England and Wales Court of Appeal (Civil Division) Decisions

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Cite as: [1999] ITCLR 297, [1999] RPC 461, [2000] ECDR 42, [1998] EWCA Civ 1900

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IN THE SUPREME COURT OF JUDICATURE No CHANF 97/0809/3

IN THE COURT OF APPEAL (CIVIL DIVISION)

ON APPEAL FROM ORDER OF MR JUSTICE RATTEE

Royal Courts of Justice

Strand

London WC2

Thursday, 3rd December 1998

B e f o r e:

LORD JUSTICE SIMON BROWN

LORD JUSTICE MUMMERY

SIR CHRISTOPHER SLADE

FARMER BUILD LTD

Appellant

- v -

CARIER BULK MATERIALS HANDLING LTD and Others

Respondents

(Handed down judgment

Smith Bernal Reporting Limited, 180 Fleet Street,

London EC4A 2HD

Tel: 0171 421 4040

Official Shorthand Writers to the Court)

MR MICHAEL SILVERLEAF QC and MISS HEATHER LAURENCE (Instructed by Briffa & Co of London) appeared on behalf of the Appellant

MR ANTHONY WATSON QC and MISS EMMA HIMSWORTH (Instructed by Freeth Cartwright Hunt Dickens of Nottingham) appeared on behalf of the Respondents

J U D G M E N T

(As Approved by the Court )

(Crown Copyright)

LORD JUSTICE MUMMERY:

Introduction

It is 10 years since the introduction into English Law of unregistered design right by Part III of the Copyright, Designs and Patents Act 1988 (the 1988 Act). This is the first case of design right to reach the Court of Appeal. The relative lack of case law on design right is in striking contrast to the mass of complex litigation before the 1988 Act in the High Court, the Court of Appeal, the House of Lords and the Privy Council relating to infringement of artistic copyright in drawings of designs industrially applied to functional articles, such as spare parts for cars and other machinery. Professor W.R.Cornish described it (from a lawyer's perspective) as a "merry litigious bonanza" (Intellectual Property- 3rd Edition, p. 485).

This case is about an unusual subject for litigation in the Chancery Division, even in the context of the design right in functional articles: an agricultural rotary screen slurry separator. It has been developed to meet the demands of modern methods of intensive farming, and is intended to displace more familiar features of the English rural landscape - the dung heap and the muck-spreader.

The essential idea of the rotary screen separator is that the slurry is disposed of by being piped or fed into the top of a machine, within which it is squeezed by rollers onto a perforated cylindrical drum. The liquid element is squeezed through the holes in the drum and collected in a hopper. The solid element is scraped off the drum. The separated constituent solid and liquid parts are separately recycled for use as fertilisers.

The claim is that design rights in a rotary screen slurry separator manufactured and marketed under the name TARGET by the Plaintiffs, Farmers Build Limited ("Farmers Build"), have been infringed by the Defendants (collectively referred to in this judgment as "Carier"), who manufacture and market a slurry separator under the name ROTOSCREEN.

By an order of 26 March 1997 Rattee J dismissed the action. Although Farmers Build successfully resisted the attack by Carier on the subsistence of design right in the shape and configuration of the whole and parts of the TARGET machine, the judge refused to grant any monetary relief for infringement on the ground of acquiescence. Farmers Build appeal. Carier cross appeal.

Background Facts

Farmers Build carried on the business of manufacturing and marketing slurry separators from 1986, when it was incorporated, until the end of 1993, when it became insolvent and went into creditors' voluntary liquidation.

Carier originally manufactured corn bulk-handling machinery. Prior to their involvement with Farmers Build in the design and manufacture of the TARGET machine, Carier had no experience of making or marketing slurry separators.

At first Farmers Build sold a slurry separator made by BKW. As that p2machine had design defects, Farmers Build, through its Managing Director, Mr David Hoare, looked for an alternative machine. One type of slurry separator was made by Gascoigne Gush & Dent (Agricultural) Ltd. The GASCOIGNE machine, which used pneumatic rollers, experienced problems when stones in the slurry punctured the rollers. Gascoigne's business was acquired by a German company, Sudtech Umwelt - Anlagenbau GmbH ("Sudtech") which manufactured a slurry separator under the name SUDSTALL.

In 1989 Mr Hoare negotiated, on behalf of Farmers Build, an exclusive distribution agreement with Sudtech for the SUDSTALL machine. From June 1989 Farmers Build sold SUDSTALL machines in the United Kingdom. Unfortunately, Farmers Build's customers experienced difficulties not encountered on German farms: perforation of the rollers by stones, jamming and corrosion of the rotating drum and corrosion of bearings inside the drum. The problems were thought to have been caused by the particular design of the SUDSTALL machine. Sudtech tried unsuccessfully to rectify the problems. Persistence of the problems put Farmers Build, which was responsible for servicing and supplying the spare parts, under increasing financial pressure arising from broken machines, customer complaints and large repair bills under warranty.

In late 1989 Farmers Build engaged the services of an engineer, Mr Charles Brinsley, to help maintain and service the SUDSTALL machines. Though he did work for Farmers Build, he remained self employed.

As a result of the difficulties with the SUDSTALL machine, Farmers Build approached Carier to investigate the possibility of Carier manufacturing more effective machines exclusively for Farmers Build.

In April 1991 Farmers Build put to Carier a scheme called Project X for an agricultural effluent purification system which did not involve the use of chemicals, but included the use of a slurry separator. A meeting took place between Mr Hoare and Mr Brinsley, on behalf of Farmers Build, and the Chairman and Managing Director of Carier, Dr Mitchell, and their financial director, Mr Gregory. It was agreed that Carier would produce a prototype slurry separator in accordance with Farmers Build's requirements, to be based on and to be an improvement on the designs of the GASCOIGNE and SUDSTALL machines.

Terms were agreed, as evidenced by a memo dated 22 April 1991 sent by Dr Mitchell to Mr Hoare and by a further memo dated 24 July 1991 signed by Dr Mitchell, though not by Mr Hoare or anyone else on behalf of Farmers Build. Carier would be a licensee of Farmers Build in relation to the newly designed slurry separator. Farmers Build would have the intellectual property rights.

At about the time of the agreement, in April 1991, Dr Mitchell visited the Farmers Build stand at the 1991 "Muck Show." Accompanied by 2 of Carier's employees, Mr Clive Simpson and Mr Brian Hagan, a qualified agricultural machinery designer and engineer, Dr Mitchell inspected the SUDSTALL separator on display at the stand.

Early in May 1991 Farmers Build caused two slurry separators to be delivered to Carier - a SUDSTALL machine and an old, long discarded GASCOIGNE machine. Farmers Build issued to Carier a purchase order for the supply of

" Solids/Liquid Separation Unit based on development detail supplied by our (ie Farmers Build's) staff and joint discussions and as outlined at a meeting at your offices on 17 April 1991."

The order stated that " it is agreed that a 15% deposit on the projected price of £6,000 will be paid and the balance due on the delivery of the commissioned unit."

On about 7 May 1991 Mr Hagan studied the two slurry separators. They were both of the same basic design, but there were differences in the rollers and inner hopper.

On 9 May 1991 Mr Hagan had a meeting with Mr Brinsley and with Mr Robert Longley, the contracts manager of Farmers Build. The purpose of the meeting was to discuss the machine to be made by Carier. It was agreed that the machine would bring together the designs of the GASCOIGNE and SUDSTALL machines. Of the two machines, the GASCOIGNE design was of greater influence than the SUDSTALL.

