TV Innovations Pty Ltd v Global Shop Direct Pty Ltd - [2022] ADO 2

DESIGNS ACT 2003

DECISION OF A DELEGATE OF THE REGISTRAR OF DESIGNS WITH REASONS

Re:Request by TV Innovations Pty Ltd to revoke registration of design number 201717503 in the name of Global Shop Direct Pty Ltd

Delegate:	Louise Tuohy
Representation:	Opponent: David Larish of Counsel instructed by Benjamin Lawyers Applicant: One IP International Pty Ltd
Decision:	2022 ADO 2 Designs Act 2003 (Cth) – application for revocation under section 51 – insufficient evidence that a person other than the registered owner was an entitled person in relation to Australian design number 201717503 – registration of design not revoked

Background

This decision concerns a request for revocation of Australian design number 201717503 (‘Design’) on grounds relating to entitled persons under s 51 of the Designs Act 2003 (Cth) (‘Act’).
The Design was filed on 7 December 2017 and registered on 3 January 2018. Reproduced below are the relevant details:
Design Number:       201717503
Current Owner:       Global Shop Direct Pty Ltd (‘Current Owner’)
Previous Owner:      E. Mishan & Sons, Inc. (‘Previous Owner’)
           Designer:                  Fred Hollinger
           Product Name:         Smokeless Grill
           Representations:[1]
Convention details:   Number:         29/608781
  Date:             16 June 2017 (‘Priority Date’)
Country:        United States of America
[1] The full set of representations of the Design are reproduced in Annexure A to this decision.
On 18 May 2020, TV Innovations Pty Ltd (‘Requestor’) requested revocation of the registration of the Design based on grounds relating to entitled persons (‘Request’). The Request stated that:
1. The application for Registered Design No. 201717503 (“the Australian Design”) was lodged on 7 December 2017 and registered on 3 January 2018. The designer named in the Australian Design is Mr Fred Hollinger, and the original registered owner of the Australian Design is E. Mishan & Sons, Inc (“E. Mishan”).
2.The Australian Design is based on the US Design Patent D 804,898 S (“the US Design”), which was filed on 26 June 2017. Accordingly, the Australian Design was accorded the priority date 26 June 2017.
3.We submit, however, that Mr. Hollinger did not create the Australian Design, and accordingly, is not the actual designer of the Australian Design under s 13(1) of the Designs Act. It follows that E. Mishan is not an entitled person under s 13.
4.Instead, we submit that it was Mr. Hu Yue An, the designer of the Chinese design patent No. 304424085 (“the Chinese Design”), the created the Australian Design. The Chinese Design is identical or almost identical to the US and the Australian Designs, and was filed on 7 June 2017, 19 days before the application for the US Design. The Chinese Design was published and registered on 26 December 2017.
5.Mr. Hu has provided a declaration, stating that he is the actual designer of the Australian Design.
6.The applicant, TV Innovations Pty Ltd, is the exclusive distributor of the grill that is the subject of the Chinese Design in Australia. In the circumstances, [TV Innovations Pty Ltd] is applying to the Registrar to revoke the registration of the Australian Design under s 51.

On 24 June 2020 a delegate of the Registrar of Designs wrote to the Current Owner of the Design, at its address for service, Benjamin Lawyers. The letter asked whether the Current Owner wished to contest the claims made in the Request. In response on 23 July 2020 the Current Owner advised the Designs Office that it would be contesting the Request.
On 24 August 2020 directions were issued to the parties which set out the practice and procedure to be followed in deciding the Request. In accordance with those directions the Requestor filed Evidence in Support (‘EIS’), followed by Evidence in Answer (‘EIA’) being filed by the Current Owner. In turn, the Requestor filed Evidence in Reply (‘EIR’).
An oral hearing was requested by the Current Owner. In advance of the hearing both parties provided written submissions. The hearing took place on 1 November 2021 via video conference. At the hearing the Current Owner was represented by David Larish of Counsel instructed by Benjamin Lawyers. The Requestor did not attend the hearing. The matter has been handed to me to decide in my capacity as a delegate of the Registrar of Designs. What follows is my decision, with reasons, based upon the Request, evidence, written submissions and an audio recording of the hearing.

