Skedeleski, D. & Arakawa, E. v Underwood, P.J. & C

Re: DAVID SKEDELESKI and ERIC ARAKAWA
And: PERRY JOHN UNDERWOOD and CHRISTINE UNDERWOOD
No. V G380 of 1988
FED No. 77
Intellectual Property - Patents

COURT

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
Lockhart J.(1)

CATCHWORDS

Intellectual Property - Infringement of a registered industrial design - whether registered design invalid on the ground that at the relevant date it was not a new or original design - meaning of "new or original design" - whether s. 17A Designs Act 1906 (Cth) applies to validate the registered design despite the absence of newness and originality.

Patents - Misleading and deceptive conduct - whether a statement alleging a product is the subject of a registered patent contravenes ss. 42 or 44 of the Fair Trading Act 1987 (N.S.W.) or is an offence under s. 174 of the Patents Act 1952 (Cth).

Designs Act 1906 (Cth): sub-ss. 17(1), 17A(1)

Copyright Act 1968 (Cth): ss. 74-77

Fair Trading Act 1987 (N.S.W.): ss. 42, 44

Patents Act 1952 (Cth): s. 174

HEARING

SYDNEY

#DATE 12:3:1990

Counsel for the Applicants: Mr. J.J. Garnsey Q.C.

Mr. C. Adamson

Solicitors for the Applicants: Gillis Delaney

Counsel for the Respondents: Mr. D.K. Catterns

Solicitors for the Respondents: Freehill Hollingdale & Page

ORDER

The respondents bring in short minutes to give effect to these reasons for judgment.

The minutes shall include an undertaking by the respondents to permanently refrain from making any representation that the Pro-Surf Protecta tip comes within the claim of the petty patent.

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

JUDGE1

Introduction and Facts

This is a proceeding for infringement of a registered industrial design in respect of a protective tip for surfboards. The protective tip is designed to protect surfers from the worst effects of unwelcome encounters in the surf with errant surfboards and to protect surfboards themselves and their riders. The applicants also claim that the respondents are engaging in misleading and deceptive conduct by stating, it is alleged falsely, on packaging in which their protective tips are sold that they are the subject of a registered patent in Australia, thereby contravening ss. 42 and 44 of the Fair Trading Act 1987 (NSW) and s. 174 of the Patents Act 1952 (Cth).

