Pacrim Trading Co Pty Ltd v Ford Motor Company of Australia Ltd
[2007] ADO 3
•6 August 2007
DESIGNS ACT 2003
DECISION OF A DEPUTY REGISTRAR OF DESIGNS
Re:applications for licences under s.27B(7) and Regulation 29 [Designs Act 1906) in relation to registered Designs 131506, 131507, 131508, 131509, 131510, 131511, 131576, 131577 - CAR PART DESIGNS – by Pacrim Trading Co Pty Ltd., and opposition thereto by Ford Motor Company of Australia Ltd.
Delegate: Dave Herald Representation: Applicant: Philip O’Higgins, assisted by Tim Rivett and Anne Reynolds of McCullough Robertson, solicitors
Opponent: Gary Fitzgerald, assisted by Joy Atacador of Davies Collison CaveDecision: Application for licences. Applications refused. Background
The matter concerns 8 Designs, which may properly be described as relating to motor vehicle spare parts. The first extended terms of these Designs expired on 16 August 2002 [Designs 131506, 131507, 131508, 131509, 131510, 131511], and 5 September 2002 [Design 131576, 131577]. Pursuant to S. 27A(13) and regulation 23(2) of the Designs Act 1906 (the Old Act), the term could be extended for a further 5 years – provided the relevant payment was made no more than 6 months after the expiry of the term. The attorneys acting for the owner made the necessary payments for all these Designs on 22 May 2002. But shortly afterwards (by letter of 5 June 2002) the owner requested cancellation of the renewal requests and refund of moneys – stating:
We have since received new instructions from our client, and they now wish us to cancel the renewal of the Design.
As the renewal request had not been fully processed at that time, the request was given effect. Ultimately the Designs ceased, and were subsequently advertised as such.
On 9 Dec 2003, the owner requested an extension of time to pay the renewal fee for each of the Designs. Those requests were supported by a declaration from the person with the relevant authority to make decisions about whether a Design should be maintained. The declarant asserted that there had been confusion within the relevant Division of the owner regarding the vehicle model to which the Designs related. The cause of that confusion was stated to be unknown. The declarant asserted that it was never the owner’s intention to let the Designs cease. The delegate of the Registrar accepted the declaration as being prima facie sufficient to grant an extension of time. The extension was duly advertised for opposition purposes – and in the absence of any opposition, the extensions were formally granted on 28 April 2004.
Where a Design ceases, and is subsequently restored under s.27B of the Old Act, that Act makes specific provision to protect persons who availed themselves of the Design because it had ceased. This is an important counterbalance to the right to restore a Design. That provision has been discussed in Theo & Vicky (1998) 42 IPR 100, and in HRC Project Design v Orford (1997) 38 IPR 121 (which concerned the corresponding provision in the Patents Act1990). As should be apparent from those decisions, where a person has knowledge that a Design has ceased, and has a real commercial interest in using the Design, it ought to be a simple (if not trivial) matter to arrange one’s activities in a way such that the conditions for the grant of a licence are satisfied.
In the present case, the evidence clearly shows that a Mr Campbell, the principal of the applicant for the licences, was aware that the Designs had not been renewed by the end of their term – with the possibility that they would not be renewed by the end of the grace period. The evidence also indicates that Mr Campbell understood that true freedom to use the Design did not arise until 3 months after the end of the grace period (the minimum period of extension under s27B before the licence provisions of s.27B(7) are enlivened.) However, mere awareness of the possibility of cessation is not enough for the grant of a licence; legislative requirements need to be met – in particular, that the license applicant has availed itself of the Design, and that this occurred in knowledge that the Designs had ceased. The current opposition is essentially based on arguments that the applicant has failed to demonstrate that it has met those requirements.
While this matter comes for determination under the Designs Act 2003 (the 2003 Act), s.154 of that Act preserves any relevant “application, request, action or proceeding” that was on foot when the 2003 Act commenced and that had not been finally dealt with. Consequently this matter must be determined under the relevant provisions of the Old Act.