Between May and July 1991 Mr Hagan worked on the design of the new slurry separator. He had further meetings and discussions with Mr Brinsley and Mr Longley on how to overcome problems encountered in the performance of the SUDSTALL machine. They pooled their ideas.

In July 1991 Mr Hagan completed the work on the new TARGET machine, as it was to be called. A prototype was tested. Improvements were made to it. The judge found that the final machine was made up of some design features copied from the GASCOIGNE machine, some from the SUDSTALL machine and some not found in either the GASCOIGNE or the SUDSTALL machine.

In August 1991 the finished TARGET machine was put into production. It was a big success. But Farmers Build still had financial problems leading to the breakdown of the relationship between them and Carier. Their relations deteriorated. Farmers Build failed to sell as many TARGET machines as Mr Hoare had led Dr Mitchell to expect. Carier experienced difficulty in recovering payments due to them from Farmers Build. By about September 1992 Farmers Build owed Carier about £65,000. Carier decided to terminate the relationship. On 2 November 1992 Carier gave notice to Farmers Build terminating an agreement signed in June 1992. Termination was to take effect from 31 December 1992. It is accepted that the agreement was effectively terminated.

Dr Mitchell and his three fellow directors considered that Carier were now free to make and sell slurry separators on their own account. A new company, Carier Pollution Control Limited, was incorporated on 23 December 1992. It began selling slurry separators in April 1993. Their ROTOSCREEN machine was exhibited at the April 1993 "Muck Show".

The ROTOSCREEN looks different from the TARGET machine from the outside, but the actual machinery inside the ROTOSCREEN machine is almost identical to the TARGET machine. By April 1993 Farmers Build knew that Carier were attempting to sell slurry separators of a similar design under the name ROTOSCREEN on their own account, but took no action. Carier continued to sell slurry separator machines to Farmers Build. Farmers Build decided " to wait and see how the ROTOSCREEN got on ".

Carier first received a complaint about the sales of the ROTOSCREEN from Farmers Build in May 1994. On a visit to Dr Mitchell and Mr Gregory, the liquidator of Farmers Build suggested that Carier might be infringing Farmers Build's rights. He informed them that he was taking advice and would write to them. He did not do so until 19 January 1996 when solicitors instructed by him sent a letter before action to Carier.

The writ was issued on 1 February 1996.

The Proceedings

As a result of the arguments on this appeal about (a) the difference between the pleaded case and the case now advanced on behalf of Farmers Build and (b) the scope of a concession made by Counsel previously acting on behalf of Carier as to ownership and infringement of design right, it is necessary to examine the relevant pleadings. That will reveal how the case was put by Farmers Build and how Carier responded to it.

(1) The re-amended statement of claim

Paragraphs 8 and 9 are of particular importance.

" 8. The shape and/or configuration of the machinery in the said slurry separator

[ TARGET] is an original design and design right subsists therein.

9. Further or in the alternative, the shape and/or configuration of each of the component parts of the said machinery identified in the Schedule hereto is an original design and design right subsists therein."

The Schedule, as amended, stated as follows:-

" The following are the component parts in which the Plaintiff claims design right, identified by reference to the numbers on the drawing annexed hereto:-

1. Inner hopper (10), scraper assembly (34), (35), (36) and the bearings (85), throwers (48) and roller guards (61), (63).

2. Outer rollers (5); in particular the laminated surface and sectional construction thereof.

3....... support arms (3) and spring-tension mounting (21).

4. Lower side cover assembly (64), (65).

5. Perforated Drum (7) . "

The annexed drawing shows all the different parts of the TARGET machine separately numbered from 1 to 85, although, as made clear in the pleading and the Schedule, the claim to design right in the shape or configuration of each of the component parts of the TARGET machine was confined to those five items listed in the Schedule.

Paragraph 12 of the re-amended statement of claim alleged infringement by manufacture of the slurry separators in these terms:-

"12. Subsequent to termination of the agreement between the parties and prior to the issue of the Writ herein the First Defendant has manufactured slurry separators wherein the shape and/or configuration of the machinery and each of the component parts thereof identified in the Schedule as aforesaid is exactly or substantially to the design."

(2) Further and Better Particulars.

Farmers Build served two sets of further and better particulars.

The first set of particulars served on 16 August 1996 supplied further details of paragraph 8 of the statement of claim i.e. the claim to design right in the TARGET machine, as distinct from the claim in paragraph 9 to design right in component parts of the machine, as identified in the Schedule. In those particulars Farmers Build made it clear that their case under paragraph 8 was that design rights subsisted in

"Both the shape and configuration of the assembled machinery comprised within the slurry separator, the component parts of which are shown in the diagram annexed to the Statement of Claim, that is to say the overall shape of the machinery as a whole and the configuration of the component parts within the assembly."

Farmers Build stated that it was their case that design right subsisted not " in the design as a whole of the slurry separator" but only in " the machinery comprised within the slurry separator." They also stated that no design right was claimed

"In respect of any component part or thing other than those identified under the numbered points (1) to (4) (later amended to (5)) in the Schedule annexed to the Statement of Claim."

In brief, Farmers Build made a design right claim to the component parts listed in the Schedule and to the assembled machinery comprised within the slurry operator. Hence the reference to "the overall shape of the machinery as a whole" and to " the configuration of the component parts within the assembly."

Farmers Build supplied voluntary particulars of the Statement of Claim on 14 February 1997 under paragraph 9 (not, it should be noted, under paragraph 8) in support of the allegation in that paragraph that a design right existed in the shape and/or configuration of the component parts identified in the amended Schedule. It is necessary to set the particulars out in full in order to understand the judgment under appeal and the detailed arguments on this appeal.

"1. The Plaintiff relies upon the following features in respect of the aforesaid components:-

(i)(a) In respect of the inner hopper (10) and scraper assembly (34), (35) and (36), the flat bottom, steep sides, capacity and the 110 mm outlet hole of the hopper and the spring-loaded hinge on the scraper assembly.

(i)(b) In respect of the bearings (85), throwers (45) and roller guards (61), (63), the situation of the bearings on the outside of the machine in combination with the roller guard assembly and throwers.

(ii) in respect of the outer rollers (5) the combination of the soft and hard rubber as shown in cross-section.

(iii) In respect of the support arms (3) and the spring tension mounting (4), (21), the configuration which allows equal forces to be applied to the rollers on either side of the centre line, minimising distortion of the separator drum, that is to say the situation of the outer rollers mounted on arms that are hinged, from a centrally mounted pivot point at either end of the machine.

(iv) In respect of the lower side cover assembly (64), (65), the design of which allows easy access to the internal parts of the machine most likely to require attention.

(v) In respect of the perforated drum (7) the perforations on the sheet metal comprising the same which end 30 mm short of each edge, thereby significantly strengthening the said drum along the weld join."

(3) The Amended Defence

In paragraph 3 it was expressly denied that

" 3.1 any said slurry separator or any component part thereof was an original design; and

3.2 design right subsisted in any said slurry separator and any component part thereof".

In paragraph 5 it was pleaded that

"... the said separator and components thereof is not an original design within the meaning of Section 213(4) of the Copyright, Designs and Patents Act 1988 (the Act of 1988)."

Trial and Judgment

At the trial, which lasted 7 days, Rattee J heard evidence from Mr Hoare, Dr Mitchell, Mr Gregory, Mr Longley, Mr Hagan and Mr Brinsley. He also heard evidence from two experts who had made a joint report, Mr Geoffrey J Shattock, who gave evidence for Farmers Build, and Mr Garrett, who gave evidence on behalf of Carier. The judge considered that the length and breadth of Mr Shattock's experience in slurry separators gave added weight to his evidence.