The respondents deny these assertions and cross-claim for an order for rectification of the Register of Designs and expungement of the applicants' registered design on the ground that it is invalid since at the relevant date it was not new or original or differed only in immaterial features or in features commonly used in the relevant trade from a design that, before the relevant date, was published or used in Australia in respect of the protective tip. It is agreed that the relevant date is the Convention priority date, namely, 15 September 1986.
I shall state my findings of fact, about which there is no serious dispute. The first applicant, David Skedeleski, and the first respondent, Perry Underwood, have for many years been keen surfers and interested in the safety of surfboards. It is interesting and significant that the two men did not know each other and each worked independently of the other (in the case of Mr. Skedeleski with the assistance of the second applicant, Eric Arakawa) to produce a prototype of a protective tip for surfboards in the period 1985-1986. The design of each protective tip is substantially the same. Some narrative of the facts is necessary to show how these two independent developments occurred.
Turning first to the design of the applicants' product. Mr. Skedeleski has conducted a business in Hawaii involving expertise in mould design, plastics, manufacturing and marketing. Mr. Arakawa is a leading surfboard shaper and has developed a well known line of surfboards called "Island Classics".
Surfboards are typically shaped with pointed nose tips for aesthetic and, to a lesser extent, functional reasons. They have an outer layer of fibreglass with very hard nose tips which are dangerous, especially when propelled at high speed on waves. Surfboard manufacturers have attempted sometimes to minimise the danger by rounding off the pointed nose but because of the hardness of the fibreglass this has not significantly reduced the number of injuries in the surf.
On about 28 August 1985 Mr. Skedeleski and Mr. Arakawa discussed the problem of an increasing number of injuries to surfers caused by the sharp and pointed nose tips of surfboards. They worked together to solve or at least alleviate the problem of injuries to surfers. They drew sketches of possible shapes and configurations and evaluated materials which might be used to produce a protective tip for surfboards. They arrived at a "V" shape in a silicone material. Mr. Arakawa made the first prototype in about November 1985 by applying layers of silicone glue to the tip of a surfboard, allowing it to cure, then shaping the blob of silicone, using a high speed sander, a razor blade and scissors. This first prototype was followed by further experimentation. One design difficulty which he and Mr. Skedeleski faced was that surfboard producers shaped their boards differently, some shaped the tip narrowly and thinly whilst others shaped it wider and thicker. They sought to produce a product which could cope with the wide range of shapes of nose tips. They evaluated and tested numerous theories and designs and eventually arrived at a simple solution, namely, the adding of a slit to the top and bottom centre of the "V" sections, thus allowing the product to expand or contract without distorting.
By about March or early April 1986 the applicants had developed a prototype which was satisfactory to them. This prototype appears to be substantially the same as the product now being produced in accordance with the registered design. The design was registered as from 27 August 1977 in respect of a "Surfboard Protective Tip" and the applicants are the registered owners of the design. The protective tip produced in accordance with the applicants' registered design is known as the "Nose Guard" tip. In about November 1986 manufacture of the Nose Guard tip commenced in the United States of America where it gained a considerable amount of publicity amongst the surfing community both in Hawaii and mainland America. The Nose Guard became known to some Australians, particularly professional surfers, from December 1986 onwards. In addition to its use on surfboard the Nose Guard is also used on windsurfers.
In early 1987 the applicants formed SurfCo. of Hawaii Inc. ("SurfCo") to co-ordinate the manufacture, marketing and distribution of Nose Guard tips worldwide. Nose Guard tips have been sold in various countries throughout the world including Australia.
On 8 February 1987 an agreement in writing was made between SurfCo. and a firm known as Bartlyn Enterprises for the distribution of Nose Guard tips in Australia. Bartlyn Enterprises distributes and sells these tips together with accessories to surfing shops and other outlets in most of the States of Australia. It has been very popular with both professional and amateur surfers. The first shipment of Nose Guard tips was sent by SurfCo. to Bartlyn Enterprises in Australia pursuant to the distribution agreement soon after it was executed.
I turn to the respondents' product, the "Pro-Surf Protecta" tip. Mr. Underwood is self employed full time in the development and manufacture of surf accessories including the Pro-Surf Protecta tip. He has always been a handyman and until a few years ago was a roof plumber by trade. He has enjoyed surfing for many years and in 1983 it occurred to him that it would be useful to cover the pointed noses of surfboards with a rubber tip to alleviate injuries to surfers resulting from the pointed noses of surfboards. He commenced experimenting with the design of tips for the ends of surfboards in 1983 and spent several months in this process.
In January 1985 Mr. Underwood applied to have an invention patented in Australia and on 20 June 1985 was granted a petty patent which has been subsequently renewed and is still in force. The title of the invention is "Nose Cushion and Protector for Surfing Craft". I shall refer later to the petty patent specification (No. 544182) and to the Claim (there is only one Claim) that is made defining the invention.