At this point I should note that Mr Campbell is apparently the principal of the licence applicant Pacrim Trading Co Pty Ltd (Pacrim), and is the only person involved with the applicant who is identified in these proceedings. The relationship between Mr Campbell and Pacrim was canvassed in an earlier hearing between the parties [Ford Motor Company of Australia Ltd v Stephen Campbell of All Crash Parts Pty Ltd [2006] ADO 1], which inter alia concerned the correct identification of the licence applicant. For the avoidance of doubt, I note here that I have taken any relevant actions of Mr Campbell as being those of Pacrim, rather than of Mr Campbell acting in a personal capacity.
Preliminary Matters
One limb of the opponent’s argument was that the licence applications were invalid, having regard to the transitional provisions of the 2003 Act. This issue was canvassed at the earlier hearing between the parties (supra), where the delegate rejected the opponent’s arguments. At the hearing I noted that there were serious difficulties re-opening that issue – referring to Ex parte Mole Engineering Pty. Ltd. (1981) 35 ALR 119, 1A IPR 284, and Broken Hill Pty. Co. Ltd. and Comalco v. American Can Co. 29 ALR 424. While it would seem that the opponent still considers the validity of the licence applications to be an issue, they withdrew that line of submissions. I would just add that if the opponent wished to pursue their argument in a different forum, they would need to demonstrate that the interpretation they press does not render regulation 12.04 redundant over s.154.
Another issue of contention was whether s.27B required a causative relationship between the acts of availing, and knowledge of the fact of the Design having actually ceased. At the hearing, the applicant drew an analogy between s.27B(7) of the 1906 Act, and s.139(2) of the 2003 Act– noting that under the 2003 Act there is clearly no express causative relationship between the commercial use of the Design and knowledge of its ceased status. However in the ensuing discussion, the attorney for the applicant noted that he was reading s.27B(7) as if there was a comma after ‘concerned’ in the phrase ‘availed themselves … of the Design concerned because of the failure to do the relevant act’. The effect of inserting a comma here is to dis‑associate the qualification following ‘because’ from the fact of availing, associating it instead with the fact of an extension of time being granted. Noting that such a comma does not exist, I consider there is no basis for the interpretation pressed by the applicant. That is, s.27B requires a causative relationship between the acts of availing, and knowledge of actual cessation, in order to enliven the protection provisions.
A third issue is the nature of the so-called grace period for paying renewal fees, and its interface with s.27B(7). The essence of the argument is:
·Pursuant to s.27A(1), a Design ceases to be in force at the end of its period of registration (including as extended).
·Under s.27A(13), the owner can apply for an extension before the period of registration expires – or within a period of 6 months thereafter (the so-called grace period).
·If the payment is not made, the plain interpretation of s.27A is that the Design ceased at the expiration of the term – not the grace period.
·Consequently any extension of time should run from when the term expired, not the end of the grace period.
·It follows that actions by the licence applicant in the grace period should be relevant for assessing the causative relationship between the Design ceasing and the person availing themselves of the Design. Additionally, the licence would extend to ‘infringing’ acts performed during the grace period.
The nature of the grace period is discussed in the authorative text on the Paris Convention – Guide to the application of the Paris Convention … Professor G.H.C. Bodenhausen, 1968. In the commentary on Art 5bis, Bodenhausen states:
…. This period of grace is of 6 month’s duration, unless the national legislation of the country concerned grants a longer period. During the period of grace the industrial property right concerned must be considered to remain provisionally in force. If the fee is not paid during this period, the right will lapse. National legislations are free to determine that in such case the right will lapse retroactively, namely, as from the date on which the fee was due.
In my view, the Old Act implements a grace period such that the Design is provisionally in force during the grace period – but if the fee is not paid, the Design is taken to have ceased retroactively at the end of the term of registration. Importantly, if the renewal fee is paid at the end of the grace period, there are no protection or compensation provisions for third parties, and the owner has rights that can be enforced against infringing acts that occurred during the grace period. If that fee is not paid, the infringement rights cease at the end of the term (not the end of the grace period) and the owner has no enforceable rights against infringing acts that occurred in the grace period.
To complicate the present situation, I observed at the hearing that (curiously) the requests for an extension of time under s.27B all specified the start date for the extension as being the date the term expired – and not from the end of the grace period. Nevertheless the owner paid the s.27B fees on the basis that the extension was from the end of the grace period, and the Designs Office processed the request as being for an extension from the end of the grace period – reliant on an internal form that dictated the calculation of fees on that basis. Having regard to all the circumstances (and in particular the date set under regulation 23(2) for the payment of the renewal fee), I conclude that the s.27B extensions were granted in respect of the period commencing at the end of the grace period – not the end of the term.