Evidence

Below is an outline of the evidence filed by the parties:

EIS
EIA

Declaration of Olaf Kretzschmar, Managing Director and IP Consultant of One IP International Pty Ltd for the Requestor made on 31 August 2020, with Exhibits TV-01 to TV-11 (‘First Kretzschmar declaration’). Exhibit TV-09 contains a copy of a declaration by Hu Yue An, owner of Ningbo Jiangbei Chuangxin Electric Appliances Co Ltd made on 5 July 2019 with Annexures A to D (‘Hu declaration’).

Declaration of Fred Hollinger, Product Designer of the Design made on 9 March 2021, with Exhibits FH-1 to FH-2 (‘Hollinger declaration’). Exhibit FH-1 contains a copy of a declaration by Timothy John Benjamin, Solicitor for the Current Owner made on 19 January 2021, with Exhibits TJB-1 to TJB-17 (‘Benjamin declaration’).

EIR

Declaration of Olaf Kretzschmar for the Requestor made on 23 April 2021 with Exhibits OK-01 to OK-10 (‘Second Kretzschmar declaration’).

Blanket confidentiality claim

The EIS, EIR and written submissions by the Requestor all contain a blanket statement that the Requestor regards the information disclosed as relating to the company’s business affairs with the meaning of s 47G of the Freedom of Information Act 1982 (Cth) and deems such information to be strictly confidential. While the Requestor’s interests in preserving its confidential information is acknowledged, I must provide reasons for my findings. In discharging this duty, information claimed to be confidential may inevitably require discussion.
In this decision I adopt the approach of the delegate in Source Homeloans v Coles Group Ltd:
The confidentiality claim obviously extends to the whole of the evidence led in support of the opposition. It is not clear to me how I could decide this matter without discussing the evidence the opponent has served and filed in support of its opposition. The onus in these proceedings is on the opponent to establish its grounds of opposition, at least to my satisfaction. Seemingly barred from any discussion of the opponent’s statements and exhibits and the weight that I attach to them if I were to lend credence to the claim, my hands would appear to have been effectively tied. Prima facie, the easiest way out of the dilemma would be to accede to the opponent’s wishes and find that it has not established its opposition. Thus, if I were to take Mr Peter’s request … at face value, that would be the end of these matters.
This position, obviously, is extreme, since the opponent has filed this evidence in support of its opposition and must expect the evidence to be discussed and weighed. It will be sufficient for me to say, in setting out my reasons for my decision, that there are arguably commercially sensitive matters in the evidence that I do not need to discuss in detail (and, if I do, my consolation lies in the fact that the opponent in not being specific in its request has brought the problem upon itself). None the less, the evidence of the parties as a whole satisfies me of various things, which I will set out under the appropriate headings below.[2]
[2] [2008] ATMO 17, [5]-[6] (Hearing Officer Thompson).

The Requestor

Mr Kretzschmar explains that the Requestor is an Australian wholesaler of consumer products. Since March 2018 the Requestor has imported, distributed and marketed in Australia a product called the ‘Copper Pro Grill’ (‘CPG’).[3] On 10 March 2018, Ningbo Jiangbei Chuangxin Electric Appliances Co Ltd (‘Chuangxin’) signed a declaration giving the Requestor exclusive rights to sell and distribute the CPG in Australia. According to the declaration, Chuangxin is the original manufacturer of the grill and it holds a Designs Patent in China for its design.[4] Below are details of the Chinese Design Patent (‘CDP’):
Registration Number:         304424805
Owner:              Ningbo Jiangbei Chuangxin Electric Appliances Co Ltd
Designer:  Hu Yue An
           Product Name:  Electric BBQ Grill
           Representations:[5]
Filing Date:  7 June 2017
Date of Publication:            26 December 2017
Date of Registration:            26 December 2017
[3] First Kretzschmar declaration [8].
[4] First Kretzschmar declaration [8] [Exhibit TV-03].
[5] The full set of representations of the Design are reproduced in Annexure B to this decision.