Underwood continued his experiments with the shape of surfboard tips. Toward the end of 1985 a considerable debate occurred within the surfing industry concerning the shape of the noses of surfboard tips. Many people said that the pointed noses which had been shaped on surfboards for many years were dangerous and should be prohibited and that all surfboards should have round noses. Mr. Underwood was concerned that the tips with which he had then been experimenting would become obsolete as they had been designed to fit pointed nosed and not round nosed surfboards. However, as he had already put a considerable amount of time and effort into the earlier shape and to capitalise on what he thought would be a sizeable market for pointed nosed surfboards he decided to produce tips to cater for sharp nosed boards. He took steps in January 1986 to manufacture such tips including the production for him of a mould which cost him some $4,800. He commenced manufacture of surfboard tips made from this mould, but found that the rubber tips which were produced from it were not satisfactory.
Meanwhile throughout 1985 Mr. Underwood continued developing and refining the shape of surfboard tips with the idea of producing a second kind of tip for round nosed surfboards. He made a number of models for this purpose which I need not describe. The earlier protective tips which he had designed for sharp nosed surfboards had a convex rear edge, but his design for boards with a rounder nose progressed towards a shape which had a concave rear edge resembling a bird in flight or a boomerang. He produced prototype tips of this kind during 1985 whilst he lived at Port Macquarie and after he moved in mid 1986 to Lake Cathie, near Port Macquarie. One of Mr. Underwood's friends was a Mr. Michael Paley who, before mid 1986, saw a number of the surfboard tips produced by Mr. Underwood including tips which are substantially the same as, if not virtually identical to, those presently being produced by him as the Pro-Surf Protecta tips. It was not only Mr. Paley who saw these tips; other friends and visitors also saw them. Sometimes Mr. Paley helped Mr. Underwood with their production. Another of Mr. Underwood's friends was Mr. Graham Huddleston who often visited him in his house at Port Macquarie before he moved in mid 1986 to Lake Cathie. Indeed, he asked Mr. Huddleston, who was experienced in making surfboards, to make two model surfboard noses, one with a round nose and one with a pointed nose so that he could experiment with fitting the tips on to the ends of the models. Mr. Huddleston made the tips for Mr. Underwood over the Christmas-New Year period of 1985/1986.
Throughout 1985 Mr. Underwood frequently visited a surf shop at Port Macquarie called Innervision Surf Centre, a business run by the Bolton family. As Mr. Underwood continued to refine the shape of the surfboard tips he took model and prototype tips which he had made to Innervision so that he could try them on the ends of various boards for size and aesthetic appeal. He did this during normal trading hours and customers at the shop often saw him trying the tips on the ends of the surfboards and asked him questions about them. He frequently discussed the tips with the Boltons and their customers, especially the aesthetic considerations, and always received a very positive response to the tips from customers.
Mr. Underwood also took some prototype tips, of the kind with which this case is concerned, in mid to late 1985 to the Paradise Surf Centre, another surf shop in Port Macquarie conducted by a Mr. Semiticolous and his sister. Mr. Underwood showed the tips to Mr. Semiticolous and tried them on different surfboards in the Paradise Surf Centre during normal business hours when there were customers there. The prototypes shown by Mr. Underwood to Mr. Semiticolous were substantially the same as the Pro-Surf Protecta tip.
In October 1985 Mr. Underwood decided to have a mould made for him which would produce a tip of better quality than the one which he was capable of producing with the plaster of paris moulds which he was making at his home. He asked Mr. Alfred Tadich who lived near Port Macquarie to produce a mould for him. Mr. Tadich produced a mould out of fibreglass from a resin sample of the tip shape which had been given to him by Mr. Underwood. Mr. Tadich handed this mould to Mr. Underwood in November 1985. Mr. Underwood then commenced to manufacture tips from the Tadich mould. He showed the tips produced from the Tadich mould to Mr. Paley and Mr. Huddleston when they visited his house in Port Macquarie and to a friend of his, Mr. Allan Wilkes, who stayed with Mr. Underwood and his wife in December 1985. Some problems developed with the Tadich mould so Mr. Underwood took some plaster moulds off it so that he could produce better quality tips.
In November 1985 Mr. Underwood took tips which he had made from the Tadich mould to Innervision to try on different surfboards there and showed the tips to the Bolton family. Mr. Robert Reginald Bolton, who is the co-owner together with his wife of Innervision, told him that he thought the tip looked the best of all the tips which he had produced and that it looked like a finished product. Customers in the shop saw the tips when Mr. Underwood tried them on the different boards there and asked him questions about them. Mr. Underwood also took some tips which he had made from the Tadich mould to the Paradise Surf Centre in November or December 1985 where he tried them on boards in stock there and showed them to Mr. Semiticolous.