Importantly, the licence provisions of s.27B(7) are expressly tied to the period of the extension of time that was granted under s.27B. Consequently only activities subsequent to the end of the grace period can be taken into account to assess whether the Design has been availed because of the ceasing of the Design. That is, only activities between 16 Aug (for six Designs) or 5 Sept 2002 (the remaining Designs), and 28 April 2004.
Applicant’s basis for a licence
The application for a licence is supported by two declarations from Mr Campbell (with no other supporting declarations – apart from that by Weedon, which was only relevant to the earlier decision). In short, Mr Campbell was aware that the Designs were about to cease &/or had ceased, and he sent original parts to three different companies in Taiwan – with an expectation that those companies would tool up to copy them, such that the applicant could import those parts.
Curiously, the evidence does not include direct or sworn evidence from any of the Taiwanese companies. The declarations by Campbell make various references to agreements being made with the Taiwanese companies – but any references to associated dates are by month only. No copies of any written agreements were put forward, or produced – even though it is asserted that the expenditure incurred by the various Taiwanese companies amounted to US$675,000 [Para 26 of Campbell’s first declaration].
The opponent also served a Notice to Produce on the applicant, detailing a wide range of documents relevant to the proceedings (but the notice was nevertheless quite specific). In responding to the notice, the applicant objected to the production of a range of documents on the basis that they were not in their possession or control. Prima facie this is an appropriate response to a Notice to Produce. But also I think it is appropriate to conclude that all evidence of the applicant’s activities that might reasonably support the applicant’s case is before the Registrar.
The Evidence
As a precondition to granting a licence, it seems self-evident that I need to be satisfied that:
a.any alleged availing of the Designs occurred with the knowledge that the Designs had actually ceased [the causative relationship present in s.27B(7)];
b.the Designs in question (rather than something else) had been availed; and
c.the applicant for the licence (rather than someone else) had availed themselves of those Designs.
The burden of establishing these basic issues clearly lies with the applicant for the licence. Recognizing that some small businesses may have less-than-ideal business practices and record keeping abilities, it may be appropriate to afford some flexibility regarding the evidence required to support the case for a licence. Nevertheless, the applicant must demonstrate a credible case for the grant of a licence.
What actions were taking in knowledge that the Designs had actually ceased?
The actions of Mr Campbell commenced before any of the Designs in question had actually ceased. The following table sets out the basic chronology of events. I have limited the table to those events where the date is reasonably specific, or is otherwise supported by some material evidence. I have excluded assertions of events said to have occurred in a particular month (but otherwise undated) that have no documentary corroboration:
16 Aug 2002 Expiration of registration – Designs 131506, 131507, 131508, 131509, 131510, 131511 5 Sept 2002 Expiration of registration – Designs 131576, 131577 22 Dec 2002 Applicant conducts status search of all 8 Designs 20 Jan 2003 Received formal advice from the Applicant’s lawyers, re Grace Period [the advice is not in evidence]. 16 Feb 2003 End of grace period – Designs 131506, 131507, 131508, 131509, 131510, & 131511. [Since this date was a Sunday, the owner actually had until the end of 17 Feb to pay the fee.] 20 Feb 2003 Received further formal advice from the Applicant’s lawyers, re Grace Period [not in evidence]. 20 Feb 2003 Applicant sends 4 particular parts (asserted to correspond to Designs 131510, 131511, 131576 and 131577) to one Taiwanese company 5 March 2003 End of grace period – Designs 131576, 131577 28 July 2003 Applicant conducts status search – asserted to be of all 8 Designs. Exhibited in evidence are the computer printouts for 131509, 131577 only – but which contain handwritten notes to the effect that the ‘left-hand’ version of the two Designs were checked & not in force. [From the Designs in question, it is reasonable to infer that the handwritten notes refer to Designs 131508 and 131576 respectively] 7 Aug 2003 Further sample sent (re 20 Feb 2003 samples) (asserted to correspond to Designs 131510 and 131511) 4 Sep 2003 Applicant conducts status search for 131506 and 131507. Handwritten annotation referring to a 3-month period indicates awareness that he would have no rights if a 27B extension for less than 3 months was granted. 11 Sep 2003 Applicant sends more parts to Taiwan (asserted to correspond to Designs 131506 and 131507) 7 Oct 2003 Applicant sends more parts to Taiwan (asserted to correspond to Designs 131508 and 131509) 9 Dec 2003 Owner applies for a 27B extension of time 28 Apr 2004 Designs restored Significantly, while the evidence shows that Mr Campbell sent parts to Taiwan on 20 Feb 2003 (which was after six of the Designs had actually ceased), he necessarily did so only with an expectation that they would cease – he did not confirm that those Designs had definitely ceased prior to sending the parts to Taiwan.
