulent imitation of the designs to those products.
Each of the registered designs was registered in respect of what, in the registration, is described as "a retainer". The first, ARD 103296, related, in its commercial operation, to a holder for audio cassettes. It was illustrated by the following representations:

(DESIGNS OMITTED)

The second design, ARD 103297, which in a commercial application related to a compact disk holder, was illustrated by the following representations:

(DESIGNS OMITTED)

Expert evidence was called by each of the parties. In the case of the applicant that evidence was from a Mr Redmond, the foundation head of the Department of Industrial Design at the University of New South Wales. In the case of the respondent that evidence was called from a Mr Bayly, currently the managing director of Bayly Design Associates of Victoria. Both are eminently well qualified in the field of industrial design. Their evidence is admissible and instructive but ultimately not determinative. Indeed in the case of a design as simple as the designs in question in the present case, their evidence (couched as it is in language difficult for a layman to comprehend), on the issue whether the respondent's products were an "imitation" of the applicant's designs, may well serve to distract me from the primary question. I prefer to describe the design and the respondent's products in somewhat simpler terms. In doing so I have regard, as the parties agree I may, to the applicants products which indeed embody the designs, although disregarding manifestations of colour, texture and surface treatments. It is not suggested that the applicant's products in any way depart from the designs as registered.
The audio cassette holder design depicts a holder which would contain 13 audio cassettes. Its size is determined by this capacity. There are two sides which are joined together by rods, which may conveniently be described as connectors. These connectors are, in the manifestation of the design represented by the commercial product, of a length determined by the width of an audio cassette. Along the inside of each of the side pieces are a series of semi-circular sockets. At the top of each socket is to be found a flat lip area, which may be described as "a tooth". The function of the semi-circular sockets with the teeth at top is to permit the cassette to be moved or "flipped" forwards or backwards so that either it or the next succeeding cassette will be visible. On the underneath where each of the rods connect the two sides there is a small foot so that the stand will be slightly raised from the surface on which it lies.
The respondent's product is of virtually identical dimensions to those of the applicant. Given the function of the two products to contain audio cassettes, this is not surprising. There are, however, as the expert witnesses point out, a number of differences between the two products. Two may be mentioned here. The first is that there is a marginal difference in the semi-circular shapes but that difference is probably only remarkable because in the Fischer product the semi-circular sockets are closer to the top of the sides than are the corresponding sockets in both the applicant's product and design. The second, but by far the more substantial difference between the two, is to be found in the connectors joining the two sides. In the Fischer product, the connectors are not simple cylindrical rods as shown in the design, but rather two solid moulded plastic connectors of approximately 3 centimetres in width, each reminiscent of two rods with an indentation in the middle with a large rectangular protrusion at the base to act as a stand to elevate the holder from the surface on which it lies.
The expert witness for the respondent pointed in his evidence to the following differences between the Fischer product and the registered designs.
1. The vertical positioning of the part-cylindrical sockets within

the inner surface of each side member on the Fischer product is central thereby providing equal clearance above and below. By way of contrast, each of the registered designs depict the part-cylindrical sockets as being positioned with their lower edge aligned with the bottom edge of the side members thereby providing clearance above the sockets but not below.

2. The outer edges of the side walls are smoothly radiused at the

junction of the inwardly depending flanges on the product whereas in each of the registered designs there is, so it was said, depicted a definite chamfer on the perspective view.

3. The interconnection of the side members on the Fischer product is

formed with two substantial rectangular components each having a proportion of width being approximately equal to three-quarters their length whereas the designs depict the interconnecting cross-members as being slender cylindrical rods.

4. The twin lug form of connection of the interconnecting member and

its alignment position on the side member of the Fischer product is quite different to that depicted in the illustrations of the registered design. This difference is basically as a result of the slender cylindrical form of the interconnecting members illustrated in the registered designs which have only one connecting point at each end, whereas the relatively wide form of the interconnecting member on the Fischer product provides an end wall being able to support twin locating lugs which are located within twin tubular sockets on the side members.

5. The size, configuration and positioning of the four small rib-like

feet on the base of the product are considerably different to the four solid projecting pads depicted in the illustrations of the registered designs.

When asked to summarise the differences between the Fischer products on the one hand and the designs on the other, the expert for the applicants said:

"I think the difference comes down to the connector. There is a significant difference in the design, but I believe it is a discrete and identifiable difference. You can separate it off quite distinctly and say, yes, this is the same design overall, it has the same appeal to the eye but it has a different connector."