In early 1986 Mr. John Bolton, a friend of Mr. Underwood and a member of the Bolton family which conducted Innervision, told him that he intended to travel to Bali. In March 1986 Mr. Underwood took an ice-cream container filled with a dozen or more prototype tips, including at least half a dozen which he had made from the Tadich mould, to the home of the Boltons. Mr. John Bolton visited Bali in April 1986. Later Mr. John Bolton told Mr. Underwood that he had used three tips on the three surfboards which he had taken to Bali and that one of them was a tip which had been produced from the Tadich mould. Mr. Bolton also placed the remaining four or five of the tips from the Tadich mould on second-hand surfboards which were on display for sale at Innervision and sold them with the boards. Many people commented favourably to Mr. John Bolton about the tips. The tips were used by Mr. John Bolton and his father, Mr. Robert Bolton, as a selling point for the second-hand surfboards which were sold from their shop Innervision and they agreed to make no charge for the tips additional to the price of the surfboards to which they were fixed. They also pointed out to prospective buyers that the tips were a very good safety feature. Many parents bought surfboards for their children on the basis of the safety of the tips. All the boards with the tips on them (about twelve boards of which five or six had tips substantially the same as what later became the Pro-Surf Protecta tip) were sold by the middle of 1986.
Towards the end of 1986 and in early 1987 Mr. Underwood approached several Australian companies about having a better mould made for the protective tips, but he found their quotations were too expensive. Mr. Underwood had not taken steps earlier to find a better mould because he could not afford it. In May 1987 Mr. Underwood went to Hong Kong with his wife and there arranged for a mould to be made at a price which he could afford and he gave the manufacturer five or six model tips which he had taken out of the Tadich mould, some in resin and some in rubber. The manufacturer used these tips and produced a mould which is the mould which Mr. Underwood began to use and still is using today in the manufacture of the Pro-Surf Protecta tips.
The tips produced from the Tadich mould after November 1985 onwards are substantially identical to the tips which are now produced from the mould manufactured in Hong Kong.
The Pro-Surf Protecta tips sold by or on behalf of Mr. Underwood were contained in packaging marked "Protecta Tip" which until late last year bore on its face a reference "PAT No 544182". This reference was subsequently deleted from the packaging or in some cases blanked out following legal advice received by Mr. Underwood that this course should be followed pending the resolution of this proceeding.
Counsel for Mr. and Mrs. Underwood informed the Court that, if the Court should hold that they are not entitled to use "PAT No. 544182" on the packaging or otherwise with respect to the sale or marketing of the Pro-Surf Protecta tips, they will undertake to the Court never to engage in this conduct.
The Registered Design and the Design of the Pro-Surf Protecta Tip
There was no dispute between the parties that the registered design and the Pro-Surf Protecta tip are substantially the same and that, if all other things were equal, there would be an infringement by the respondents of the registered design. The central argument of the respondents was that the registered design is not new or original and that any differences between it and the design of the Pro-Surf Protecta tip are either only in immaterial details or in features commonly used in the relevant trade before 15 September 1986. The absence of dispute on this question is doubtless due to the stance adopted by the applicants that the respondents are infringing their registered design and by the respondents that the registered design is not new or original. Notwithstanding this coincidence of adversarial position I shall state my findings on the question. It is necessary to do so both to resolve some of the issues and because unholy alliances are intrinsically mercurial.
The design shown in the registered design depicts a V-shaped plan with its outside resembling a triangle but ending in a curved tip and its inside resembling a more oval shape, though akin to a triangle, with a gently rounded tip having an acute V-shaped section at the tip. The design conveys a strong impression of flight and speed. The V-shape pervades the design and is reminiscent of the wings of a bird or aeroplane. The design is aesthetically pleasing. The most important characteristic of the design is its shape and in particular the shape of the inner and outer V shapes. The V notch in the internal plan shape suggests some split in the form of the internal dimension. The Nose Guard product differs from the registered plan in certain respects, none of which strike me as being material and they demonstrate that the product is clearly identifiable as having arisen from the registered design. Reproduced below is the representation of the registered design as entered in the Register of Designs.
The design of the Pro-Surf Protecta tip and the resigered design are very similar, but there are some differences of detail. The inside shape of the Pro-Surf Protecta tip is less oval than in the registered design and there is no V notch. There are other differences which may be observed on very close analysis and reflection which are referred to in a report from Mr. John Redmond, an expert witness called by the applicants. Mr. Redmond is a consultant industrial designer. I found that his description of the two designs and of the Pro-Surf Protecta tip itself coincided generally with my own visual impressions; though, doubtless because of his expertise in this field, he perceived some finer differences between the two designs than occurred to me at that time and now. The differences between the registered design and the Pro-Surf Protecta tip are minor, the principal difference being the presence of the V notch in the registered design and its absence in the Pro-Surf Protecta tip; but, like Mr. Redmond, I do not regard this difference as material.