The first time Mr Campbell was aware that any of the Designs had definitely ceased was on 28 July 2003. Mr Campbell asserts that on that date he searched for all Designs. However the evidence only evinces results for Designs 131508, 131509, 131576 and 131577. Given the overall lack of corroborative evidence in Mr Campbell’s declaration, I am not prepared to accept the unsupported assertion in paragraph 15 of his first declaration, that all Designs were searched on that date. Indeed, the evidence exhibits search results for Designs 131506 and 131507 conducted on 4 Sept 2003. While this evidence establishes that Mr Campbell became aware on that date that 131506 and 131507 had definitely ceased, the absence of any note about their cessation on the earlier search (at which time those Designs had in fact ceased) is indicative that the search conducted on 28 July did not cover those Designs
Consequently the relationship between the dates of Mr Campbell’s knowledge of actual cessation, and transmission of parts to Taiwan, may be summarized as follows:
Design Date when first aware the Design had actually ceased Date of the first subsequent dispatch of products 131506 4 Sept 2003 7 Oct 2003 131507 4 Sept 2003 7 Oct 2003 131508 28 July 2003 11 Sept 2003 131509 28 July 2003 11 Sept 2003 131510 Not established - 131511 Not established - 131576 28 July 2003 - 131577 28 July 2003 -
Accepting for now the validity of Mr Campbell’s linkage between the Designs and the products he sent to Taiwan, it is clear from this that his actions in sending parts to Taiwan in the knowledge that the relevant Designs had actually ceased was limited to just 4 of the 8 Designs. For the other four Designs, the highest the evidence can support is that he sent those goods with an expectation that the relevant Designs would soon cease.
It might reasonably be argued that a contingent sending of samples could be made good by way of a subsequent notification to the manufacturers that the Designs had actually ceased. However, while there are some handwritten notes alluding to the manufacture in Taiwan being contingent on the Designs ceasing, there is nothing in the evidence to indicate that Mr Campbell at any stage formally told the Taiwanese companies that the Designs had in fact ceased.
It is also relevant to note here that there is no evidence of Mr Campbell (or Pacrim) taking any material steps to themselves manufacture products bearing the Designs.
I am therefore left with the situation that there is no evidence that any actions taken to replicate the products allegedly bearing Designs 131510, 131511, 131576 and 131577 were done in the knowledge that those Designs had actually ceased.
Was the alleged availing in respect the Designs that are the subject of the licence request?
It hardly needs to be stated that I must be satisfied that the availing relied upon to support the licence application relates to the Designs in question.
The evidence shows that Mr Campbell was aware of the Designs in question. Mr Campbell also sent various parts to the Taiwanese companies, which he identifies by way of an alphanumeric string. But there is nothing in the evidence that allows me to assess any relationship between the parts sent to Taiwan, and the relevant Designs. There is nothing in evidence to show what the various parts actually looked like. All I have is assertions by Mr Campbell that the part numbers correspond to one or other of the Designs.
The strongest reason to accept Mr Campbell’s assertions is the lack of contrary assertion by Ford – to the effect that the part number identifications were not of a type used by Ford, or did not embody the relevant Designs. Indeed, the declaration from Mr Charity in support of Ford appears to accept a relevant correspondence (see, for example para 14 et seq.) – which I take to be effectively a concession that the alphanumeric strings refer to Ford parts that embody the relevant Designs. Nevertheless I am still left with the situation that I have nothing in the evidence before me from which I can assess what was actually sent to Taiwan.