The judge stated that it was common ground between the parties that

"........... if Farmers Build was entitled to design right in respect of either of the TARGET separator as a whole, or of all or any of the individual components to which I have already referred , Carier has infringed such design right by making and selling the ROTOSCREEN machine."

In Carier's skeleton argument on this appeal dated 30 September 1998 there is the following statement

"5. There are two concessions made on behalf of Carier which are relevant to the present appeal:

(1) If design right subsists in the whole or any part or combination of parts of the TARGET machine as claimed, it is conceded by Carier that Farmers Build is the proprietor of such design right: and

(2) If design right subsists in the whole or any part or combination of parts of the TARGET machine as claimed, it is conceded by Carier that the ROTOSCREEN machine infringes such design right."

No criticism or comment is made in that skeleton argument of Rattee J's understanding of the common ground between the parties.

In the light of what the judge understood to be common ground between the parties and in view of the concessions, the focus of evidence and argument before the judge and of submission on this appeal has been on the issue of the subsistence of design right in the TARGET slurry separator and the specified component parts.

The judge made findings on each of the individual component parts of the TARGET machine in the light of the expert evidence. Both experts agreed that the ROTOSCREEN machine substantially reproduces all the design changes to which Mr Shattock referred in his evidence. The judge concluded that design right subsisted both in the TARGET machine as a whole and in respect of each of the composite components with two exceptions, namely the outer rollers (5) and the lower side cover assembly (64), (65).

He made a declaration that

" in respect of the design of the separator formerly sold by the Plaintiff and known as the TARGET separator design right subsists in the separator as a whole and in the several composite arrangements of parts thereof identified in the judgment of this Court as follows:

A. Inner hopper (10)

B. Scraper assembly (34,35,36)

C. Bearings (85) and Throwers (48) in combination with the inner roller guards (61,63)

D. Support arms (3) in combination with the spring tension mounting (4,21) and

E. Perforated drum (7) "

[Emphasis added]

The numbers in brackets refer to the identification of the part on a diagram of the machine annexed to the Order of Rattee J.

Although the judge made that declaration of subsistence of design right in favour of Farmers Build, he refused any further relief by way of compensation either as damages or an account of profits. The order states the finding of the judge that

"It was unconscionable for the Plaintiff to claim herein damages or an account of profits."

The judge accepted Carier's submission that it would be wrong to allow Farmers Build to recover from Carier

" .......profits made by it from continued manufacture and sale of the TARGET slurry separator, when it, Farmers Build, both by Mr Hoare and, later, by the liquidator, encouraged Carier and the second defendant to continue to put time and money into developing their business in such manufacture and sale in the belief that Farmers Build had decided not to pursue its claim to infringement of design right. By taking no steps to pursue such claim until 19 January 1996, despite believing as long ago as early 1993 that the Defendants were infringing its rights in respect of the TARGET design and despite the liquidator's raising the possibility of a claim as long ago as May 1994, with an indication that he would write to the Defendants about it, and then failing to do so, Farmers Build lulled the Defendants into a false sense of security. The longer Farmers Build has waited the larger has become its claim for an account of the Defendants' profits."

The judge held that it was unconscionable to make Carier disgorge the profit and so lose the benefit of the business they had built up in the reasonable expectation, encouraged by Farmers Build, that the latter had abandoned any intention to pursue such a claim against them.

The Appeal

There is now before this court

(1) an appeal by Farmers Build against the denial of any compensatory remedy for infringement of the design right which the judge held subsisted in the identified articles.

(2) a respondents' notice from Carier seeking to uphold the judge's decision denying a remedy on further and additional grounds; and

(3) a cross appeal by Carier from the declaration that design right subsisted in the articles identified in the Order.

Two preliminary points should be noted: first, on this appeal each side is represented by leading Counsel who did not appear at the trial; and, secondly, it is common ground that no question arises as to the grant of an injunction since, in accordance with Section 237 of the 1988 Act, the designs (assuming that design right exists in them) are now in the licence of right period. Carier have offered by letter of 17 February 1997, without admission of liability, to take a licence, should they be held to infringe the design right.

Subsistence of Design Right - The Law

Carier contend that the judge was wrong in his ruling on the subsistence of design right in the whole and in the particular parts of the TARGET machine. That contention is based on the provisions in Part III of the 1988 Act, Chapter 1, which confer protection on "original designs." Carier's case is simply that neither the design of the whole of the TARGET machine or of the parts relied on by Farmers Build are "original designs" within the meaning of the relevant provisions.

Section 213 provides:-

" (1) Design right is a property right which subsists in accordance with this Part in an original design.

(2) In this Part "design" means the design of any aspect of the shape or configuration (whether internal or external) of the whole or part of an article.

(3) Design right does not subsist in -

(a) a method or principle of construction,

(b) features of shape or configuration of an article which -

(i) enable the article to be connected to, or placed in, around or against, another article so that either article may perform its function, or

(ii) are dependent upon the appearance of another article of which the article is intended by the designer to form an integral part, or

(4) A design is not " original " for the purposes of this Part if it is commonplace in the design field in question at the time of its creation.

(5)........

(6) Design right does not subsist unless and until the design has been recorded in a design document or an article has been made to the design.

(7) Design right does not subsist in a design which was so recorded, or to which an article was made, before the commencement of this Part.

Section 214(1) provides that

" In this Part the " designer ", in relation to a design, means the person who creates it ".

Section 215 provides that

"(1) The designer is the first owner of any design right in a design which is not created in pursuance of a commission or in the course of employment.

(2) Where a design is created in pursuance of a commission, the person commissioning the design is the first owner of any design right in it.

(3) Where, in a case not falling within sub-section (2) a design is created by an employee in the course of his employment, his employer is the first owner of any design right in the design."

Section 216 states

(1) Design right expires -

(a) fifteen years from the end of the calendar year in which the design was first recorded in a design document or an article was first made to the design, whichever first occurred, or

(b) if articles made to the design are made available for sale or hire within five years from the end of that calendar year, ten years from the end of the calendar year in which that first occurred.

(2) The reference in subsection (1) to articles being made available for sale or hire is to their being made so available anywhere in the world by or with the licence of the design right owner."

There then follow the qualifying requirements for design right protection and for dealings by way of assignment and licence with design right.

The only other provisions relevant to this appeal concern the rights and remedies of the design right owner. They are contained in Chapter II of Part III.

Section 226 deals with primary infringement of design right in these terms-

"(1) The owner of design right in a design has the exclusive right to reproduce the design for commercial purposes -

(a) by making the articles to that design, or

(b) by making a design document recording the design for the purpose of enabling such articles to be made.

(2) Reproduction of a design by making articles to the design means copying designs so as to produce articles exactly or substantially to that design, and references in this Part to making articles to a design shall be construed accordingly.

(3) Design right is infringed by a person who without the licence of the design right owner does, or authorises another to do, anything which by virtue of this section is the exclusive right of the design right owner.

(4) For the purposes of this section reproduction may be direct or indirect, and it is immaterial whether any intervening acts themselves infringe the design right.

(5) ............."

Sections 227 and 228 deal with secondary infringements by the importation of and dealing with infringing articles.

The principal section concerned with remedies of a design right owner is Section 229-

"(1) An infringement of design right is actionable by the design right owner.

(2) In an action for infringement of design right all such relief by way of damages, injunctions, accounts or otherwise is available to the plaintiff as is available in respect of the infringement of any other property right."

Subsequent provisions deal with specific remedies of delivery up and disposal of infringing articles, innocent infringement, the rights and remedies of an exclusive licensee and the exercise of concurrent rights.