The parties were in agreement that the general test for infringement is that stated by the Full High Court in Malleys Limited v JW Tomlin Pty Limited (1961-2) 35 ALJR 352 at 354 where their Honours said:

"An infringement of copyright in a registered design occurs when another person, without the licence or authority of the owner, 'applies the design or any fraudulent or obvious imitation of it to any article in respect of which the design is registered' (s.30(a))."

Their Honours, after speaking of the facts before the Court, continued (on the same page):

"Turning to s.30 it is apparent that there is infringement in any one of three cases - that is, where the design which has been applied is:-

(i) the registered design

(ii) an obvious imitation of the registered design (ie not the same but a copy apparent to the eye notwithstanding slight differences) and

(iii) a fraudulent imitation (ie a copy with differences which are both apparent and not so slight as to be insubstantial but which have been made merely to disguise the copying). Visual comparison will establish (i) or (ii) but a finding of fraudulent imitation must require something more because in such a case visual comparison is not of itself sufficient to establish imitation; otherwise it would be an obvious imitation."

Thus the issue for me is one essentially of visual comparison in order to determine whether the compact disk holders and audio cassette holders of the respondent are of substantially the same shape as those represented by the registered designs, accepting that there may be differences provided those differences may be said to be only slight differences.
In making the visual observation I must bear in mind that the Act is concerned not with ideas or inventions but with design. So, as the High Court in Malleys said (at 352-3):

"It is, of course, true that every shape is not a design; there must be 'sufficient individuality of appearance' to distinguish it from what Russel-Clarke in Ch 2 of his book 'Copyright in Industrial Designs' (1930) 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 by measuring dimensions. It follows that a design need not have the precision of a working drawing; it concerns the shape or configuration of an article, as it appears to the eye. 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. In deciding one way or the other the proportions of common features may be of the utmost importance, but acceptance of this does not involve deciding that to be registrable the representation of the design must be represented so that its proportions can be accurately calculated; it is sufficient if it shows a shape with enough individuality of appearance to distinguish it and to enable it to be determined by visual comparison whether the shape of an article is either the same as, or nothing more than an imitation of, that disclosed by the registered design."

In Dart Industries Inc v The Decor Corporation Pty Limited (1989) AIPC 90-569, Lockhart J usefully summarised, in a judgment with which Jenkinson and Gummow JJ agreed, the authorities relevant to the question of infringement by obvious imitation. As distilled by Gummow J in Wanem Pty Limited v John Tekiela (1990) 19 IPR 435 at 440, these principles:

"Establish that:

(i) first impressions are important in determining whether there is an infringement of a design,

(ii) an obvious imitation is one which is not the same as the registered design but is a copy apparent to the eye notwithstanding slight differences,

(iii) the question must be looked at as one of substance and by examining the essential features of the design,

(iv) a closer correspondence between the registered design and the alleged infringing design is necessary to satisfy the test of obvious imitation than that of fraudulent imitation,

(v) precise mathematical comparisons or matters of measurements or ratios, which form no part of the mental picture which the eye conveys to the brain of shape or configuration suggested by the design, are not to be applied as the test of infringement; appearance to the eye is the critical issue, and

(vi) questions of infringement must not be determined by a narrow or overly technical approach in comparison between the design and the alleged infringement, lest the registration be sapped of its worth to the registered owner."

The parties also accepted the proposition which appears in Russell-Clarke on Copyright in Industrial Designs, M. Fysh, 5th ed, 1974 at 85, and approved in numerous authorities including Decor (supra), namely that:

"If only small differences separate the registered design from what has gone before, then equally small differences between the alleged infringement and the registered design will be held sufficient to avoid infringement."