The creator of the design the subject of the CDP is listed as Mr Hu Yue An. Mr Hu declares that he is the owner of Chuangxin, and explains that his company designs and manufactures electronic appliances as well as cookware, including barbeques, egg boilers, electric grills, coffee machines, tortilla presses, pans, pots and casseroles.[6] Mr Hu advises that Chuangxin regularly receives orders from overseas companies to manufacturer and deliver products.[7]
[6] Hu declaration [1].
[7] Hu declaration [2].
Mr Hu further declares that he has been working as a designer and engineer since 2000[8] and that he has been designing electric grill products since 2004.[9]
[8] Hu declaration [5].
[9] First Kretzschmar declaration [14] [Exhibit TV-05], [15] [Exhibit TV-06]. see CDPs 3327260, 3533653, 300726636, 301143194 and 301143195.

DEVELOMENT OF DESIGN – THE REQUESTORS ACCOUNT

The evidence does not provide any direct dealings between the Requestor and the Previous Owner, however the Previous Owner, Chuangxin and Mr Hu have all conducted business with a Taiwanese company, Cheering Couple Enterprise Co Ltd (‘Cheering Couple’). Mr Kretzschmar on behalf of the Requestor declares that Cheering Couple contacted Chuangxin during the Autumn Canton Fair in 2016 and enquired for the price of a specific item in its inventory being item JA802D1 for the United States of America market.[10] I have reproduced an image of item JA802D1 below:[11]

[10] Second Kretzschmar declaration [6].

[11] Second Kretzschmar declaration [6] [Exhibit OK-01].

On 20 October 2016 Cheering Couple emailed Chuangxin and requested quotations for the item in different quantities. The email included a request that the grill plates be sprayed with gold and copper non-stick coating or ceramic non-stick coating.[12]
[12]Second Kretzschmar declaration [6] [Exhibit OK-02].
On 24 October 2016 Cheering Couple emailed Chuangxin and requested a sample of item JA802D1. The sample was to be sprayed with ordinary black non-stick coating and gold colour coating respectively. In response Chuangxin sent a sample of item JA802D1 in black colour to Cheering Couple. [13]
[13] Second Kretzschmar declaration [8] [Exhibit OK-03].
On 10 January 2017, Chuangxin sent a second sample of item JA802D1 in copper colour to Cheering Couple.[14]
[14]Second Kretzschmar declaration [9] [Exhibit OK-04].
In February 2017, Cheering Couple sent an image of the following design render to Chuangxin:[15]

[15] Second Kretzschmar declaration [11] [Exhibit OK-06].

Sometime before 16 March 2017 Chuangxin sent the following mock-up sample of the grill design to Cheering Couple for approval:[16]

[16] Second Kretzschmar declaration [10] [Exhibit OK-05].

Mr Kretzschmar declares that after the confimation from Cheering Couple was obtained, Chuangxin started making pre-production samples for Cheering Couple.
On 16 March 2017, Chuangxin sent samples of item JA802D10 to Cheering Couple.[17]
[17] Second Kretzschmar declaration [10] [Exhibit OK-05] (JA802D10 being Chuangxin’s inventory number for the item).

DEVELOPMENT OF DESIGNS – THE OWNERS ACCOUNT

Mr Benjamin declares that the Previous Owner, is a developer, owner and distributor of a broad range of consumer goods. The Designer named in the Design is Mr Fred Hollinger. Since the early 1990’s Mr Hollinger has designed a range of consumer goods for the Previous Owner, many of which have been the subject of design registrations in respect of cookware goods and their componentry.[18]
[18] Benjamin declaration [5] [Exhibit TJB-1].
Since 23 September 2016, Mr Hollinger was working on the design for a product named the Smokeless Grill (‘SG’). Below is an image of the design render created by Mr Hollinger on or before 1 November 2016 (‘first design render’):[19]

[19] Benjamin declaration [6] [Exhibit TJB-2].

In 2016 the Previous Owner instructed Cheering Couple to act as its agent to assist it in procuring the manufacture of the product embodying the design created by Mr Hollinger known as the SG. The Previous Owner sent to Cheering Couple the first design render of the SG created by Mr Hollinger for that purpose.[20]
[20] Benjamin declaration [8].
Sometime in the second half of 2016, Cheering Couple, on behalf of the Previous Owner, approached Chuangxin for the purpose of preparing for manufacture and manufacturing the SG.[21]
[21] Benjamin declaration [9].
On 11 November 2016, prior to sending Chuangxin the first design render, Cheering Couple sent to Chuangxin a confidentiality agreement for execution. I have reproduced the English translation of the confidentiality agreement below: [22]

[22] Benjamin declaration [10] [Exhibit TJB-5].