Finally, two sections containing exceptions to rights of design right owners in Chapter III are relevant.

Section 236 provides-

" Where copyright subsists in a work which consists of or includes a design in which design right exists, it is not an infringement of design right in the design to do anything which is an infringement of the copyright in that work".

Section 237 provides for the availability of licences of right in the last five years of design right.

" (1) Any person is entitled as of right to a licence to do in the last five years of the design right term anything which would otherwise infringe the design right.

(2) The terms of the licence shall, in default of agreement, be settled by the comptroller."

Further provisions relating to licences of right are contained in Sections 238 and 239.

Issues on Subsistence of Design Right

The issues arising on subsistence of design right fall into two main parts:-

(1) Are the aspects of shape and configuration of articles in which Farmers Build claim design right, "designs" within the meaning of section 213(2) ?

(2) If those aspects are " designs", are they " original" designs?

That question can be conveniently divided into sub-questions-

(a) Are the designs " original " but for the provisions on "commonplace" designs in Section 213 (4)?

(b) If they are original in that sense, were they "commonplace" in the design field in question at the time of creation ?

The answers to those questions of interpretation and application turn on the legislative context of the design right provisions in Part III of the 1988 Act and on a close examination of the language and interrelationship of the detailed statutory provisions, in the light of the authorities.

Design Right - The Legislative Context

Original Design

Subject to the "commonplace " point and to points of detail on the particular parts of the TARGET machine, there is no doubt that the aspects of the shape and configuration of the parts are "original designs" within the meaning of the 1988 Act.

(1) The definition of "design" in Section 213(2) is wide enough to include the shape or configuration of the individual parts of the TARGET machine and of the TARGET machine as a whole: the individual parts, combinations of parts and the parts made up into a whole machine are all "articles" with a shape and a configuration.

(2) The designs are "original" in the sense that they are the independent work of the designer of the TARGET machines: they have not been simply copied by him from the GASCOIGNE or SUDSTALL machine. Aldous J held in C & H Engineering -v- F Klucznik & Sons Ltd [1992] FSR 421 at 427 that "original" in section 213(1) has the same meaning as in the earlier provisions of the 1988 Act relating to copyright in original literary, dramatic, musical and artistic works under Section 1(1)(a). Time, labour and skill, sufficient to attract copyright protection, were expended by Mr Hagan in originating the designs of the individual parts. Similarly, he originated the assembly or combination of those parts in the TARGET machine as a whole. The designs are original in the "copyright sense".

Commonplace Designs

The critical question is whether designs, which are "original" (in the copyright sense) cease to be "original" in the context of design right by virtue of Section 213(4). That stipulates that a design is not original " if it is commonplace in the design field in question at the time of its creation." There are no further definitions in Part III of the 1988 Act relating to the interpretation of the concept of a "commonplace " design.

Mr Watson QC, on behalf of Carier, submitted that all of the parts pleaded, and the combination of parts relied on as constituting the whole of the TARGET machine, are commonplace and therefore not original designs in which design right can subsist.

Take, for example, the inner hopper. Mr Watson QC described the hopper as a funnel shaped chamber or reservoir from which material can be discharged under gravity. Hoppers have long existed as part of agricultural machinery and machinery generally. Mr Watson, consciously or unconsciously echoing Gertrude Stein, said that "a hopper is a hopper is a hopper" and is commonplace. The design variants of such a component are limited. He went as far as to say that it was difficult to conceive of an item which was more commonplace and more unlikely to invite comment.

Similar submissions were made about the scraper assembly, the bearings and throwers in combination with the roller guards, the support arms in combination with spring tension mounting, and the perforated drum. As for design right claimed in the TARGET machine as a whole Mr Watson contended that the result was commonplace, because all that had been done was aptly described as " de-bugging " the various components of two old machines to produce a third p2machine. The parts remained commonplace, even when assembled into the TARGET machine, and the whole was commonplace.

Mr Silverleaf QC, on the other hand, supported the decision of the judge that neither the individual parts nor the machine as a whole could be described as commonplace: the parts, the combinations of parts and the assembly of all the parts into the whole TARGET machine produced a different design from that of the GASCOIGNE and SUDSTALL separators. That new design produced a significantly better machine. The TARGET design excited peculiar attention to those versed in the relevant art, because it was so much better and solved the problems with the SUDSTALL machine which Sudtech had been trying to solve for some time without success. Such designs could not be commonplace. A new and exciting design could be produced out of trite ingredients and the application of the simplest engineering principles. It was not enough for Carier to assert that the designs were not new or novel. They had to show that the designs had nothing out of the common. They had failed to show that.

He further argued that the relevant design field in question was that of slurry separators and that evidence relating to agricultural machinery generally or engineering fields other than slurry separators was irrelevant to the question of what was commonplace within the meaning of Section 213(4).

I agree with Mr Silverleaf's submissions on the commonplace point.

The Authorities

Decisions at first instance have given some guidance on the interpretation of the concept of the "commonplace". In C&H Engineering -v- F Klucznik & Sons (supra) Aldous J (as he then was) observed at page 428 that

"The word " commonplace " is not defined, but this subsection appears to introduce a consideration akin to novelty. For the design to be original it must be the work of the creator and that work must result in a design which is not commonplace in the relevant field."

In Ocular Sciences Ltd -v- Aspect Vision Care Ltd [1997] RPC 289 Laddie J provided guidance on the interpretation of " commonplace" which was followed by Mr Robert Englehart QC, sitting as a Deputy Judge of the Chancery Division, in Philip Parker -v- Stephen Tidball [1997] FSR 680 at 690. It is clear from these authorities that -

(1) The subsection is intended to exclude certain designs which are "original" in the copyright sense.

(2) A decision on whether a design is commonplace or not envisages "some objective assessment ".

(3) The fact that a design is made up of features, which, individually, are commonplace would not necessarily make the design commonplace, provided that the combination is not commonplace.

Laddie J approached this problem both in the light of the state of the law concerning industrial designs before the 1988 Act and the introduction of the concept of the commonplace design in the Semiconductor Products (Protection of Topography) Regulations 1987 (SI 1987 No 1497). They were made to implement the provisions of the EC Directive 87/54/EEC and were replaced by new Regulations in 1989. The 1987 Regulations provided that

"3 (3) A topography is original if it satisfies the requirements of being-

(a) the result of the creator's own intellectual effort (or of the combined efforts of the creators if there are more than one), and

(b) not commonplace among creators of topographies or manufacturers of semiconductor products, or if it consists of a combination of elements in which the combination itself satisfies those requirements irrespective of whether the several elements do"

This Regulation reflected Article 2.2 of the Directive-

"The topography of a semiconductor product shall be protected in so far as it satisfies the conditions that it is the result of its creator's own intellectual effort and is not commonplace in the semiconductor industry. Where the topography of a semiconductor product consists of elements that are commonplace in the semi-conductor industry, it shall be protected only to the extent that the combination of such elements, taken as a whole, fulfils the abovementioned conditions."

In that context Laddie J commented at page 429 that the subsection was intended to exclude designs which are

"trite, trivial, common-or-garden, hackneyed or of the type which would excite no peculiar attention in those in the relevant art."

In that case he held that the designs of the contact lenses were commonplace, being well known and indistinguishable from designs for other lenses available on the market.