Mr. Redmond's report concludes as follows:

"In terms of the overall gestalt of the design shown in the Registration the Pro Surf product is very similar, despite the previously mentioned differences of detail, such that both Registration and the Pro Surf product would have a similar appeal to the eye.

SIMILARITIES AND DIFFERENCES BETWEEN THE 'PRO SURF PROJECTA (sic) TIP' PRODUCT AND THE 'NOSE GUARD' SAMPLE PRODUCT SAID TO BE MADE TO DESIGN REGISTRATION 97713

The two products are closely similar in terms of overall design, with only the following differences of detail:

The inside rear shape seen in the plan view is different, having different radii and the radii meeting at a point whereas on the Nose Guard the radii lead to the commencement of an acute V extension of the inner shape.

The Pro Surf and Nose Guard products are closely similar and despite the abovementioned difference have a similar appeal to the eye."

I agree with these views of Mr. Redmond.
Whether the Registered Design was New or Original
I turn to the question whether the registered design was new or original on 15 September 1986 which, as mentioned earlier, is the Convention priority date.
Sub-section 17(1) of the Designs Act 1906 (Cth) ("the Act") is the critical statutory provision involved in this question. Section 17 provides as follows:

"17(1) Subject to this Act, a design shall not be registered unless it is a new or original design and, in particular, shall not be registered in respect of an article if the design -

(a) differs only in immaterial details or in features commonly used in the relevant trade from a design that, before the priority date in respect of the application for registration, was registered, published or used in Australia in respect of the same article; or

(b) is an obvious adaptation of a design that, before the priority date in respect of the application for registration, was registered, published or used in Australia in respect of any other article.

(1A) For the purposes of sub-section (1), account shall not be taken of any secret use.

(2) The regulations may make provision for the exclusion from registration under this Act of designs for such articles, being articles that are primarily literary or artistic in character, as are specified in the regulations."

The general principles applicable to infringement of copyright in a registered design are referred to in Firmagroup Australia Pty. Limited v Byrne & Davids Doors (Vic) Pty. Limited, in the Federal Court (1986) 11 FCR 415 at 423-429 and on appeal to the High Court (1987) 73 ALR 321 at 323-324; also in Dart Industries Inc. v Decor Corporation Pty. Limited (1989) AIPC 90-569.
For a design to be capable of registration it must be "a new or original design" (sub-s. 17(1)). In Dover Limited v Nurnberger Celluloidwaren Fabrik Gebruder Wolff (1910) 2 Ch 25 Buckley L.J. said at 28-9:

"If the design be new it may be registered under that expression, but the Act by s. 49 seems to contemplate that it may be registered even if it be not new provided that it be original. The explanation of this lies possibly in the fact that the novelty may consist not in the idea itself, but in the way in which the idea is to be rendered applicable to some special subject-matter. The word 'original' contemplates that the person has originated some thing, that by the exercise of intellectual activity he has started an idea which had not occurred to any one before, that a particular pattern or shape or ornament may be rendered applicable to the particular article to which he suggests that it shall be applied. If that state of things be satisfied, then the design will be original although the actual picture or shape or whatever it is which is being considered is old in the sense that it has existed with reference to another article before."

It is also useful to remember that

"in order to amount to infringement because of the nature of the thing protected a closer resemblance, a greater imitation, or a more faithful reproduction of the design is necessary than might be the case under trademark or patent law"

per Dixon J. in Macrae Knitting Mills Limited v Lowes Limited (1936) 55 CLR 725 at 730 thus summarising what was said by Lord Halsbury in Gramophone Co. Limited v Magazine Holder Co. (1911) 28 RPC at 226.