On 11 November 2016 following receipt of the executed confidentiality agreement with both Chuangxin’s company seal and Mr Hu’s personal seal affixed, Cheering Couple sent to Chuangxin via instant messaging the following design render of the SG.[23]

[23] Benjamin declaration [11] [Exhibit TJB-6].

According to Mr Benjamin the Previous Owner instructed Cheering Couple to ascertain from Chuangxin whether it already had any products similar to the first design render. Mr Benjamin explains that the existence of a similar product would have resulted in reduced lead times and production cost for the SG as there would already be in existence production drawings and mould templates which could be adapted to the new design. However, Chuangxin advised that item JA802D1 was the only product design which was similar. As such new production drawings were required.[24]
[24] Benjamin declaration [11] [Exhibit TJB-7].
On 15 February 2017 Cheering Couple sought an update from Chuangxin on the progress of the production drawings. Later that day Chuangxin provided Cheering Couple with the following production drawings:[25]

[25] Benjamin declaration [12] [Exhibit TJB-8].

On 20 February 2017 Cheering Couple instructed Chuangxin to proceed with preparing moulds based on the production drawings and sought from Chuangxin an executed moulding agreement.[26]
[26] Benjamin declaration [13] [Exhibit TJB-9].
On 21 February 2017 Chuangxin provided to Cheering Couple an executed copy of the moulding agreement.[27]
[27] Benjamin declaration [14] [Exhibit TJB-10].
On 6 April 2017 Cheering Couple emailed Chuangxin advising that the Previous Owner wanted an additional ‘baking pan’ hotplate for the SG which was completely flat and did not have hole openings.[28]
[28] Benjamin declaration [15] [Exhibit TJB-11].
On 28 April 2017, Cheering Couple sent an email to Chuangxin attaching a new moulding agreement in respect of the flat hotplate. Chuangxin replied to the email on the same day and returned the executed moulding agreement.[29]
[29] Benjamin declaration [16] [Exhibit TJB-13].
On 9 May 2017 Cheering Couple sent an email to Chuangxin requesting that it be conveyed to Mr Hu that the Previous Owner wished to apply for patents for the products developed and requested production design drawings and exploded views of the products for that purpose.[30]
[30] Benjamin declaration [17] [Exhibit TJB-14].
On 10 May 2019 Chuangxin replied to Cheering Couple and attached exploded views of items JA802D10 (small version) and JA802D11 (large version). I have reproduced the exploded views below: [31]

JA802D10 JA802D11

[31] Benjamin declaration [17] [Exhibit TJB-14].

On 26 June 2017, Mr Hollinger assigned all his rights in and to the invention the subject of the application for a United States Design Patent (USDP), that resulted in registered USDP D804,898, to the Previous Owner.[32]
[32] Benjamin declaration [7] [Exhibit TJB-4].
In July 2017 Chuangxin began manufacturing the SG and 110,000 units were subsequently produced. However, due to repeated demands by Chuangxin for a price increase to the manufacture of the SG which were rejected by the Previous Owner, Cheering Couple sourced another manufacturer, Cuori Electrical Appliances (Group) Co Ltd to assist it with the manufacture of the SG.[33]
[33] Benjamin declaration [19], [20].
Mr Hollinger also provides some background regarding the development of the Design. Mr Hollinger declares that in early January 2017, the Vice President of the Previous Owner, Steven Mishan contacted him and requested a design render of the SG showing the oval shaped heating element. On 10 January 2017 Mr Hollinger emailed Mr Mishan the following design render showing the oval shaped heating element (‘second design render’):[34]

[34] Hollinger declaration [4] [Exhibit FH-2].