It is clear that the idea of a design which enables a product to be flipped forward and backwards is not a new one. Counsel for the applicant tendered in evidence a Swiss patent, patent number 262708, containing diagrams for a container for slides where the idea of semi-circular divisions with teeth was employed to enable the slides to be flipped from one side to another for display purposes. A copy of figures 2 and 3 forming part of that patent show the following:
Likewise the applicant is the proprietor of Australian patent number 576282 in relation to a "device for holding or displaying rigid, flat objects such as CD, audio or video cassettes" which discloses the basic idea of the design as may be observed from the following figure 2 as depicted in the patent.
But notwithstanding that some elements of the designs are not novel, it is apparent that the question for my decision must be determined as one of substance by examining the essential features of the designs to see whether those essential features are repeated in the respondent's products. In the present case the essential features are the side faces, the semi-circular sockets with the teeth which operate to prevent the article contained in the holder from moving too far forward or back, the connectors and the feet. Of these elements two of them, which are clearly related as a matter of fabrication, differ substantially, namely, the connectors and feet. In my view the difference in the design caused by the connectors is so great as to present a quite different visual image from that in the registered designs.
This visual difference is sought to be discounted by Mr Richmond who, in his oral evidence, argued that the differences in the connectors and feet should be seen as discrete and separable differences like differences of a bumper bar on the design of a car. With respect that analogy is not a fair one in the present case. Even if it be right to regard the bumper bar as discrete and separable from the overall car design, a bumper bar is such an insignificant part of the overall design of a car that differences in the bumper bar can perhaps be seen as slight differences in matters of overall design. But that is not the case here where the difference in the connectors present clear differences in the appearance of the whole.
Accordingly I am of the opinion that the applicants have not made out a case of infringement by obvious imitation.
Before passing to the question of fraudulent imitation I would note the submission of the respondent that the similarity of overall proportion of the applicant's and respondent's products is a matter dictated by the function which those products are intended to serve. The evidence established, for example, that the width of the products of both the applicant and the respondent was dictated by the width of the objects, namely, audio cassettes or compact disks, which were to be contained in them. Likewise the length of each was determined by the usual dimensions of hi-fi furniture. Similarly the diameter of the semi-circles, and in particular the opening in each socket, was determined by the size of the compact disk or audio cassette to be contained and the flip action which the socket was designed to produce. I should add that although there are differences in the shaping of the semi-circular sockets and teeth, those differences, in my mind, would not have avoided the respondent's product being an obvious imitation of the applicant's design. The overall impact to the eye of these sockets and teeth is the same, despite the differences however significant they may seem to an expert observer.

For a case of fraudulent imitation to be made out, the parties are in agreement that as a minimum it is necessary for the applicant to show that the respondent has actually made an imitation. Thus in Turbo Tek Enterprises Inc v Sperling Enterprises Pty Limited (1989) 23 FCR 331 at 348, in a passage cited by both parties before me, the Full Court of this Court (Sweeney, Fisher and Sheppard JJ) said:

"... we think that it is correct to say that it is open to a court to find that an imitation is fraudulent where the designer or manufacturer of an article, having reason to believe that another article is an embodiment of a design which is actually registered or in respect of which an application for registration is pending, imitates or copies the article."

