Extending the deadline to claim Paris Convention priority

Background
Joseph Joseph Limited (JJL) owns Community Design Registration 886965, filed on 20th February 2008 for bowls and chopping boards.

On 24th March 2010 JJL filed Australian design applications 11120/2010 for chopping boards and 11121/2011 for bowls. At the same time, JJL filed an application for a 20-month extension of time under Section 137(2)(a) of the Designs Act 2003, seeking to claim the priority date of Registration 886965 retrospectively because of an error or omission by JJL or its agent. An accompanying statutory declaration set out the reasons for the extension of time application.

Section 27(1)(b) of the Designs Act and Regulation 3.06 of the Design Regulations 2004 provide for a six-month Paris Convention period to claim priority from an earlier overseas application or registration.

JJL did not file the design applications within the six-month period in which to claim convention priority. The extension of time attempted to recover the priority date in Australia and render the eventual Australian design registrations valid registrations. The extension of time application was advertised for third-party opposition purposes on 15th April 2010.

Kmart Australia Ltd (KAL) filed a notice of opposition to the extension of time on 14th May 2010. KAL served evidence in support of its opposition, inclluding a supporting statutory declaration with exhibits. JJL filed no evidence in answer. Neither party requested a hearing. However, KAL did file written submissions.

Extension of time: "relevant act”
The extension of time provisions under Section 137 provide as follows:

"(2) The Registrar may, on application by a person concerned in accordance with the regulations, extend the time for doing a relevant act if, because of:
(a) an error or omission by the person, or by the person’s agent; or
(b) circumstances beyond the control of the person;
the relevant act that is required to be done within a certain time is not, or cannot be, done within that time.
(3) The time for doing a relevant act may be extended, whether before or after that time has expired."

Section 137 defines and uses the phrase “relevant act”. The meaning of the phrase “relevant act” is crucial to the outcome. While Section 27(1)(b) of the Designs Act defines the convention priority date as a “date prescribed by the regulations”, there is no provision defining a claim to priority as a “prescribed action” as mentioned under Section 137(7).

The delegate looked to Australian patent case law and found that the extension of time provision in Section 160(2) of the Patents Act 1952 applied to an extension of time for making a convention application for a patent. The delegate found an “act or step in relation to an application of a patent” in that patent case to be analogous to Section 137(7) of the act, which refers to “an action... in relation to an application for registration or publication of a design”. Consequently, the delegate determined that claiming a right of priority when applying for the registration of a design is a “relevant act” under Section 137(7)(b) and the time allowed for claiming that right may be extended.

According to Section 137, an error or omission on the part of the applicant (or its agent) must have occurred, and failure to carry out the relevant act was because of that error or omission. It is then for the registrar of designs to determine whether, under those circumstances, it is appropriate to extend the time and consequently allow the claim for convention priority.

"Error or omission"
The statutory declaration for JJL explained that JJL had commenced discussions with Australian distributors to sell the chopping boards and bowls in Australia, believing that the designs were already protected in Australia. That declaration also claimed that at all material times, JJL believed in good faith that its designs were protected by either copyright law or the law of registered designs in Australia by virtue of its Community design registration, as JJL had not been advised otherwise.

The declaration went on to state that as a result of due diligence conducted by JJL’s legal representatives, it was immediately apparent that JJL’s designs were not in fact protected in Australia and there had been an omission to apply for convention design registration.

The delegate concluded that JJL was under a mistaken belief regarding the extent of protection arising from its ECD registration, and that such an assumption was of JJL’s own making.

Although the declaration for JJL indicated that JJL always planned to distribute its products worldwide, that declaration did not establish or state that there had been an intention to distribute the products to Australia. Vitally, there was no mention of an intention to distribute those products during the six-month period ending in August 2008.

The hearing officer, having to rely on the facts presented, was not satisfied that there had been any “error or omission” by JJL or its agent.

Relevant case law from patent and trademark decisions indicates that an “error or omission” must be something more than a mere failure to do the relevant act. For example, a failure to file a notice of opposition in time is not in itself an error or omission.

From the material before the hearing officer, JJL’s purported misunderstanding of the protection arising from a Community design registration is the reason for failing to apply for the registration of the designs in Australia within the statutory period for claiming convention priority. A misapprehension or ignorance of Australian designs legislation does not constitute an error in itself.

The failure to file a design application must be “by reason of” the error or omission (ie, the facts of the error or omission gives the causal link resulting in the relevant act not being carried out within the required time).

The delegate was not satisfied that there was an “error or omission” that resulted in JJL’s failure to file its design applications at the correct time, and refused the extension of time application to claim priority for the filing of Design Applications 1120/2010 and 1121/2010. Consequently, the design applications were accorded their original lodgment date of 24th March 2010.

The design applications’ Australian filing date fell after publication of the corresponding Community design registration, and possibly after promotion or sale of the products. Australia has no grace period for prior public disclosure or commercialisation of a design prior to the Australia design application filing date or valid priority date. Consequently, without a valid claim to priority, the JJL design applications (and thus the products) would not be protected. Under Australian design-copyright overlap provisions in the Copyright Act 1968, three-dimensional designs embodied in products and produced in large numbers cannot rely on copyright protection either.

Infringement – unjustified threats
After becoming aware of possible infringement of JJL’s designs in Australia, their legal representatives sent a cease and desist letter to KAL via its legal representatives.

KAL’s reply included the following text:

“In section 2 of your letter you cite two European Union design registrations. Your client has failed to identify how EU designs are relevant in the context of our client selling goods in Australia.

Section 77 Application for relief from unjustified threats
(1) If a person is threatened by another person (the respondent) with infringement proceedings, or other similar proceedings, in respect of a design, an aggrieved person (the applicant) may apply to a prescribed court, or to another court that has jurisdiction to hear and determine the application, for:
(a) a declaration that the threats are unjustified; and
(b) an injunction against the continuation of the threats; and
(c) the recovery of damages sustained by the applicant as a result of the threats.
(2) A threat mentioned in subsection (1) may be by means of circulars, advertisements or otherwise.
(3) If a certificate of examination has not been issued in respect of a design, a threat to bring infringement proceedings, or other similar proceedings, in respect of the design is an unjustified threat for the purposes of this section."

Importantly, the aggrieved person need not be the recipient of the threat(s). A threat may exist where the person reading the letter would think that infringement action may occur.

JJL’s failure to have not only registered design protection, but also examined and certified design protection, leaves JJL open to a Federal Court action for unjustified threats under Section 77 of the Designs Act. 

Comment
Although this decision (Kmart Australia Limited [2011] ADO 2 (21st April 2011)) confirms that an extension of time to claim convention priority is possible under the Designs Act, there are onerous grounds to establish how the error or omission occurred and how it resulted in the relevant act not being completed. This case highlights the need for effective and efficient communication between clients and their legal representatives, which should involve integration of such legal advisers with all major levels within a client’s business, including marketing, product development and management teams, to ensure that all are aware of the product global marketing strategy and timing (and time limits) for IP protection. Furthermore, design registrations under the Designs Act require examination and certification before enforcement in Australia. Asserting design rights based on an unexamined design registration can result in an action for relief from unjustified threats.