It is not clear from the decided cases what distinction, if any, exists between the words "new" and "original". The word "or" suggests a disjunctive meaning so that it is sufficient if the design be either new or original. As to this question see the Dover Case per Buckely L.J. at 28-30; Aspro-Nicholas Limited's Design Application (1974) RPC 645 per Graham J. at 652; Carr's Design Application (1973) RPC 689 and Stenor Limited v Whitesides (Clitheroe) Limited (1947) 65 RPC 1 per Lord Simonds at 11. It is not necessary for this question to be decided in this case because I am satisfied that the registered design of the applicants is neither new nor original, if there be a difference between the two concepts. It must be remembered, of course, that the relevant test in design infringement cases is to compare the registered design with the design of the respondent's article to which it is alleged the registered design was applied.
The following passage from the judgment of Fletcher-Moulton L.J. in Simmons v Mathieson & Co. Limited (1911) 28 RPC 486 at 489 is apt in the present case:

"It was never intended that persons in their trade, in which they are not only justified in using but bound to use the skill, which they have acquired during years of practice, in making variations of the shape of the articles they produce, should be harassed by persons claiming a monopoly in designs if those are really matters that are open to the public. You must have something new before the law will allow you to get any monopoly at all."

See also J. Rapee & Co. Pty. Limited v Kas Cushions Pty. Limited (1989) AIPC 90-626 at 39,392-39,397.
Mr. Underwood developed his protective tip in essence in two streams, though the two did overlap to a degree: first, the tip for a sharp nosed surfboard and, second, the tip for a board with a rounder nose. It is the latter with which this case is primarily concerned. The tip produced for a round nosed board was the one with which Mr. Underwood was experimenting shortly before the Tadich mould was produced in late 1985 and that tip is substantially the same as the Pro-Surf Protecta tip which is currently produced. I do not have to decide whether the tip produced for the sharp nosed board and the tip for the round nosed board are the same or substantially the same because the tips produced for round nosed boards from the Tadich mould and latterly from the mould made in Hong Kong and known as the Pro-Surf Protecta tip are the same as each other in all material respects and each is the same in all material respects as the registered design.
The inventive efforts of Mr. Underwood, his showing of his designs of tips for surfboards and the tips themselves to friends and the observance of the tips by members of the public in shops in Port Macquarie, the sale of some second hand surfboards bearing tips which later became the Pro-Surf Protecta tips, and the other evidence to which I have referred establishes plainly to my mind that the applicants' design, when considered at the priority date, was not a new or original exercise in intellectual activity. Substantially the same exercise had been previously undertaken by Mr. Underwood producing substantially the same result to the same subject matter. Indeed, the evidence leads me to conclude that it was Mr. Underwood who first conceived the design which later emerged as the Pro-Surf Protecta tip and that his efforts preceded those of the applicants whose registered design was later in conception and substantially the same as the registered design.
It is true that the publication and use was not widespread and that the tip in question was a prototype. But the tip has not changed in any material respect from shortly before the production of the Tadich mould until the present time, when use was made of the Tadich mould and the mould made in Hong Kong. Large numbers of people may not have seen Mr. Underwood's surfboard tips, but a number of persons purchased secondhand surfboards which had the tips on them and other persons, including customers, saw them in two surfboard shops in Port Macquarie. It should not be forgotten that Australia is one of the major surfing nations of the world and that the east coast of Australia including the mid north coast of New South Wales near Port Macquarie are well known surfing areas. Mr. Underwood's design for the protective tip for round nosed surfboards was published and used in Australia before the priority date.
It follows in my view that the registered design is not new or original. Also, any differences between the two designs are only in immaterial details (para. 17(1)(a) of the Act).
It is not necessary to decide whether the differences between the registered design and the design of Mr. Underwood's surfboard tip which culminated in the Pro-Surf Protecta tip are in features commonly used in the relevant trade.
The applicants' case is that the respondents applied the registered design to the Pro-Surf Protecta tip; they do not assert a case of fraudulent or obvious imitation of the registered design. Nevertheless I shall say something about one aspect of the evidence not previously mentioned. In an affidavit of Mr. Dirk Cooke, filed on behalf of the applicants (Mr. Cooke is the manager of Bartlyn Enterprises) Mr. Cooke deposed to a conversation which he had with a Mr. Adam Watson in 1987, whome he says he "knew to be a sales representative for Perry Underwood", in which Mr. Watson is alleged to have said that Mr. Underwood told him "that we are going to change our design from a cone shape to a more Nose Guard shape". Mr. Underwood gave evidence by affidavit and orally. He said in oral evidence that he had never met Mr. Adam Watson and that he thought he was one of the distributors who telephoned him in the early stages and asked him if he could be the agent for his product; but he never was in fact his agent at all. I accept Mr. Underwood's evidence. I am satisfied that whatever may have been said by Mr. Watson to Mr. Cooke, was said without the knowledge or authority of Mr. Underwood. I am not satisfied that Mr. Underwood told Mr. Watson that "we are going to change our design from a cone shape to a more Nose Guard shape".
Sub-section 17A(1)
There is more than one exception to the requirements of sub-s. 17(1) that a design shall not be registered unless it is a new or original design, one being in respect of secret use which shall not be taken into account for the purposes of sub-s. 17(1): see sub-s. 17(1A). Another exception arises from s. 17A which provides that certain designs therein mentioned are not to be treated as other than new or original. Section 17A was inserted in the Act in 1968 by Act No. 64 of 1968, s. 6. Section 17A provides as follows:-