That decision and the relevant passages in Laddie, Prescott & Vitoria on the Modern Law of Copyright and Designs (2nd Edition) Volume 1 paragraphs 40.13 to 40.16 discuss the interpretation of "commonplace". The authors comment in 40.13 that

" The exclusion from protection of commonplace designs is of unclear scope.......What counts is whether the design is one which is well known to most in the field. Thus the design of the Statue of Liberty or the Eiffel Tower would be commonplace. The purpose of s 213(4) is to prevent a designer from seeking to monopolise any design which competitors are likely in the normal course of trade and with no wrongful motive to want to adopt in relation to articles of the sort for which he has adopted it. It should not be open to one trader to obtain a monopoly in the use of well-known design concepts. No doubt the courts will be slow to hold as commonplace functional designs which are shown to work significantly better that earlier designs directed to achieve the same function or decorative designs which, because of their appearance, achieve commercial success in competition with pre-existing designs. This does not mean that if a design can be broken down into separate integers, each of which by itself is commonplace, the design as the whole is necessarily commonplace. A meritorious and unusual design may well be created by blending together in a novel way known features."

Subject to reservations about the references to (a) "well known" as the criterion of the "commonplace" (and the two examples of "designs" given as commonplace) and to (b) design right as conferring a "monopoly", I broadly agree with those views.

It is difficult to glean much assistance from sources outside the text of the legislation. Counsel's researches unearthed the following material:-

(1) Dictionary

No question of interpretation can be resolved simply by dipping into a dictionary. It is not the function of lexicographers to construe statutes. In the dictionaries "commonplace " has many synonyms and shades of meaning-

"lacking originality; trite; useful; ordinary; lack of distinction; without novelty;

generally accepted; everyday; usual; undistinguished; frequent; run-of-the-mill;

common; hackneyed; cliche; platitude; triviality; truism. "

They give the general idea, but shed no more light on the meaning of the legislation than do the antonyms-

"Unusual; distinctive; original."

(2) The White Paper

The 1988 Act was preceded by a White Paper (Cmnd 9712) "Intellectual Property and Innovation" presented to Parliament by the Secretary of State for Trade and Industry in April 1986. The section of the White Paper on the protection of unregistered designs (paragraph 3.17 et seq.) considered the proposal that all original designs deserve a period of protection to give the designer a market lead over the copier, provided that the more objectionable features of full copyright protection should be removed. The paper discussed the shorter period of protection, provisions for licences of right and exceptions for certain kinds of design, but there is no discussion of the concept of "commonplace" designs.

(3) Parliamentary Debates

The only debate in Parliament on the Copyright, Designs and Patents Bill which discussed the "commonplace" provision was in the short speeches of Lord Morton of Shuna and Lord Beaverbrook (the relevant Minister). Counsel did not submit that the statements made by Lord Beaverbrook fall within Pepper -v- Hart [1993] AC 593. It is worth quoting from his speech if only to highlight the problem of giving a legally precise meaning to such a vague and imprecise concept. (See 494 HL Official Report col 112,1 March 1988.)

"My Lords, I admit straightaway to the noble Lord, Lord Morton, that the word " commonplace " does not have a precise meaning. Nevertheless we believe that in the context of this Bill it will provide a perfectly comprehensible and workable threshold for design right. In our view the meaning which would be given to the term "original" if this were not qualified - that is, something which is the creator's own work and not a copy - is too generous a test for the acquisition of design right. To put it in an extreme form, it could allow someone to acquire a right for re-inventing - I should really say re-designing - the wheel. Our intention is to avoid giving design right to mundane, routine designs of the kind which are common currency in the particular field in question.

We firmly believe that this kind of threshold is necessary and that the word

" commonplace " will achieve the right result on its ordinary, commonsense

meaning. Of course, if any of your Lordships can think of a better expression

which both achieves the right result and is simple and easily understood, then I am

open to suggestions."

No other suggestions were forthcoming. Lord Morton expressed his (lawyerly) view that the reference to commonplace seemed "totally unnecessary" and his concern that "commonplace" would add to the problems already identified by him as "likely to give rise to much litigation as to what is and what is not commonplace."

(4) The Semiconductors Regulations and Directive

Some reliance is placed on the use of the word "commonplace" in the English language version of the Directive and in the Regulations implementing it. The court asked Counsel for copies of other language versions of the Directive. The parties produced a copy of the French version which, in the passage in Article 2.2 equivalent to that containing "commonplace" in the English language version, reads

" n'est pas courante dans le secteur des semi-conducteurs."

"Courant " is translated in Cassell's French-English Dictionary as

" Running, current; present; usual, ordinary, everyday."

Commonplace Designs - Approach to Interpretation

It is the function of the court to ascertain the effect of Section 213(4) from both the text of the subsection and from its context in the 1988 Act. The aim is to arrive at a meaning which makes sense in cases likely to arise under the legislation.

The process of statutory interpretation does not, however, require the court to supply definitions of words which Parliament has deliberately chosen not to define and which are simple, ordinary words of the English language. It is for the courts to decide whether those words apply to or cover the facts of the case for adjudication.

Courts regularly (and wisely) refuse to make formal and final statements of the meaning of ordinary words and phrases. It is true that there are published lists of words and phrases collected together and described as "Judicially Defined". But the courts are not official lexicographers. Their function is to construe and apply the law to the facts of each case, not to define words. Laddie J was right not to attempt a definition of "commonplace " in the Ocular case. Every attempt to do so is doomed to failure. The only outcome is a list of different words dredged up from the dictionaries. The p2words in the dictionary list have different overtones according to context. It may be positively misleading to substitute one of those dictionary words for the word used by Parliament.

It is more instructive for the court to look wider for indications of the purpose of the provision to be construed and, in particular, to examine the context in which the relevant provision was enacted.

In the case of Section 213(4), there are three indications of the legislative purpose in restricting the protection of design right to original designs which are not "commonplace" in the design field in question:-

(1) The Pre-1988 Law

Before 1988, disputes about the copying of designs of industrially produced functional articles led to a series of cases in which it was established that the copyright in an artistic work, such as a drawing of the design of a functional article, conferred upon the maker of the drawing artistic copyright for the full period of protection, at that time the life of the author and 50 years. That copyright entitled the owner of the right to prevent reproduction of the drawing, either directly or indirectly (eg via a three dimensional article made according to the drawing), or any substantial part of it, whether in two dimensional or three dimensional form. This had widespread repercussions in industry, in particular in the manufacture and supply of spare parts by persons other than the original manufacturer or his licensees, for the purposes of fitting to, or matching, articles designed for and produced by the original manufacturer. The outcome of these cases was not regarded as satisfactory, particularly in the context of competition law and the law of the European Economic Community. Nor was it regarded as satisfactory within the framework of Intellectual Property Law. A Committee, chaired by the Honourable Mr Justice Whitford, was appointed "to consider the Law on Copyright and Designs" and it reported to the Secretary of State for Trade in 1977 (Cmnd 6732). The Committee did not reach a unanimous conclusion in its recommendations on the vexed question of protection for the design of functional articles. There followed the White Paper and the enactment of the 1988 Act.

Comparison of the pre-1988 case law with the provisions in Part III of the 1988 Act suggests that the purpose of introducing the design right was to reduce the extent of protection from copying afforded to the designs of industrially produced articles and, in the case of spare parts, to remove protection from copying completely by express provision (see Section 213(3)(b)). The removal of that protection was not achieved by the "commonplace" provision in Section 213(4). If it had been, there would have been no need for the express "must-fit" and " must-match" exclusions in subsection (3)(b).

