ITMA 322 APRIL 2005

DESIGN & COPYRIGHT
because USP’s loss was not attributable to the breach
of copyright. Such loss lay beyond the scope of the
protection of the law of copyright. Laws LJ pointed
out that where a copyright is in a written document
the breach in question consists of the unauthorised
use of the actual text of the document. The pirating of
the ideas in the actual text is not a breach of copyright.
As both parties had acknowledged that Powerhouse
had not seen the actual text of the CAA, and nor, on
the facts, was the specific text of any importance to
Powerhouse, it was held that although USP had suffered
loss from the use of the ideas in the template,
such loss was outside the scope of protection of the
law of copyright. LGH had, in using the CAA as a
basis for its redrafted documents, appropriated the
labour and skill of the authors of the documents and
had therefore infringed the copyright in the document.
However, this appropriation of labour and skill
did not cause the loss. Consequently, the Court of
Appeal set aside the Master’s loss of profit award.
Oakley v Animal: A True Spectacle
USP had cross-appealed, arguing that if LGH succeeded
in reducing the amount of damages the
notional royalty should be increased and that they
should be awarded damages to reimburse them for
the loss of the full implementation fee of £40,000.
However, the Court of Appeal held that there was no
basis that USP could claim in damages the loss of the
full implementation fee.
The Court of Appeal did say, however, that the royalty
of £15,000, awarded by Master Price, had only
related to the infringement committed in connection
with Apollo. Consequently the royalty award had to
be uplifted to £35,000 to take into account the later
infringements by LGH.
This case follows the doctrine that copyright protection
will only protect the unauthorised use of the
actual text, rather than the ideas contained within that
text. To quote the age old adage, there is no copyright
in an idea.
Shelley Blythe and Simon Bennett,
Arnold & Porter (UK) LLP
Oakley Inc v (1) Animal Limited & Ors and (2) The Secretary of State for Trade and Industry [2005] EWCA Civ 1191
The recent Court of Appeal judgment in the case of
Oakley Inc v Animal Limited examines what started off
as an ostensibly simple dispute concerning the
Registered Designs Regulations 2001. This unlikely
case has now provoked one of the most important
administrative law discussions of recent times, with
weighty implications for not only the Registered
Design Regulations but for all subordinate legislation
made in the UK, including that relating to other intellectual
property rights.
Background
In 2001 the Registered Designs Regulations were
introduced, creating new law applicable to registered
designs from 9 December 2001. The purpose of the
Regulations was to implement European Community
Directive 98/71/EC, which provided for a more harmonised
system relating to registered designs across
Member States. The Directive was incorporated into
UK law by way of s2(2) of the European Communities
Act 1972 (‘the 1972 Act’) which, broadly, gives ministers
the power to make regulations for the purpose of
implementing Community laws.
The case arose specifically in relation to the transitional
provisions of the new legislation. What was to
happen in relation to designs registered prior to 9
December 2001 (ie, under the existing Registered
Designs Act 1949) was not conclusively determined
by the Directive. Instead of applying the new law
indiscriminately, the Directive gave member states an
option to derogate1 and retain in force existing legislation
on validity for all designs already registered
under such legislation.
Such options are frequently seen in Community leg-
islation and, although potential difficulties had been
predicted by some2 due to the fact that it would be a
government minister and not Parliament who chose
whether the option should be exercised, there was no
case law which dealt with the subject convincingly.
The Secretary of State chose to exercise the option
given by the Directive, with the effect that all existing
design registrations would continue to be subject to
the old law. This was expressed in Regulation 12 of
the 2001 Regulations.
The position following the introduction of the
Regulations was therefore that the old law on validity
would apply to designs registered prior to 9
December 2001, and the new law would apply to
those registered after. Oakley was the owner of a registered
design for sunglasses which was registered
before 9 December 2001 and so, according to the
Regulations, subject to the old law.
Shortly before the start of a trial in which Oakley
was attempting to assert its registered design rights in
certain sunglasses against Animal, it was learnt that
Oakley had published one of the designs a month
before it had been registered. Under the old law a
design registration must be ‘new’ in the UK in order
for registration to be valid. If it could be shown that
the design had been published in the UK by someone
free to do so before the design was registered here,
then novelty would not be established and the design
would not be validly registered. Animal Limited used
this information to challenge the validity of Oakley’s
registered design right and Oakley put forward the
defence that it wasn’t in fact the old law which
applied to the case, but rather the new law contained
in the Regulations. If this was correct then Oakley
1 Article 11.8 of EC Directive 98/71/EC
2 ‘The Modern Law of Copyright and Designs’, 3rd edition, Laddie, Prescott, Vitoria, Speck, Lane
12 ITMA Review December 2005