"17A(1) Where -

(a) copyright under the Copyright Act 1968 subsists in an artistic work; and

(b) an application is made by, or with the consent of, the owner of that copyright for the registration of a corresponding design, that design shall not be treated for the purposes of this Act as being other than new or original, or as having been published, by reason only of any use previously made of the artistic work unless -

(c) the previous use consisted of or included the sale, letting for hire or offering or exposing for sale or hire of articles to which the design had been applied industrially, other than articles specified in regulations made for the purposes of sub-section 17(2); and

(d) the previous use was made by, or with the consent of, the owner of the copyright in the artistic work.

(2) Any regulations in force under the Copyright Act 1968 that make provision for determining the circumstances in which a design is, for the purposes of section 77 of that Act, to be deemed to be applied industrially have effect for the purposes of sub-section (1)."

Section 17A limits the operation of s. 17 in cases where there has been previous use made of an artistic work from which a corresponding design is derived. Section 17A complements s. 77 of the Copyright Act 1968 so that, in substance, a corresponding design continues to be registerable under the Act until the artistic work from which the design was derived ceases to have protection under the Copyright Act.
The Copyright Act contains provisions (ss. 74-77) which are concerned with the relationship between copyright protection and design protection. The expression "corresponding design" when used in the Act in relation to an artistic work has the same meaning as in Division 8 of Part III of the Copyright Act (see sub-s. 4(1) of the Act for the definition of "corresponding design"), namely, a design that when applied to an article results in a reproduction of that work (Copyright Act sub-s. 74(1)). For the purposes of the Copyright Act "reproductions" of an artistic work include reproductions of works in different dimensions. In the case of an artistic work in two dimensions, for example a painting, it may be reproduced in three dimensions by the application of a corresponding design to an article where that design consists of features of shape or ornamentation which are depicted in the painting.
The Designs Law Review Committee (the Franki Committee) in its Report on the Law Relating to Designs, February 1973, said of s. 17A, amongst other things, the following:

"73. Section 17A is designed to ensure that a corresponding design is not treated as being other than new or original by reason only of the previous use made of the artistic work unless that use consisted, in effect, of an industrialisation of the design by the owner of the copyright in the artistic work or with his consent. ...

74. Nevertheless, section 17A appears to be necessary in order to ensure the availability of design protection to corresponding designs. We recommend, therefore, that the section be retained. ..."