(2) Nature of Unregistered Design Right

Although it has been suggested that the unregistered design right in Part III of the 1988 Act is a conceptual cocktail of copyright and registered designs, it is plainly a right in the nature of copyright: the only exclusive right conferred is restricted to the copying of the design. Although Mr Watson occasionally lapsed in oral submissions, as well as in his skeleton argument, into calling it a "statutory monopoly", it is not a monopoly right in the same sense as patents or registered designs, where innocence and coincidental similarity of result in independent creation are no defence to liability for infringement. The monopolies formally granted after official scrutiny under the Patents Act and the Registered Designs Act provide a radically different kind of protection than does copyright informally acquired by the very act of creation. The purpose of copyright and of design right is not to protect the "novelty" of the work against all competition; it is to provide limited protection against unfair misappropriation of the time, skill and effort expended by the author or designer on the creation of his work.

In some respects unregistered design right is different from artistic copyright: its duration is shorter (10 years from sale of the article instead of life of the author and 70 years from the death of the author of an artistic work); the protection from copying is more restricted (copyright protects an artistic work from being reproduced not only in its entirety but also in respect of any substantial part of it-design right is protected from reproduction which is substantially similar).

Those differences do not, however, make unregistered design right more like a registered design than like copyright. There are more significant differences between unregistered designs and registered designs. In particular, the latter,which are of longer duration (maximum 25 years), do not protect the shape or configuration of a design which is dictated solely by the function which it has to perform. Functional designs may be protected as unregistered designs, which are not limited to designs which appeal to the eye or have aesthetic qualities.

The shorter life of the design right, the narrower scope of protection against copying and the prima facie protection given by it to designs of functional articles are indications that the reference to "commonplace" designs in Section 213(4) should be interpreted narrowly rather than broadly. The fact is that very many designs of functional articles which fall within the definition of a " design " are likely to be "commonplace" if that term is construed broadly in the sense of "well known".

(3) The Concept of Novelty

It is agreed that "commonplace" in Section 213(4) must be given some limiting or exclusionary effect on the designs to be regarded as original. It would be wrong to regard the concept of the "commonplace " design as having the same effect as superficially similar concepts of intellectual property which were available for use in the context of design right, if Parliament had wished to use them. For example, a design can only be registered if it is "new". If it had been intended to impose a "novelty" requirement for the subsistence of design right, Parliament would have had recourse to the novelty concept employed in registered designs legislation since the mid-19th century.

Section 213(4) is not an indirect imposition of novelty as a condition for the subsistence of design right. In this context commonplace does not mean " not novel." It is also inappropriate to apply in this context related concepts of registered design and patent law, such as "variants commonly used in the trade" (Section 1(4) Registered Designs Act 1949) and "the state of the art".

The overall purpose of the provision was not to impose a requirement of novelty in order to secure the limited protection enjoyed by unregistered designs, but to guard against situations in which even short term protection for functional designs would create practical difficulties. Substantial similarity of design might well give rise to a suspicion and an allegation of copying in cases where substantial similarity was often not the result of copying but an inevitable consequence of the functional nature of the design. All that is meant by "original designs" in the context of s. 213 is (a) that the design for which protection is claimed must have been originated by the designer in the sense that it is not simply a copy by him of a previous design made by someone else (like a photocopy) and (b) that where it has not been slavishly copied from another design, it must in some respects be different from other designs, so that it can be fairly and reasonably described as not commonplace. The context is important. Design right, like copyright, is informally acquired and affords weaker protection, as only copying is actionable. Copying may be inferred from proof of access to the protected work, coupled with substantial similarity. This may lead to unfounded infringement claims in the case of functional works, which are usually bound to be substantially similar to one another. On the other hand, a registered design, like a patent, is a stronger right, is harder to obtain, but it is vulnerable to challenge on the ground that it is lacking in novelty and it would not be novel if it was well known and used by others. To introduce a requirement of novelty into unregistered designs would effectively remove from the limited new right a large measure of the protection that the right must have been intended to confer on designers to protect their work from plagiarism. It cannot have been the purpose of section 213(4) to take away by one provision all the protection given by another.

Commonplace-Conclusion

In the light the language, context and purpose of section 213(4), what is the proper approach of the court faced with the issue that the design of an article is not original because it is alleged to be "commonplace" ?

(1) It should compare the design of the article in which design right is claimed with the design of other articles in the same field, including the alleged infringing article, as at the time of its creation.

(2) The court must be satisfied that the design for which protection is claimed has not simply been copied (e.g. like a photocopy) from the design of an earlier article. It must not forget that, in the field of designs of functional articles, one design may be very similar to, or even identical with, another design and yet not be a copy: it may be an original and independent shape and configuration coincidentally the same or similar . If, however, the court is satisfied that it has been slavishly copied from an earlier design, it is not an "original" design in the "copyright sense" and the "commonplace" issue does not arise.

(3) If the court is satisfied that the design has not been copied from an earlier design, then it is" original" in the" copyright sense". The court then has to decide whether it is "commonplace". For that purpose it is necessary to ascertain how similar that design is to the design of similar articles in the same field of design made by persons other than the parties or persons unconnected with the parties.

(4) This comparative exercise must be conducted objectively and in the light of the evidence, including evidence from experts in the relevant field pointing out the similarities and the differences, and explaining the significance of them. In the end, however, it is for the court and not for the witnesses, expert or otherwise, to decide whether the design is commonplace. That judgment must be one of fact and degree according to the evidence in each particular case. No amount of guidance given in this or in any other judgment can provide the court with the answer to the particular case. The closer the similarity of the various designs to each other, the more likely it is that the designs are commonplace, especially if there is no causal link, such as copying, which accounts for the resemblance of the compared designs. If a number of designers working independently of one another in the same field produce very similar designs by coincidence the most likely explanation of the similarities is that there is only one way of designing that article. In those circumstances the design in question can fairly and reasonably be described as "commonplace". It would be a good reason for withholding the exclusive right to prevent the copying in the case of a design that, whether it has been copied or not, it is bound to be substantially similar to other designs in the same field.

(5) If, however, there are aspects of the plaintiff's design of the article which are not to be found in any other design in the field in question, and those aspects are found in the defendant's design, the court would be entitled to conclude that the design in question was not "commonplace" and that there was good reason for treating it as protected from misappropriation during the limited period laid down in the 1988 Act. That would be so, even though the design in question would not begin to satisfy any requirement of novelty in the Registered Designs legislation.

The decision of Rattee J is consistent with this approach.

The Target Machine

On behalf of Carier, Mr Watson QC made the overall submission that the judge was wrong to hold that design rights subsisted either in the TARGET slurry separator as a whole or in the individual parts for which protection was claimed. He submitted that the TARGET separator and parts were all copied from the GASCOIGNE and SUDSTALL machines and were therefore not original and were commonplace in the design field in question.

Mr Watson's QC detailed submissions can best be dealt with under the individual items.

1. Inner Hopper (10)

This is within the perforated drum. It collects the dirty liquid which passes through the perforations in the drum and passes it out through a pipe.

The judge held that the shape of the inner hopper was significantly different in the TARGET machine and that materially improved its efficiency.

Mr Watson QC attacked this conclusion contending, by reference to the pleadings and the transcript of evidence, that the shape of hopper was only one of three standard shapes for hoppers. This one was a V shaped, steep sided, flat bottomed hopper with a standard outlet. Its shape was "not significant", "not critical, " mundane ", "unimportant" in detail " and " nothing special ". He said that the pipe was " standard." Comparison with drawings of the GASCOIGNE and SUDSTALL hoppers show that the design variants are limited. Section 213(4) operated to exclude the design of the inner hopper from protection. The judge ought to have held that the design was commonplace.