This would not be an issue if there was evidence of what the Taiwanese manufacturers were actually making. However, the evidence is remarkably devoid of any detail about what those companies were tooling up to manufacture. Mr Campbell makes various assertions about agreements with those companies – but no documentary evidence of the substance of any such agreements is tendered in evidence or produced. Inevitably, the question arises as to whether the Taiwanese companies were intent on making an exact replica of the ‘original’ parts sent to them, or whether the objective was a ‘must fit’ product that perhaps had a different appearance. There is little evidence to resolve this.
The most relevant document was exhibited in Evidence in Reply. It is an extract from the ‘2004-2005 Guide Book’ of one of the Taiwanese companies. It is a page showing vehicle light fittings. Two are endorsed (in handwriting, by an unknown person) to indicate association with 2 Designs (each) –131576 & 131577, and 131510 & 131511. These are the 4 Designs for which there is no evidence that actions were taken in the knowledge that those Designs had definitely ceased. At the hearing Ford suggested that the images differed from the indicated Designs in some manner — and a close inspection indeed shows some small differences. There may be a number of associated explanations – including whether the corresponding items sent to Taiwan actually embodied the relevant Design. But the fundamental issue is whether the applicant can show that the relevant Design has been availed. And to rely on a third party printed catalogue showing small two-dimensional images of a product (additionally flagged ‘To Be Added’ – that is, not yet available) is a surprisingly inadequate way of establishing this fundamental issue.
I additionally note that there is one document in evidence (Exhibit J to Campbell’s first declaration) that suggests the existence of some form of agreement with a Taiwanese company. However:
· The document is unsigned, undated, apparently written about 12 months after the relevant events referred to in the letter, and formally addressed to IPAustralia – although to the best of my knowledge was never sent to IPAustralia except as part of the evidence in these proceedings;
· The document indicates an agreement with ‘Stephen Campbell of All Crash Parts’ – which is not the applicant for the licence. In this regard, while the earlier decision between the parties found that the licence request should be in the name of Pacrim, I don’t think those conclusions necessarily apply to this document. That is, prima facie this document does not establish an agreement involving the current licence applicant and the Taiwanese company;
· As far as I can ascertain, the document is referring to the light fittings as shown in the 2004-2005 Guide Book (as discussed in para 29 preceding). It is therefore subject to the same criticism – that there is no evidence that the agreement referred to was made in the knowledge that those Designs had definitely ceased.
In many situations a party to proceedings may experience some difficulty in obtaining clear evidence of a range of issues due to the evidence lying outside their control, or being lost through the elapse of time. In my view, an applicant for a s.27B licence inherently is the one person who knows what actions have been taken to avail the Design. And to the extent that relevant activities are ongoing (as in the present case), they should be in a position to provide evidence that clearly demonstrates those activities. However, such evidence is not provided in the current case. Rather I am being invited to infer (from the apparent concession by Ford’s declarant) that Mr Campbell sent genuine parts to Taiwan, and that those parts embodied the Design; to infer that there was an express intention that the Taiwanese manufacturers were going to replicate the products; and infer that the activities of the Taiwanese companies were in fact directed to replicating those products. Given the applicant’s contention that they had availed themselves of the Designs in question, it is remarkable (to say the least) that their evidence is so lacking in substantive evidence as to require such a chain of inference.
Has the applicant availed itself of the Design?
In the circumstances of the present case, there is a real issue of whether the applicant actually availed itself of the Design. The evidence shows that Mr Campbell had an awareness of the possibility that the Designs would cease in the near future – and subsequently that half of those Designs had actually ceased. The evidence indicates that he clearly wanted to source relevant products from a supplier other than Ford. The evidence also supports the contention that the applicant had no intention of actually manufacturing the products. Rather the approach was to source the products from an overseas manufacturer.
The requirement to ‘avail’ the Design is a broad term, not limited to actual manufacture or use. Regulation 29(2) in effect confines the scope of relevant activities to “used, or otherwise took advantage of (whether by way of contract or otherwise)…”. The fundamental question is therefore whether the applicant used, or otherwise took advantage of, the Design.
The most concrete activity of the applicant was the sending (by Mr Campbell) of relevant parts to Taiwan. The parts that Mr Campbell sent to Taiwan were apparently ‘genuine’ spare parts, presumably bought in good faith from Ford. There is nothing in the evidence to suggest that Mr Campbell did anything other than acquire the parts from the owner of the Designs. He did not himself apply the Designs to products, or manufacture products bearing the Design. He merely bought the products bearing the Design, and then exported them. I fail to see how the mere act of exporting a lawfully purchased item per se constitutes any form of availing the Design. Rather, any availing must arise from conduct associated with that export.