Legal framework

Section 13 of the Act provides:
Who is entitled to be registered as the registered owner of a design
(1) A person mentioned in any of the following paragraphs is entitled to be entered on the Register as the registered owner of a design that has not yet been registered:
(a) the person who created the design (the designer);
(b) if the designer created the design in the course of employment, or under a contract, with another person--the other person, unless the designer and the other person have agreed to the contrary;
(c) a person who derives title to the design from a person mentioned in paragraph (a) or (b), or by devolution by will or by operation of law;
(d) a person who would, on registration of the design, be entitled to have the exclusive rights in the design assigned to the person;
(e) the legal personal representative of a deceased person mentioned in paragraph (a), (b), (c) or (d).
(2) Despite subsection (1), a person is not entitled to be entered on the Register as the registered owner of a design that has not yet been registered if:
(a) the person has assigned all of the person’s rights in the design to another person; or
(b) the person’s rights in the design have devolved on another person by operation of law.
(3) To avoid doubt:
(a) more than one person may be entitled to be entered on the Register as the registered owner of a design; and
(b) unless the contrary intention appears, a reference to the registered owner of a registered design in this Act is a reference to each of the registered owners of the design.
(4) No person other than a person mentioned in paragraph (1)(a), (b), (c), (d) or (e) is entitled to be entered on the Register as the registered owner of a design that has not yet been registered.

Section 13 sets out a list of who is entitled to be registered as the owner of a design that has not yet been registered. Section 13(1)(a) defines ‘designer’ as ‘the person who created the design’. The case law has identified the designer as the ‘person whose mind conceives the relevant shape, configuration, pattern or ornamentation applicable to the product and reduces it to visual form’.[35]
[35] LED Technologies Pty Ltd v Elecspess Pty Ltd [2008] FCA 1941, [26] (Gordon J) citing with approval Chris Ford Enterprises Pty Ltd v BH & JR Badenhop Pty Ltd (1985) 7 FCR 75, 80 (Smithers J).
As the concept of entitlement relates to a design ‘that has not yet been registered’[36] evidence of entitlement should at least be contemporaneous with the registration date of the Design. Equally evidence of entitlement must pertain to the design under consideration and not one which merely happens to be similar.[37]
[36] Act s 13(1).
[37] Australian Fitness Supplies Pty Ltd v Rasheed Rane [2013] ADO 6 [36] (Hearing Officer Lyons).