I disagree. The evidence was that Mr Hagan designed the shape of the hopper to be different from the hopper on the GASCOIGNE and SUDSTALL machines. It was different in shape and configuration: the angles of the sides, the width of the bottom, the shape of the end plates and the different position of the outlet. It may be true to say that the hopper, as an article , is commonplace. This was Mr Watson's theme on a number of the articles. But the legislation does not confer the design right on the article: the design right is conferred on the aspect of the shape and configuration of the article. A commonplace article may have a shape and configuration which is not commonplace. The nature or character of the article must not be confused with the aspects of shape and configuration of the article. Design right does not, for example, subsist in a fork: it subsists in an aspect of the shape and configuration of the handle or the prongs of a fork.

2. Scraper Assembly (34,35,36)

This part of the TARGET machine scrapes the slurry from the inner surface of the perforated drum. The judge held that the "design of the spring loaded " scraper assembly of the TARGET machine is unique and plays a significant role in the efficient operation of the machine.

On this point I agree with Mr Watson QC that the judge was wrong to find that Farmers Build were entitled to an unregistered design. The judge's conclusion on the scraper assembly was based on the uniqueness of the "spring loaded hinge." But no claim for a design right in the spring loaded hinge was pleaded and no originality in the shape or configuration of it has been identified. The spring was in evidence and it may be, as Mr Silverleaf QC contended, relevant to the design of the scraper in the sense that it contributed to the design process. But, in the absence of a properly pleaded claim to a design right in the spring, the judge was not entitled to find in favour of Farmers Build on this part. In the absence of any pleading in relation to the design of the spring, it was not subject to detailed comments from the experts in their report and was not dealt with in cross examination.

This claim highlights the importance in design right cases for the plaintiff to identify as precisely as possible what he claims to be his original design. The burden is on the plaintiff to identify (a) the relevant aspects of the shape and configuration of the article and (b) what is original about the design. The evidential burden shifts to the defendant to allege and to adduce evidence showing that, although a design is original in the sense that the designer originated it, it is commonplace in the field in question. But the legal burden remains on the plaintiff throughout. That legal burden has not been discharged in the case of this part.

3. The Bearings (85) and throwers (48) in combination with Inner Roller Guards (61,63).

The judge held that design right subsisted in the unique combination of the bearings (which were bought in ready made from outside suppliers and positioned on the outside of the TARGET machine to minimise corrosion by contact with the slurry) and of the throwers and of roller guards.

Mr Watson QC criticises this conclusion, contending that there was nothing

" interesting "or "special" about the guards that the standard thrower at the end of the roller was just an "added expedient", and that protection was being claimed for an idea rather than for an original design of an article. All in all, he said that this was a commonplace expedient for a standard purpose and there was nothing unusual or exceptional about it. In the SUDSTALL machine the bearings were also positioned on the outside. The shape of the inner roller guards was determined by what they had to fit round in the machine

I disagree. On the evidence the combination of these parts produced a design, which was original and was not commonplace. Earlier separators had not used this combination. The design right was claimed only for the shape and configuration of the combination and not for the combination as an engineering concept. The guards may themselves be commonplace articles, but design right was not claimed in the guards as such or in the throwers as such , but in the shape or configuration of the unique combination: that was not commonplace in the field of slurry separators.

4. Support arms (3) in combination with spring tension mounting (4,21).

The judge held that the shape and position of the arms supporting the outer rollers were completely different and were unique to the TARGET machine. Design right was claimed for the combination of the support arms and the spring tension mounting.

Mr Watson QC submitted that the support arms were just "support arms" and that the spring was copied from the SUDSTALL machine and was not original. Although it was different in that its depiction in the drawings was upside down, there was no evidence of an improvement to the TARGET machine and the features were not part of any pleaded case nor did the combination amount to more than a trite or commonplace result. The judge appeared to have decided this part of the case on the basis of a test encountered in some patent infringement cases, the test of commercial success. But that was not the correct approach. The claim was really based on the central pivot "nut cracker" : that was not a shape, but an idea for a method of operation. That could not qualify as an original design.

In my view, the judge was entitled to find on the evidence that this design was original and not commonplace. The combination did not look the same in shape or configuration as the equivalent parts of the SUDSTALL and GASCOIGNE machines. Only the spring was not different. The combination was different.

5. Perforated Drum (7).

This is a revolving drum made of perforated metal to allow liquid to pass through it. The judge found that it was an original design, as it had an unperforated margin or border (30 mm) broader than the SUDSTALL machine (25 mm) and that that increase in width provided significant strengthening.

Mr Watson QC pointed out that there was also a border or margin on the GASCOIGNE and SUDSTALL machines and asserted that that was no novelty: it was a commonplace design feature. The increase in the width of the border made no difference to the shape or configuration. Even if it had, it did not make the design other than a commonplace one. There was no evidence that the pre-TARGET machinery failed at the margin because the margin was not wide enough. There was no evidence of the significance of width of the margin.

In my view, the judge was entitled to find that the design of the perforated drum was not commonplace. There was evidence that the margin on the TARGET machine was widened to stop the drum from fracturing. That was a feature of shape and configuration which was not commonplace.

TARGET Machine as a Whole

The judge accepted the evidence of Mr Shattock on the overall effect of individual modifications to the design of the earlier GASCOIGNE and SUDSTALL machines. He held that

(1) The TARGET machine as a whole was a new machine, different in significant respects of any of its predecessors. The TARGET machine was "an article " made to " a design ".

(2) The design by Mr Hagan, incorporating additional design features to the best features of the GASCOIGNE and SUDSTALL machines, was " as a whole " original. No previous machine had been made to that design. The overall design in question of the TARGET machine had not been copied: it was Mr Hagan's independent work and was original.

(3) The design of the whole TARGET machine was not " commonplace " in the field of slurry separators. There was no other machine like TARGET.

(4) With the exception of the outer rollers (4) and the lower side cover assembly (6), which fell within the exceptions to design right in Section 213(3), design right existed in relation to the composite components, even though not in relation to all the individual parts.

I reject Mr Watson's contention that there was no design right in the whole of the TARGET machine. It is true that design right may not exist in the whole of the TARGET machine in the sense of the shape or configuration of each and every part of the whole machine. For example, in these proceedings Farmers Build have only claimed design right in parts and in combinations of parts which make up a small part of the entire machine. But that does not prevent there being a design right in the overall shape and configuration of the combination of parts which make up the whole. A whole assembly of parts, even if all the individual parts are commonplace, is not itself commonplace if the result is to produce a slurry separator of an overall design different from the overall design of other slurry separators. The position is that there were detailed design changes in a number of the parts. The combination of those parts, even with other parts in which Farmers Build do not claim any design right, produced a whole which could properly be regarded as an original design of an article which was not commonplace.

Acquiescence and Remedies

The judge accepted Carier's contention that the claims against them for damages or an account of profits were barred by acquiescence. He relied on the decision in Taylors Fashions Ltd -v- Liverpool Victoria Trustees Company [1982] QB 133 at 151 H.L, approved by the Court of Appeal in Habib Bank Ltd v Habib Bank AG Zurich [1982] RPC 1 at 36 and applied in a case of copyright infringement and breach of contract in Film Investors Overseas Services SA v The Home Video Channel Ltd [1997] EMLR 347 at 365.

The judge's approach was that when Mr Hoare first believed that Farmers Build's rights were being infringed by the Carier ROTOSCREEN machine, he decided to wait and see how that machine prospered. It was argued that the attitude of Mr Hoare fostered the belief by Carier that they could freely develop their business in the ROTOSCREEN machine. Even when the liquidator of Farmers Build raised the possibility of a claim with Dr Mitchell in May 1994 he failed to get back to him as he had indicated he would. Carier continued to manufacture and market the ROTOSCREEN machine and, as no steps were taken to pursue the claim, were encouraged to continue to put time and money into developing their business. The judge concluded, in these circumstances, that it would be unconscionable to make Carier disgorge the profit and lose the benefit of the business built up by them in the reasonable expectation, encouraged by Farmers Build, that Farmers Build had abandoned any intention to pursue the claim against them.