In the circumstances where manufacture of a product occurs overseas, the relationship between the foreign manufacturers and the person in Australia is very significant. For example, where the applicant makes arrangements for the overseas manufacture of goods embodying the Design, expressly for his use in Australia – it would be reasonable to conclude that the arrangements are such that the applicant has availed themselves of the Design. They have entered into an arrangement where they are applying the Design using a foreign manufacturer.
On the other hand, one might conceive of a situation where the applicant has a business relationship with overseas manufacturers. The applicant advises those manufacturers of a business opportunity for them in the event that the Designs cease – with the possibility/probability that if they take advantage of that opportunity, the applicant would be interested in purchasing products from them. In my view the applicant does not avail themselves of the Design in this situation until such time as they make definite arrangements for the purchase or importation of relevant products. Of course the activities of the overseas manufacturers might constitute availing (subject to a consideration of inherent jurisdictional issues). But such availing is by those manufacturers – not the person who informed them of the business opportunity.
Mr Campbell’s declarations are remarkably devoid of any evidence (other than assertion) of the arrangements between the applicant and the Taiwanese companies. Some correspondence is provided, but it is remarkably non-specific. There are asserted development costs incurred by the Taiwanese manufacturers – with the only evidence being hearsay provided by Mr Campbell. There are assertions about the annual purchase forecasts made by the Applicant to its manufacturers – but (surprisingly) no evidence provided to corroborate that assertion. Also, one might consider an exposure to reimbursement as asserted in the following:
‘the relevant manufacturers are likely to require the applicant to reimburse the tooling development and manufacturing costs and/or pay compensation for loss of profits on agreed purchasing volumes’.
would arise as a result of a contractual agreement of some form or other. But no corroborating evidence or documentation has been filed in evidence – even in a redacted form.
It is also interesting to note that the asserted expenditure ‘on the Design and manufacture of toolings for the relevant parts, together with ancillary internal costs and overheads’ by the manufacturers is US$675,000. The asserted annual minimum purchase forecast is asserted to be US$194,000. It is worth noting that the figure for manufacturing costs does not include the ongoing production cost for actually making the parts. The fact that it would take some 3½ years to recover just the tooling and associated costs is perhaps suggestive of an intention to supply persons other than the applicant for the licence. The fact that that some of the items were included in the product catalogue of one of the manufacturers lends support to the proposition that the Taiwanese manufacturers were tooling up to supply the Australian market, not the applicant per se.
All this supports the conclusion that the applicant had not availed itself of the Designs in the relevant period. From the evidence provided by the applicant, I think the highest one can describe Mr Campbell’s involvement was that he was encouraging the Taiwanese manufacturers to avail themselves of the Designs – so that in the fullness of time the applicant could (if it chose to) import relevant products.
Decision
The conclusions to be drawn from the available evidence are:
·Mr Campbell was clearly aware of a pending cessation of the Designs, and had had a desire to be able to import products from Taiwan (presumably at a lower cost);
·A causative relationship between actions associated with availing and the knowledge of cessation only exists for Designs 131506, 131507, 131508, and 131509.
·The evidence does not establish what was actually sent to Taiwan. At most, one might be able to infer Mr Campbell probably sent to Taiwan products that prima facie embodied the relevant Designs;
·The evidence fails to set out exactly what the Taiwanese companies were expected to do. At most, one might infer that the products were probably sent to Taiwan to enable the Taiwanese manufactures to tool up to replicate the products (and therefore any Designs embodied in the product);
·The evidence fails to set out what the Taiwanese companies were actually doing. At most, one might infer that the products they tooled up to manufacture might embody one of the Designs;
·There is no evidence to suggest that Mr Campbell’s role was any more than an informant advising the Taiwanese manufacturers of a business opportunity. And subsequently, that of an interested spectator encouraging the Taiwanese companies.
That is, the evidence fails to demonstrate any activity undertaken by Mr Campbell (or the applicant) that would constitute availing or use by the applicant of any of the Designs. The most that can be said is that Mr Campbell ensured the Taiwanese manufacturers were availing themselves of the Design (if indeed that was the case).