It is inherent in the concept of a fraudulent imitation that there will be an intention to copy but with differences which, at the end of the day, are "mere disguises to hide the fact of copying". As the High Court put it in Malleys the differences will be "both apparent and not so slight as to be insubstantial" in the case of a fraudulent imitation (see at 354).
There is an area of dispute between the parties as to whether it is necessary that the respondent knew that the applicant had either registered a design or applied for registration of a design before making its own product. It is certainly clear from Turbo Tek that, at least in some circumstances, it will not matter that the design has in fact actually been registered. I shall return to that question later.
It was the respondent's case that it knew nothing of the applicant's registered design or, for that matter, of any application to register. Rather, it was said, the respondent had purchased in Germany the applicant's audio cassette holder which embodied the design in question. That had been brought back to Australia by Mr Fischer who had approached one of the respondent's employees, a Mr Schaede, a technical director with the respondent. According to Mr Fischer he instructed Mr Schaede to redesign the product so as to improve it. The task of redesigning took, so Mr Fischer said, some 18 months to complete and there were, from time to time, discussions between Mr Fischer and Mr Schaede "for improvement".
Mr Schaede swore that when he saw the product he formed the view that the concept was good but that it had various design deficiencies. He agreed that Mr Fischer, either in late 1987 or early 1988, instructed him to work on the product to redesign it to overcome the deficiencies. He said that there were two such deficiencies. The first was the aluminium rod which was used to connect the two side pieces. Mr Schaede said he found the applicant's product unstable and considered this to be a serious design defect. It was he who designed the rigid cross bar which appeared as two tubular poles separated by a depression but which when viewed from the bottom appeared as a rectangular almost square open box. The second area of design deficiency was, according to Mr Schaede, the length of what he described as the flat lip area at the top of each of the sockets and which I have elsewhere referred to as the teeth. He found that the length of the flat lip areas was too short and lengthened it. He explained the length of time which the design process had taken (18 months) as arising because he had only time to do design work between other tasks. He dated the work, he said, as being in late 1987 or early 1988 because at that time he was simultaneously designing a plastic kick-board or plate for the Ford Capri motor car. He said he had been unable to locate drawings other than those which he produced. He said that he had designed a compact disk holder not by reference to any product of the applicant but as an extension of the audio cassette holder design. He said he did not know if the applicant made a compact disk holder.
It will be recalled that the applicant's affidavit evidence made it clear that Mr Fischer could not have purchased the applicant's audio cassette holder at the time he said he did. Although this had been conceded by the respondent's counsel, Mr Fischer, in his evidence, vigorously maintained the correctness of his earlier affidavit evidence. He was a most unsatisfactory witness and hardly ever answered the questions which were put to him, preferring instead to put forward, as an apparent answer, matters which he believed assisted his case. It was no doubt this which caused counsel for the respondent to accept that Mr Fischer was not a witness whose evidence could be relied upon without corroboration. This was not, so counsel submitted, to say that Mr Fischer was untruthful in that it was clear that he believed what he said. However, it was certainly clear that Mr Fischer's firm belief stemmed from endeavouring to reconstruct events rather than from actual recollection.
The first issue for determination involves the question whether, it being asserted that a search was made on behalf of the respondents of the register of patents and designs, that search revealed no registration as the respondents submitted or indeed revealed the applicant's registration as the applicant submitted must have been the case.
The search was carried out by a Mr Bernard who, so the evidence said, was the respondent's director of marketing and sales. According to both Mr Fischer and Mr Schaede, Mr Bernard reported that he had made searches and that the applicant's audio cassette holder was not covered by design or patent registration. A search of the respondent's files had not located any record or search note prepared by Mr Bernard who had left the employ of the company approximately 3 years ago. Mr Fischer's evidence suggested that the parting with Mr Bernard may not have been wholly amicable. No attempt was made to say so directly, let alone to elaborate. There was no suggestion that any attempts had been made to locate Mr Bernard or indeed that he would have been inaccessible to the respondent had it sought him out.
For the applicant evidence was given by a Mr Forster, a patent attorney, that if a search of the Australian patent register had been conducted in October 1987, as it was alleged Mr Bernard had, either by reference to the word "Lift" (with or without the word "Verkaufsgerate") for racks for audio-cassettes or similar products, that search would have disclosed an application for registration of Australian letters patent number 576282, to which reference has already been made. Mr Forster further deposed to the fact that a searcher making a design search after 17 June 1988, when the applicant's application for design registration were filed, would have located the designs.