Mr Watson QC sought, for reasons set out in a respondents' notice, to support this surprising conclusion. He reminded the court that from September 1992 Farmers Build knew that Carier were intending to sell TARGET separator machines under their own name; that from April 1993 Farmers Build knew that Carier were openly attempting to sell a machine very similar to the TARGET machine; that no complaint was made by Farmers Build until the liquidator's meeting in May 1994 and even then no details were supplied; and that Carier were open about selling the ROTOSCREEN machine and stated that intention in the letter terminating the agreement. He added that Carier did not believe they were infringing any rights. They did not believe that the allegation of infringement would be pursued after the liquidator had failed to follow it up.

The position was that a decision had been made earlier by Mr Hoare not to complain, but to wait and see how the sales of the new separator fared. That was a case of acquiescence.

I am unable to accept these submissions. Their effect is that Farmers Build were not entitled to compensation for infringement even after the issue of the proceedings. That cannot be right.

The position is that Farmers Build brought their proceedings for infringement within the limitation period. The pleaded case and the evidence did not establish any reliance by Carier on any representation or conduct of Farmers Build inducing a reasonable belief in Carier that the design rights did not exist or would not be enforced, so as to prevent Farmers Build from enforcing their legal rights within the limitation period. The effect of the judgment was that delay in bringing the proceedings meant that a claim was as good as statute barred, even before the expiration of the limitation period.

There was no evidence to support the judge's conclusion that Farmers Build had in any way encouraged Carier to continue to put time and money into developing their business in the belief that Farmers Build had decided not to pursue a claim for infringement of design right. There was no evidence that Farmers Build had lulled Carier into a false sense of security or into thinking that Farmers Build had abandoned any intention to pursue a claim against them.

The true position on the evidence was that Carier knew or ought to have known after the determination of the agreement of 1 June 1992 that they did not own any of the designs of the TARGET machine and that any machine made by them including the design might infringe the rights of Farmers Build. Farmers Build had twice intimated to Carier their belief that Carier were infringing their unregistered design right, but Farmers Build had not created any expectation that Carier would not be sued and Carier had not relied on any expectation. There was no evidence that Carier relied on Farmers Build's failure to sue in 1993 or after the visit of the liquidator in May 1994. There was no ground on which any conclusion could be reached that Farmers Build were estopped from pursuing their legal remedies for compensation.

As a matter of law the judge was wrong to hold that standing by and taking no steps to pursue a claim for infringement of unregistered design made it unconscionable for Farmers Build to claim an account of profits or an inquiry as to damages: see Electrolux -v Electrix (1953) 71 RPC 23 at 24.

Mr Watson QC recognised the difficulties in upholding the decision on this point. He accepted that mere delay in starting proceedings after gaining knowledge of infringement was insufficient in law to disentitle a plaintiff, whose intellectual property rights were infringed, from seeking to recover compensation in the form of damages or an account of profits. He accepted that it is not inequitable for a plaintiff simply to stand by. He is entitled to do so without prejudicing his legal right to bring proceedings for compensation before the expiration of the limitation period.

Conclusion

I would therefore

(1) Allow the appeal on the acquiescence point ; but

(2) Dismiss the cross appeal on the design right point, save as to the scraper assembly (34,35,36)

SIR CHRISTOPHER SLADE:

I have had the advantage of reading the judgment of Mummery LJ in draft. For the reasons given by him, I too would dismiss the cross-appeal on the design right point, save as to the scraper assembly. I also agree that the appeal should be allowed on the acquiescence point, but, since we are differing from Rattee J in this context, I shall add a few observations of my own.

S.229(1) of the Copyright, Designs and Patents Act 1988 renders an infringement of design right a statutory tort actionable by the design right owner. S.2(1) of the Limitation Act 1980 prescribes for the bringing of an action founded on tort a limitation period expiring six years after the date on which the cause of action accrued. Where the infringement is a continuing one or is repeated, it will give rise to a fresh cause of action so long as it continues or on each repetition. In the present case it is not suggested that Farmers Build’s claim is statute-barred. S.36(2) of the Act of 1980, however, provides that “nothing in this Act shall affect any equitable jurisdiction to refuse relief on the ground of acquiescence or otherwise.” In this context, on this appeal, everything turns on what constitutes “acquiescence”.

Mr Watson QC candidly conceded that the mere fact that Farmers Build knew that their design rights were being infringed, and with such knowledge took no action to prevent such infringement until 1st February 1996, would not by itself suffice to constitute acquiescence for this purpose. In my judgment this concession was clearly rightly made. Parliament, in ordaining a specified period of time within which an action to seek a remedy for a specified category of wrong must be brought, has indicated its intention that the injured party shall ordinarily be at liberty to bring his action at any time within that period. To hold that mere knowledge of the wrong by itself deprives the injured party of such liberty would frustrate such intention.

Mr Watson accepted that to establish acquiescence in the present case, something more than knowledge would have to be shown. As I understood his argument, the additional factor on which ultimately he principally relied was that after April 1993 Farmers Build continued to trade with Carier, notwithstanding its knowledge that Carier were attempting to sell on their own account ROTOSCREEN slurry separators of the type which Farmers Build had seen at the April 1993 “Muck Show”.

In my judgment this did not suffice to constitute acquiescence. The essential elements of the plea of acquiescence, when advanced as an equitable defence are described thus in Halsbury’s Law of England (4th Edition, Reissue) vol.16 Title “Equity” para 924 (which is supported by a number of references to authority):

"The term ´acquiescence’ is ... properly used where a person having a right and seeing another person about to commit, or in the course of committing, an act infringing that right, stands by in such a manner as really to induce the person committing the act or who might otherwise have abstained from it, to believe that he assents to its being committed; a person so standing by cannot afterwards be heard to complain of the act. In that sense the doctrine of acquiescence may be defined as quiescence under such circumstances that assent may reasonably be inferred from it, and is no more than an instance of the law of estoppel by words or conduct ... "

Similarly in Goldsworthy v Brickell [1987] Ch 378 at p.410 Nourse LJ described acquiescence in its proper sense as involving “a standing by so as to induce the other party to believe that the wrong is assented to”.

In the present case we have been referred to no evidence suggesting that Farmers Build’s fairly modest delay in instituting proceedings or any other conduct on their part led Carier to believe that the infringement of Farmers Build’s design rights was being assented to or that Farmers Build’s inactivity or other conduct caused Carier to act to its detriment in any way. In the absence of such evidence, the essential elements of a plea of acquiescence cannot in my judgment be established.

It is to be observed that in both cases referred to by Rattee J in this context detriment to the successful party caused by the other party’s conduct sufficient to give rise to an estoppel was shown or could readily be inferred: (see Taylors Fashions Ltd v Liverpool Trustees Co. [1982] QB 133 at p.158 E; Habib Bank Ltd v Habib AG Zurich [1981] 1 WLR 1265 at p.1287 B-E).

The alleged acquiescence on the part of Farmers Build giving rise to no kind of estoppel cannot in my judgment be held to have precluded them from exercising their right to bring proceedings within the statutory limitation period.

I would concur in the Order proposed by Mummery LJ.

LORD JUSTICE SIMON BROWN: I agree with both judgments and have nothing to add.

Order: Appeal allowed with costs. Cross-appeal dismissed. Leave to appeal was refused [Not part of approved judgment]