The fundamental problem that confronts the applicants in this case with respect to s. 17A is that, were it not for that provision, s. 17 would operate to invalidate the design because it was not a new or original design at the protection date since it was preceded by the publication and use by Mr. Underwood of his protective tip for round nosed surfboards. The evidence does not establish, nor was it suggested, that the respondents made any use whatever of any artistic work of the applicants from which the registered design was derived. Mr. Underwood's design of his product was independent of any artistic work of the applicants. I should say that the evidence is not at all clear as to the identification of the artistic work on which the applicants rely on this branch of their case. Section 17A therefore affords no comfort to the applicants. In view of this finding it is not necessary to consider whether paragraphs (c) or (d) of sub-s. 17A(1) apply.
It was submitted by counsel for the applicants that s. 17A is not limited to prior use of the artistic work by the registered proprietor or applicant for registration of the artistic work in the registered design. It is not necessary to decide this question. The critical point in this case is that any relevant prior use of the artistic work must be use which saves the consequence of invalidity that would otherwise follow from the operation of sub-s. 17(1) on the ground that the design is not new or original. In this case absence of newness or originality results from the development and exposure of Mr. Underwood's tip for round nosed surfboards before the priority date, a use which did not involve any use of any artistic work of the applicants. Paragraph 17A does not therefore avail the applicants in this case.
It follows that the registered design is not valid, that the cross claim succeeds and that the Register of Designs should be rectified by the expungement of Registered Design No. 97713.
Misleading or Deceptive Conduct
I turn now to the contention by the applicants that the statement on earlier packaging of the Pro-Surf Protecta tip "PAT No. 544182" constituted misleading or deceptive conduct in contravention of s. 42 of the Fair Trading Act or false or misleading representations concerning the existence of a right and a remedy in contravention of s. 44 of that Act or an offence under s. 174 of the Patents Act. It was not suggested that any of these alleged contraventions raised separate considerations from any other; and it was common ground for the purposes of this proceeding that it was sufficient to consider the alleged contravention of s. 42 of the Fair Trading Act.
The applicants' Petty patent (No. 544182) contains one Claim which defines the invention in these terms:

"1. A protector for fitting to a sharply-pointed nose of a surfcraft, comprising a cup-like member made of an elastically-yieldable, resilient, cushioning material which, in a relaxed state, provides a conical socket of oval cross-section, and which is used by being stretch-fitted over the nose of the surfcraft so that it grips it tightly and provides ahead of the nose a cushion to reduce the risk of injury to a swimmer struck by the surfcraft."

The Claim is for an invention with a number of essential features including the protector which is used by being stretch-fitted over the nose of the surfcraft so that it grips it tightly and provides ahead of the nose a cushion to reduce the risk of injury to a swimmer struck by the surfcraft. In my opinion it is plain from the Claim that the stretch-fitting of the conical socket of oval cross-section is what attaches the protector to the surfcraft. This is an essential component of the scope of the invention for which the Claim is made.
It is plain from the packaging of the Pro-Surf Protecta tip that it is not to be stretched when fitted over the nose of the surfcraft; that the tip is to be slid on firmly after adhesive has been applied; and that if it is pushed on too far it will bulge on the sides. The statements on the packaging are contrary to the claim in the Patent.
The statement in the earlier packaging of the Pro-Surf Protecta tip "PAT. No. 544182" was a representation that the Pro-Surf Protecta tip being sold in the package was patented in Australia, or perhaps the subject of an application for a patent in Australia, and that it was manufactured in accordance with and embodied the invention claimed in the patent. In my opinion those claims were inaccurate and constituted misleading conduct within the meaning of s. 42 of the Fair Trading Act.
As the respondents through their counsel have offered an undertaking to the Court that they will permanently refrain from making any representation that the Pro-Surf Protecta tip comes within the Claim of the petty patent and as they have discontinued the use of the offending packaging it is in my view an appropriate case to accept the undertaking and not grant an injunction.
Conclusion

In summary, the applicants fail in their case of alleged infringement of their registered design; the respondents succeed in their defence and cross-claim that the registered design of the applicants is invalid; and the applicants succeed in their case that the respondents have engaged in misleading conduct.
As to costs, most of the evidence and time spent in the case was devoted to the issues under the Act. The interests of justice are best served by ordering the applicants to pay to the respondents one-half of their costs of the proceeding.
I direct the respondents to bring in short minutes to give effect to these reasons, the minutes to include the undertaking which must be formally offered in Court by or on behalf of the respondents.

[1990] FCA 77

12 MARCH 1990