In the present matter, the Requestor argues that Mr Hu is the designer of CDP and that it is identical or almost identical to the Design. Moreover, the Requestor has made various claims that the oval design of the heating element is a proprietary design of Chuangxin, which Chuangxin has been using since 2007.
There is no doubt that Chuangxin’s designer Mr Hu has experience in grill design. However, ownership of prior art does not mean that a person was an entitled person. In my assessment of the evidence, a copy of Mr Hollinger’s first design render was provided to Chuangxin on 11 November 2017 by Cheering Couple, which showed a grill style cooking plate, with 15 vertical bars, and two handles on the two shorter sides of the plate, embedded in a rectangular shape with sloping sides and curved edges on the top of the base. The purpose of Cheering Couple providing the design render to Chuangxin was to create production drawings to manufacturer the SG product.
On 15 February 2017 Chuangxin provided Cheering Couple with the production drawings in two sizes which showed a grill style cooking plate, with 15 vertical bars (small version) and 19 vertical bars (large version), a flat oval shaped heating element, two handles on the two shorter sides of the plate, embedded in a rectangular shape with sloping sides and curved edges on the top of the base.
On 9 May 2017 Cheering Couple sent an email to Chuangxin requesting that it be conveyed to Mr Hu that the Previous Owner wished to apply for patents for the products developed and requested production design drawings and exploded views of the products for that purpose. The next day Chuangxin provided Cheering Couple exploded views of its production drawings and labeled the drawings item JA802D10 (small size) and item JA802D11 (large size).
Then on 7 June 2017 Mr Hu applied to register what appears to be item JA802D11 (large size) in China and on 26 June 2017 the Previous Owner applied to register what appears to be item JA802D10 (small size) in the United States.
In John Michael Jarvie v Comtec Industries Pty Ltd, Mr Whelan received drawings which had been prepared by the requestor in that case. The drawings included improvements the requestor had conceived. The Delegate stated:
From this point, Mr Whelan declares that he applied his skills as an engineer to certain technical problems with the above designs. The result of Mr Whelan’s labours was the drawings that depict the Designs. … I note that there are differences, particularly to the sheet pile component. Taking Mr Whelan’s declaration at face value, these may represent a significant application of engineering nous, but this is not the point. Designs are concerned with visual appearance. Visually then, the two iterations of the sheet pile are very close and the pin pile is almost identical.
…
The Requestor has shown how, through many years and iterations, and in particular the spark of inspiration that hit him in early 2014, he arrived at the ‘Before’ shapes. … Mr Whelan’s case is, at its highest, that he took the ‘Before’ shapes and applied his skill as an engineer to them, resulting in the ‘After’ shapes. Mr Whelan is therefore clearly not the person whose mind conceived of these shapes—his contribution was a refinement of shapes already conceived in the mind of the Requestor. Mr Whelan’s work was that of a drafter and engineering consultant tasked with ironing out the kinks in someone else’s original concept.[38]
[38] [2018] ADO 5 [24] and [26] (Hearings Officer Richards).
In LED Technologies Pty Ltd v Elecspress Pty Ltd, Mr Ottobre provided sample products and drawings to an overseas manufacturer which then created engineering drawings for the products. Gordon J stated:
On the facts just described, it is clear that Mr Ottobre is the person who conceived the relevant shape, configuration and pattern of the designs and reduced it to a visible form; “M” simply converted that design to an electronic form in order to facilitate the production process. Put another way, it was Mr Ottobre, not “M”, who had the idea for dual and triple combination LED lamps in one base. It was Mr Ottobre who reduced that idea to visible form in the sketches. As the engineering drawings marked “1”, “2” and “3” on Annex C record, it was Mr Ottobre’s sketches which contained the features different from those in any other previous design. Accordingly, Mr Ottobre was “the person who created the design …[39]
[39] (2008) 80 IPR 85, 96 [26].
In the present matter, the evidence filed supports the Previous Owner’s assertion that Mr Hollinger was the sole designer of the Design. The design render supplied to the Chuangxin on 11 November 2016 by Cheering Couple, demonstrates that Mr Hollinger conceived the visual appearance of the Design. While Mr Hu was tasked with providing production drawings to facilitate the manufacture of the SG product and he more likely than not applied his engineering skills to Mr Hollinger’s design render (by refining them to include a flat oval heating element in the final production drawings), Mr Hu’s contribution was no more than a refinement to Mr Hollinger’s design render already provided by Cheering Couple.
I find that the sole designer of the Design was Mr Hollinger. Having so found, I am now able to turn to the main question. On the day the Design was registered, who was entitled to be recorded as the registered owner.
The default position in s 13 of the Act is that the designer, being the person who created the design, is entitled to be entered on the Register of Designs as the registered owner.[40] However, this position will change if certain conditions, as laid out within the provision, are satisfied. In this case, the designer Mr Hollinger, assigned all his rights in and to the invention the subject of the Design to the Previous Owner.[41]
[40] Act s 13(1)(a).
[41] Act s 13(2)(a).
I find that the Requestor has failed to satisfy me that Mr Hu was a designer of the Design, or that it was otherwise entitled to proprietorship of the Design.

Decision

Section 52 of the Act provides:
Procedures in relation to application
(1) This section applies if a person makes an application under section 51 for revocation of the registration of a design.
(2) If the Registrar is satisfied that:
(a) a person or persons were entitled persons at the time the design was first registered, and one or more of the original registered owners of the design was not an entitled person at that time; or
(b) each original registered owner of the design was an entitled person at the time when the design was first registered, but another person or persons were also entitled persons at that time;
the Registrar may make a written declaration specifying that a person whom the Registrar is satisfied was an entitled person at the time the design was first registered is an entitled person under this subsection.
(3) If the Registrar makes a declaration under subsection (2), the Registrar must:
(a) notify the relevant parties that the registration of the design is revoked; and
(b) make an entry in the Register under section 115.
(4) The Registrar must also publish a notice, in the form prescribed by the regulations, stating that the registration of the design has been revoked and that the design is taken never to have been registered.
(5) The Registrar must not revoke the registration of a design under this section unless the Registrar has given each original registered owner a reasonable opportunity to be heard.
Based on the evidence before me, I am not satisfied that Requestor or any persons other than the Previous Owner were an entitled person at the time of registration of the Design. Accordingly, the Request is unsuccessful and I decline to revoke registration of Australian design number 201717503.

Costs

The Current Owner has sought an award of costs. The ordinary course is for costs to follow the event. I award costs against the Requestor.

Louise Tuohy
Hearing Officer
Delegate of the Registrar of Designs
16 March 2022

Annexure A

Design 201717503

Annexure B

Chinese Design Registration 304424805