In these circumstances counsel for the applicant submitted that I should infer that while Mr Bernard made searches, those searches had disclosed both the patent and the designs (assuming the searches were made in the latter case after June 1988) and that the failure on the part of the respondent to call Mr Bernard as a witness allowed such an inference to be more confidently drawn: Jones v Dunkel (1959) 101 CLR 298. There are, it must be said, two competing inferences, namely, that Mr Bernard though instructed to do the relevant searches did not do them or alternatively that Mr Bernard was so incompetent as to be totally unable to do the searches even with the aid of assistance of staff at the trade marks and patents office. Of Mr Bernard's competence little is known save that he was the respondent's director of marketing and sales.
To draw the inference suggested by the applicant however, I must reject the evidence of Mr Schaede and Mr Fischer that Mr Bernard had in Mr Schaede's presence told both Mr Fischer and him that the search had been made and that that there were no patent or design application or registrations for that product.
To resolve this question it is necessary to make findings with respect to Mr Schaede's credit. Perhaps more significantly it is necessary to do so with respect to Mr Schaede's evidence that he set out, on instructions from Mr Fischer, not to copy the applicant's audio cassette holder, making some alterations to disguise the copy, but rather to improve upon the product.
Not surprisingly, having regard to Mr Schaede's affidavit evidence which placed his involvement in designing a compact disk and audio cassette holder as encompassing a period of some 18 months from the time Mr Schaede first saw the applicant's product to the time the respondent began to tool up for its own product, Mr Schaede was examined about this timing. That his affidavit evidence took as the starting point Mr Fischer's return from Germany in October 1987 as the date when Mr Schaede first saw the applicant's product, makes it clear that in making his affidavit evidence Mr Schaede had conferred with Mr Fischer. There is nothing sinister about that. Mr Fischer had been certain (albeit wrongly) of the 1987 date because he had been in Germany at that time for a school reunion. The next time Mr Fischer had been in Germany was 1990 and that date clearly would not have been helpful to the respondent's case.
The problem with this evidence, as I have already explained, is that the product which Mr Fischer claimed to have brought back with him to Australia in October 1987 had not yet been manufactured and indeed was not manufactured until March-April 1988. The earliest therefore the product could have got into Australia was around that time. Mr Fischer was unable to suggest any explanation as to how it got into Australia after March 1988 and before 1990.
Mr Schaede did not give evidence as to when tooling up for the production of the respondent's products began. If, as he said, the design process began in late 1987 or early 1988 and took 18 months before tooling up began, tooling up must have begun at the latest around July 1990. No precise date is given by Mr Schaede in his affidavit. On the other hand, if the very earliest the applicant's product could have come into Australia was towards the end of March or early April 1988, and the same 18 month period was required, then the tooling up period could not have begun until October 1990. That seems somewhat inconsistent with Mr Fischer's evidence that Australian distributors were appointed in 1990 and the Australian market was entered in that year. The inconsistency becomes the more pronounced the later the date upon which Mr Schaede was first shown the applicant's audio cassette holder.
Related to this issue of timing, Mr Schaede in his affidavit evidence had deposed that having first seen the applicant's product in or around October 1987 he had commenced design work to improve it some time thereafter. He said that he had commenced work at the same time as he was working on the design of a plastic kick-board or plate for the Ford Capri motor car, a part which was delivered to Ford in July 1988. In cross-examination Mr Schaede said that he had been able to trace back from drawings which he had retained sketches both for the audio cassette holder and for the Ford Capri. That evidence, if it were accepted, made it clear that the design work had been commenced at least no later than July 1988 and indeed, earlier.
Mr Schaede's evidence gave the impression that he had given this drawing to his solicitor, yet the drawings exhibited by him, and indeed the only drawings he said he was able to produce, did not include any drawing with a Ford Capri part on the same piece of paper.
There were times in the cross-examination when Mr Schaede's evidence suggested that the drawings exhibited to his affidavit did in fact include the Ford Capri part, but when called upon to identify the drawings it was clear that this was not the case.
The final matter upon which Mr Schaede was cross-examined was whether he had noted any indication of industrial property ownership when he had first examined the applicant's product given to him by Mr Fischer. He was asked initially whether he had looked at the product to see whether there was a number on it indicating a registered design. He answered that there was definitely not marked upon the article a "registered design or patent or something on it". His attention was then drawn to the inside of the article where there appeared the letter 'C' in a circle, the figures "1988" and the words "by Lift". He was asked whether he had seen this when he had first looked at the article. His reply was "could have been, yes." He countered, however, that this was not an indication of a registered design but of a copyright. It was put to Mr Schaede then that he would have to have seen this inscription because he had been looking carefully to see whether the item was a registered design. He replied:

"Yes, it would have been, yes, a registered design, yes, looked for that too, even if it does not involve me if it is registered or not, if somebody searches (for) us and finds it is registered, then I have to change it anyway. I can change it and after it's not much hassle changing it enough to get around the registered design."

Pressed upon this answer, Mr Schaede indicated that by it he had meant that there was little difficulty creating an article which had more or less the same function as the original. Pressed further that he had changed the applicant's audio cassette holder sufficiently so it would not look as if he were copying the applicant's product he said:

"No, no, not that. If I want that then I wouldn't have changed the whole thing to - if I wanted to disguise it that much I could have changed the whole shape and all." In further elucidation he said: "Like I said, if I wanted to change the shape it wouldn't have been any problem changing the shape. Some shapes are even easier to make than that one."

It is clear that Mr Schaede is far from an unsophisticated person. He had, as other evidence indicated, a quite reasonable grasp of the significance of copyright. This was so notwithstanding that at one point his evidence appeared to be suggesting that copyright existed only in written or spoken words rather than in other artistic works such as drawings.
His reaction to whether he had noted the copyright claim indicated on the applicant's product somewhat diluted the otherwise confident impression he had made giving evidence. The difficulty I have in accepting his evidence is that at every point at which that evidence was tested, objective facts suggested that it was incorrect. After considerable consideration I have reached the view that I should not accept Mr Schaede's evidence. This does not mean that I believe that he was deliberately telling an untruth. Rather I think that his evidence is a reconstruction, arrived at after considerable collaboration with Mr Fischer, and that it is not reliable.
In these circumstances I would conclude that Mr Schaede did set about, on the instructions of Mr Fischer, making a product as alike as possible to the applicant's product save that differences would be made to it to disguise the similarities of the two products and "to get around the registered design". I would also conclude that in doing so Mr Schaede, and Mr Fischer too, were aware that the applicant claimed industrial property right protection in the form of copyright in, at the very least, drawings related to the product and I would infer that in so doing they were aware also of the applicant's design registration. In this regard Mr Bernard's evidence, it may also be inferred, would not have assisted the respondent's case.
There still, however, remains the question whether the end result of Mr Schaede's efforts can properly be described as an imitation, notwithstanding that the element of fraud has been made out.
Clearly, a fraudulent imitation may display greater departures from the original design than would otherwise have been apparent if the case were one of obvious imitation, for there is involved an attempt to disguise the imitation. The matter is ultimately one of impression but I am inclined to the view that, in all the circumstances, there is a sufficient similarity between the respondent's products on the one hand and the applicant's designs on the other as to constitute (the necessary fraud being present) a fraudulent imitation within the meaning of s.30.
Had I not been prepared to draw the inference that the respondent was aware of the applicant's registered designs, a question would have arisen, which was much debated before me, as to whether fraudulent imitation might properly be established if the respondent, while not aware of the actual designs, were aware of the products manufactured from the designs and additionally aware of the fact that copyright protection was claimed.
For the applicant it was submitted that while fraudulent imitation would ordinarily be established only upon proof of knowledge of the actual registration of the design or the fact that an application for registration had been made, this was not a necessary element.
It is clear from the Turbo Tek case that the relevant knowledge to show fraud need not be knowledge of an actual registered design. It is sufficient if there is reason to believe that an application for registration of the design is pending. Absent knowledge of an actual registration of the design or reason to believe that an application for registration of the design was pending there could, so the respondent submitted, be no finding of fraudulent imitation. That submission goes contrary to the analysis of Burchett J in Elconnex Pty Limited v Gerard Industries Pty Limited (1991) 32 FCR 491. In that case it was submitted that a reason on the part of the respondent to believe that an applicant had other intellectual property rights besides design rights (for example, patent rights) could not be used to found a finding of fraudulent imitation. His Honour said in that case (at 503):

"It seems to me that what makes conduct of the relevant kind fraudulent is the infringer's dishonest concealment of the reality of copying in order to evade being held legally responsible for it. That form of dishonesty can only arise where the copier knows or suspects that his copying will infringe another's legal rights. But in cases where the nature of what is done makes more than one form of intellectual property right relevant, I cannot think it would be a defence to a charge of dishonest concealment of an imitation of a registered design for the infringer to say that he actually had the other right in mind and was not thinking of design rights. If it was an infringement, his misapprehension would not make it any less so, nor would the particular reason for concealment affect its fraudulent nature. In these days of trans-national industries, any other view might have strange consequences for a case where an infringer of an Australian registered design was quite without knowledge or suspicion of that registration, but perfectly aware of a registration in another country of the same design, of which he produced a fraudulent imitation for marketing in Australia."

For the respondent it was submitted that I should not follow what was said by Burchett J in this passage. Rather it was submitted that in s.30 of the Designs Act the expression "fraudulent imitation" relates to imitation of the design and nothing else. It was said that the legislature could not have intended to give the monopoly granted by the Designs Act an effect going beyond the definition of "design" and "monopoly". This was said to be particularly so when regard was had to the regime provided by s.77 of the Copyright Act, which ensures that design protection is not a matter of protection under the Copyright Act.

With respect, I am in agreement with what was said by Burchett J. Section 30 does not confine itself to imitations made in fraud of the particular design. The expression used is "fraudulent imitation". An imitation may be fraudulent in a particular circumstance, notwithstanding that the imitator had no knowledge of the registration of an actual design in a case where the imitator knew or had reason to believe that there was other protection available to the party whose product was being imitated but in a case where the imitation is made with a view to disguising the imitation and defeating such other rights as might exist. Thus although it does not arise in this case, having regard to my finding that there was, in fact, on the balance of probabilities, a search made which disclosed the applicant's design registration, I would have been of the view that in any event there was, in the present case, evidence that the respondent's products represented fraudulent imitations of the applicant's designs.
It follows that I would grant to the applicant the relief sought. I will stand the matter over to a date to be determined to hear argument on the question of costs. On this date the applicant will bring in short minutes of order to reflect my decision.

[1993] FCA 566

19 AUGUST 1993