A person who was truly availing themselves of a Design ought to have ready access to evidence that demonstrates their availing. Near the end of the hearing, the applicant requested an opportunity to provide more evidence – in particular, concerning the items actually sent to Taiwan, and evidence from the Taiwanese companies. However they also indicated that the items did not exist in Australia, and they would need to contact the Taiwanese companies. If the applicant’s case had a specific deficiency, and it was apparent that relevant evidence existed which would overcome that deficiency, it would likely be appropriate to grant leave for that evidence to be submitted. But that is not the case here. The applicant has failed to establish virtually all the prerequisites for granting a licence. To be successful, any further evidence would need to provide an entire new evidentiary justification for a licence. The extent of the deficiencies in the applicant’s case is so great that I do not believe it is appropriate to deal with them by way of further evidence. Rather, if justification for a licence does exist, the applicant [or some other person claiming entitlement to a licence under s.27B(7)] has the option of filing a new request for a licence – noting of course that Ford believes that such a course is not available under the transitional provisions of the Designs Act 2003.
Accordingly, and despite the applicant being aware of the impending cessation of the Designs, and in spite of the applicant apparently obtaining legal advice in relation to the cessation, I can only conclude that the applicant has failed to demonstrate that it availed itself of any of the Designs. Additionally, even if the applicant could demonstrate that it had availed itself of the Designs, it has failed to establish the required causative relationship for that availing and cessation, for Designs 131510, 131511, 131576 and 131577. Accordingly I refuse the requests for a licence under s.27B(7) for each of Designs 131506, 131507, 131508, 131509, 131510, 131511, 131576, 131577.
Licence conditions
There remains the possibility that either Pacrim, or another person associated with the present application, might make a fresh application for a licence. I note that Ford asserts that this is not now possible (contrary to the earlier decision between the parties). In the circumstances I think it is appropriate to make the following brief observations:
a.Ford has requested, in the event that I decide to grant a licence, the imposition of a number of terms. To the extent that they seek to rely on the fact that the period of cessation was of a limited period, that the cessation was accidental, and that there is an ongoing market for the relevant products – I think their request is misconceived. If a Design owner allows their Design to cease, third parties have every right to be able to use the Design. S.27B of the Act provides a remedy for unintentional ceasing of a Design. But (and as I discussed in HRC Project Design v Orford (1997) 38 IPR 121 at page 127), the restoration is not a full restoration of the rights. The owner has had full and complete recognition of the circumstances surrounding the cessation through the fact that the Designs were restored. It is quite inappropriate to impose the consequences of their errors onto 3rd parties who have in good faith made use of the Design as a result of those errors.
b.Ford also argues that I should give consideration to the fact that the licence applicant did not oppose their application for an extension of time. Again this submission is ill-conceived. An opposition to the extension of time should only be prosecuted if a party has good reason to believe that the conditions for the grant of an extension of time have not been met. If the third party has no such belief, they should not oppose [see, for example Max-Planck-Gesellschaft Zur Forderung Der Wissenschaften E.V. and Regeneron Pharmaceuticals, Inc v Amgen, Inc [1997] APO 69]. Importantly the protection and compensation provisions are not predicated on whether or not the extension of time should have been granted. Rather, they are predicated on the fact that an extension has been properly granted – with a consequential need to protect persons who took advantage of the cessation. Accordingly the absence of any opposition to the extension of time is per se irrelevant to the terms of any licence that might be granted under s.27B(7).
c.Lastly, Ford raises the issues of delay in prosecuting the Licence application. One of the issues is that, despite the express language of regulation 29(4), a copy of the licence application was not given by the applicant to Ford for a period of some 12 months. The delay was compounded by the apparent misplacement of the files within the Designs Office. However I think any disadvantage caused by the delay falls primarily with the licencee – in the event of a licence being granted, they will have a reduced period in which they can confidently use the Design. I fail to see any disadvantage to Ford that would merit some relevant condition on any licence granted.
Costs
The matter of costs was not dealt with at the hearing. There is also the question of costs for the earlier hearing, which was deferred to this matter. Accordingly I invite submissions from the parties within 1 month of the date of this decision as to why I should award costs on a basis different to:
·Costs in the present hearing – against the licence applicant (Pacrim)
·Costs for the previous hearing – no award of costs.
D Herald
Deputy Registrar of Designs6 August 2007
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