DESIGNS: Old new means of fighting against patent trolls
The most recent court practice in disputes with bad faith owners of design patents is not setting in favor of the latter. Now bona fide rights holders and importers have an additional powerful legal tool for fighting against ‘patent trolls’. Such court practice may have a positive effect on further practices of and approaches to combating this unfair practice.
In 2013-1014, some individuals obtained design patents for trivial designs of rubber gloves, household scrapers, and clothes-pegs. Later IP rights in the designs were assigned to a Chinese company, which, in its turn, recorded the designs with the Customs Register of IP Rights.
At the end of 2014, a Ukrainian company (the "Claimant") imported household goods, including, inter alia, rubber gloves, clothes-pegs, and household scrapers. Customs clearance of the shipment was suspended due to an alleged infringement of IP rights. Further, the infringement of IP rights in the designs was confirmed by an expert opinion. As a result, customs officers executed a protocol on violation of customs regulations as set out in Section 476 of the Customs Code of Ukraine (“Movement of Goods Infringing IP Rights Across the Customs Border”), and issued a refusal to perform customs clearance of the goods.
The Claimant challenged the refusal to the administrative court. Having considered the case, the court satisfied the claim. The court agreed with the Claimant’s arguments that the latter enjoys the prior user rights (Section 22 of the Law of Ukraine "On Protection of Designs"). In particular, the court stated that the design owner's IP rights are not infringed, and the decision on the suspension of customs clearance is unlawful. In particular, the court pointed out that (i) applications for design patent were filed in 2013-2014; and (ii) the Claimant has been importing the respective goods since 2007 according to the customs declarations, that is long before the dates of filing applications for the underlying design patents.
The discussed decision is of significant importance as it may have a substantial influence on further practice of combating against bad faith registrations of designs and discourage such registrations. In particular, it may have the following potential consequences:
Seeking invalidation of the offensive design patents due to a lack of novelty will remain a primary solution for those importers who do not have the prior user rights. Statutory limitations on transfer of the prior user rights – i.e. either together with the whole enterprise or as a part of a certain business – contribute to this.
It is obvious that popularity of such practice will raise, given the support by the state authorities (for example, Informational Letter No. 6885/1/1-15of 04 March 2015 issued by Mr. Vyacheslav Kyrylenko, the Vice-Prime Minister and Minister of Culture of Ukraine).
The discussed court practice and the position of state authorities may significantly discourage ‘patent trolls’ to obtain design patents for ordinary (trivial) things, as their ‘target audience' (well-known foreign manufacturers, their distributors and retailers) should not have problems with proving the fact of use of the relevant designs in good faith before design patent filing date.
COPYRIGHT: For rights holders to note
The judgments of the commercial courts rendered in February 2015 regarding copyright infringement of intellectual property rights in both the "Masha and Medved" (SK: to be translated as “Masha and the Bear”) cartoon and its characters make one more contribution to the law enforcement practice for settling similar disputes. The rights holders ought to more thoroughly prepare for filing the claim, which is confirmed by the below mentioned judgments of the court: