Contract - contractual promise not to deal in chair pads coming within the scope of the registration of a design whilst the design remained on the Register - whether promises not to infringe what in fact is an invalid design contravene public policy.

Designs Amendment Act 1981

In re Wolanski's Registered Design [1953] HCA 72; (1953) 88 CLR 278

In the Matter of Wingate's Registered Design (1934) 52 RPC 126

Stratford Auto Components Ltd. v Britax (London) Ltd. (1961) RPC 197

Rosedale Associated Manufacturers Ltd. v Airfix Products Ltd. (1957) RPC 239

A. Pressler & Co. Ltd. v Gartside & Co. (of Manchester) Ltd. (1933) 50 RPC 240

Commonwealth Industrial Gases Ltd. v M.W.A. Holdings Pty. Ltd. [1970] HCA 38; (1970) 44 ALJR 385

Le May v Welch (1884) 28 Ch D 24

Simmons v Mathieson & Co. Ltd. (1911) 28 RPC 486

Phillips v Harbro Rubber Company (1919) 36 RPC 79

Macrae Knitting Mills Ltd. v Lowes Ltd. [1936] HCA 43; (1936) 55 CLR 725

Sebel & Coy. Ltd.'s Application (No. 1) (1959) RPC 12

Sebel & Coy. Ltd.'s Application (No. 2) (1959) RPC 19

D. Sebel & Co. Ltd. v National Art Metal Co. Pty. Ltd. (1965) 10 FLR 224

Britvic Ltd.'s Application (1960) RPC 201

Lear v Adkins [1969] USSC 152; 395 US 653 (1969)

Troxel Mfg. Co. v Schwinn Bicycle Co. 465 F2d 1253 (1972)

Dart Industries Inc. v The Decor Corporation Pty. Ltd. (1989) AIPC 90-569

Turbo Tek Enterprises Inc. v Sperling Enterprises Pty. Ltd. (Full Court of Federal Court, 25 July 1989, unrep.)

the Applicant: Miss I. Ryan

Instructed by: Messrs. J.A. Meagher & De Coek

Counsel and Solicitors for First Mr T.K. Tobin QC and

and Second Respondent: G. O'L Reynolds Esq (on 18 August

and 5, 6 September 1989)

Instructed by: Messrs. Maurice Freidman & Co.

Upon the Cross-Claim, the Register of Designs should be rectified by expunging the entry of the registration of Designs Nos. 91598 and 103497.

The applicants are to pay the costs of the respondents of the Application and the Cross-Claim.

Note: Settlement and entry of orders is dealt with by Order 36 of the Federal Court Rules.

The principal issues in these proceedings arise under the Designs Act 1906 ("the Act"). The applicant is registered proprietor of two designs registered pursuant to provisions of the Act. It alleges infringement by the respondents, and they, by their Cross-Claim, allege invalidity. One registration ("the first design") is numbered 91598 and the other ("the second design") is numbered 103497. The article in respect of which each design is registered is described in the relevant Certificate of Registration as "chair pad". The statement of monopoly for the first design is as follows:

"Those features of the representations in

respect of which the applicant for

registration of the design wishes to

claim a monopoly are the features of

shape and configuration."

The statement for the second design is identical save for the addition of the concluding words "in combination". No reference is made to features of pattern or ornamentation. There is no statement of novelty in respect of either of the designs; see sub-s. 20 (5).

2. Annexed to these reasons and marked respectively "A" and "B" are copies of the representations of the first design and the second design, which are attached to the Certificates of Registration.

3. The application for registration of the first design was lodged on 23 August 1984. That is the date upon which the registration of the design is deemed to have come into force: sub-s. 27A (1). The registration was entered in the Register maintained under the Act on 27 February 1986 and, without more, the registration would have ceased to be in force on the expiration of a period of 12 months commencing on that date: sub-s. 27A (1). However, pursuant to further provisions in s. 27A, the period of registration of the first design has been extended, and the registration is still current.

4. The application for registration of the second design was lodged on 19 July 1988. The Certificate of Registration is dated 23 March 1989. The registration of the second design is deemed to have come into force on that application date, but it remains in force only so long as the registration of the first design remains in force, and for no longer. This is the result of the application to the second design of the provisions of s. 25D of the Act. Sub-sections (1), (2) and (3) thereof are as follows:

"25D. (1) Where -

(a) a design (in this section

referred to as the 'original

design') has, whether before

or after the commencement of

this section, been registered

in respect of an article; and

(b) the person registered as the

owner, or all persons

registered as owners, of the

design makes, or make jointly,

an application -

(i) for registration of that

design, or of another

design that is an obvious

adaptation of that

design, in respect of

another article; or

(ii) for registration, whether

in respect of the same

article or another

article, of a design that

differs from the

registered design only in

immaterial details or in

features commonly used in

the relevant trade,

the application shall not be

refused, and the registration

made on that application is

not invalid, by reason only of

the previous registration, or

of any publication or use,

after the priority date in

respect of the application for

the previous registration, of

the design registered on that

application.

(2) Where a design is registered by

virtue of sub-section (1), the design

becomes a design to which this

section applies.

(3) The registration of a design to which

this section applies shall be deemed

to have come into force on the date

on which the application for

registration of the design was lodged

under this Act and shall remain in

force so long as the registration of

the original design remains in force,

and no longer."

5. The reference in sub-s. 25D (1) to "the priority date" in respect of the application for the first design is, in the circumstances of this case, a reference to the date on which the application was lodged, that is to say 23 August 1984: sub-s. 21 (2). Section 25D was relied upon to obtain the registration of the second design on the footing that what was sought was registration in respect of the same article (namely a chair pad) of a design that differed from the first design only in immaterial details or in features commonly used in the relevant trade: sub-s. 25D (1) (b) (ii). The result is that whilst the second design registration has a shorter life than that of the first design, because it will remain in force no longer than the first design registration, the second design is not invalid by reason only of the earlier registration of the first design or by reason of any publication or use of the second design after 23 August 1984, the relevant priority date. That priority date is of importance to issues going to the validity of both of the designs.

6. There is an admission upon the pleadings that prior to 19 April 1989, the respondents and each of them have manufactured or procured the manufacture of cushion pads, examples of which have become Exhibits B and C in these proceedings, and that the respondents and each of them have offered for sale and sold for the purpose of resale substantial quantities of those cushion pads to retailers including "My House", "Grace Bros." and "Freedom Furniture". Exhibits B and C have five "tufting" points, each with straight, not circular, stitching; the significance of this will later appear.

7. The evidence establishes that the first and second respondents commenced trading in soft furnishings about 10 years ago; their businesses currently comprise manufactur- ing, importing, exporting and selling by wholesale to retailers, cushions, chair pads and bean bags. The respondents distribute their products throughout Australia and have agents appointed in every State of Australia. Their principals include Mr. and Mrs. David, both of whom gave evidence.

8. The applicant has conducted its business since about 1976. Its principals include Mr. and Mrs. Rapee, who both gave evidence. From the period commencing 1 July 1988, the applicant has sold large numbers of items in the shape and configuration of the first design. The purchasers have included a number of major department stores and retailers, such as Myer Stores Limited, Coles, David Jones (Australia) Pty. Limited and Woolworths Limited. At the date of commencement of these proceedings, the applicant had not commenced to manufacture or to import items bearing the second design but it has been the intention of the applicant to do so, and to have the items available for sale during the coming Christmas season.

9. Both the applicant and the respondents conduct some manufacture in Australia, but in varying degrees rely on imported supplies.

10. The proceedings were commenced by Application filed 20 April 1989, and upon the matter coming before me on 26 April 1989, certain undertakings were given to the Court by each party and directions were given to have the matter ready for an early final hearing.

11. As I have said, the applicant alleges infringement of each of the designs and by their Cross-Claim, the respondents seek the expungement of the designs from the Register. They rely both upon s. 32 of the Act (which provides that in an action for infringement the defendant may apply by way of counter-claim for the rectification of the Register by expunging the registration sued upon) and upon sub-s. 39 (1) (b) (which empowers this Court, on the application of any person aggrieved, to order rectification of the Register by expunging any entry wrongly made in the Register or wrongly remaining on the Register). The Registrar of Designs indicated that he did not wish to be heard by the Court in this matter, but he drew attention to sub-s. 39 (3) which provides that an office copy of any order under s. 39 shall be served upon him, and that the Registrar shall upon receipt of the order take such steps as are necessary to give effect to the order.

12. The applicant does not base its case solely on infringement of the designs. There were dealings between the parties before the institution of these proceedings and it is from these that the applicant propounds a contract between it and the first respondent, breach of which is then alleged. Paragraph 6A of the Amended Statement of Claim is in the following terms:

"6A. (a) On or about 17 March 1987 a written

agreement and undertaking was

concluded between the applicant and

the first respondent.

(b) It was an express term and condition

of the said agreement and undertaking

that the first respondent would not

import or otherwise deal in chair

pads coming within the scope of (the

first design) for so long as it

remained in force.

(c) The acts of the first respondent (in

manufacturing or procuring the

manufacture of the cushion pads

exhibits B and C and the offering for

sale and selling of those cushion

pads for the purpose of resale) were

carried out and performed by the

first respondent in breach of its

agreement with an undertaking to the

applicant in a document described in

paragraph 6A (a) above."

The agreement and undertaking is stated to have been executed under common seal of the applicant and the first respondent on 17 March 1987. The document in question thus pre-dated the second design, the application date of which was, as I have indicated, 19 July 1988. The document is headed "AGREEMENT AND UNDERTAKING", and the recitals and operative provisions are in the following terms:

"WHEREAS J. RAPEE & CO. PTY. LIMITED (hereinafter

referred to as RAPEE) is the Registered Proprietor

of Australian Registered Design No. 91,598, in

respect of 'A CHAIR PAD' and WHEREAS KAS CUSHIONS

PTY. LTD. (hereinafter referred to as KAS) imported

into Australia and sold a quantity of chair pads

which RAPEE allege was in infringement of the

registration and WHEREAS the parties have agreed to

settle the matter under the terms and conditions

appearing hereinafter, now it is hereby agreed as

follows:-

(1) KAS shall cease the further import and sale

of the offending chair pads.

(2) RAPEE shall purchase from KAS its present

stock of offending chair pads, amounting to

1873 chair pads in all, for a purchase price

of $2.10 each.

(3) RAPEE shall take no action against KAS for

infringement of the registration in relation

to the aforesaid import of the offending

chair pads and their sale in Australia prior

to the 6th of February, 1987.

(4) KAS shall undertake and hereby undertakes

not to import or otherwise deal in any

further chair pads coming within the scope

of Registration 91,598 for so long as it

remains in force."

It is clause (4) which founds the allegation in para 6(A) (b) of the Further Amended Statement of Claim. The provision relied upon thus in terms is directed to further chair pads "coming within the scope" of the first design "for so long as it remains in force".

13. In order to appreciate the grounds upon which the cases on infringement and invalidity are put, it is appropriate first to set out several of the relevant provisions of the Act.

14. Sub-section 4 (1) contains the following definition of design.

"'Design' means features of shape,

configuration, pattern or ornamentation

applicable to an article, being features

that, in the finished article, can be

judged by the eye, but does not include a

method or principle of construction."

Section 18 deals with the inclusion of functional features. It provides:

"18. An application for registration of a design

shall not be refused, and a registered

design is not invalid, by reason only that

the design consists of, or includes,

features of shape or configuration that

serve, or serve only, a functional purpose."

A design shall not be registered unless it is "a new or original design". The subject is relevantly dealt with in sub-ss. (1) and (1A) of s. 17:

"17. (1) Subject to this Act, a design shall

not be registered unless it is a new

or original design and, in

particular, shall not be registered

in respect of an article if the

design -

(a) differs only in immaterial

details or in features

commonly used in the relevant

trade from a design that,

before the priority date in

respect of the application for

registration, was registered,

published or used in Australia

in respect of the same

article; or

(b) is an obvious adaptation of a

design that, before the

priority date in respect of

the application for

registration, was registered,

published or used in Australia

in respect of any other

article.

(1A) For the purposes of sub-section (1),

account shall not be taken of any

secret use.

. . ."

15. By their Cross-Claim, the respondents allege, of each of the designs, that (i) the design comprises a method or principle of construction, (ii) the design does not relate to a new or original design (i.e. as provided in sub-s. 17 (1)) or, as it also was put, the design was in the public domain, and had been published and used in Australia before the priority date, (iii) the design differs only in immaterial details or in features commonly used in the trade from a design that before the priority date was published or used in respect of the same article (i.e. as provided in para. 17 (1) (a)), and (iv) the design is an obvious adaptation of a design that before the priority date was published or used in Australia in respect of another article (i.e. as provided in para 17 (1) (b)).

16. The owner of a registered design has a monopoly in that design: s. 25. The term "monopoly" means "the exclusive right to apply the design to an article in respect of which the design is . . . registered": sub-s. 4 (1). If any person infringes the monopoly in a registered design, the owner of the design may bring an action or proceeding for infringement of the monopoly in the design: sub-s. 30 (2). The concept of infringement is elaborated by the "deeming" provisions of sub-s. 30 (1). This provides as follows:

"30. (1) A person shall be deemed to infringe

the monopoly in a registered design

if he, without the licence or

authority of the owner of the design

-

(a) applies the design or any

fraudulent or obvious

imitation of it to any article

in respect of which the design

is registered;

. . .

(c) sells, or offers or keeps for

sale or hires, offers or keeps

for hire, any article -

(i) to which the design or

any fraudulent or obvious

imitation of it has been

applied in infringement

of the monopoly in the

design; or

(ii) in respect of which the

design is registered and

to which the design or

any fraudulent or obvious

imitation of it has been

applied outside Australia

without the licence or

authority of the person

who was the owner of the

registered design at the

time when the design or

imitation was so applied."

17. In the written submissions from which he addressed, counsel for the applicant submitted that the respondents had infringed its monopoly in the designs and also that Exhibits B and C were obvious imitations of the designs. In the Application, reliance had been placed also on fraudulent imitation.

18. It follows from the legislative provisions to which I have referred that a design comprises features of shape, configuration, pattern or ornamentation applicable to an article, which features, in the finished article, can be judged by the eye. The monopoly granted by registration is the exclusive right to apply the design to an article in respect of which it is so registered; that monopoly also is infringed by application of an obvious or fraudulent imitation. The subject of the registration is not an article made according to a particular shape or pattern, but a concept or suggestion as to shape, configuration, pattern or ornamentation, that is to say, one particular individual and specific appearance: In re Wolanski's Registered Design [1953] HCA 72; (1953) 88 CLR 278 at 279, per Kitto J.

19. The article in respect of which each design is registered is described as a "chair pad". This was the article specified in the relevant applications; see sub-ss. 20 (3) and 23 (3). There was some divergence between the experts who gave evidence as to their use of terms, but "cushion" would describe both items shaped so as to form the seat upon which the users of chairs would sit and also loose cushions, whereas "chair pad" has the former, more specific, meaning.

20. To the eye, the striking features of the shape and configuration of both designs, in addition to the overall impression they give, include the use of piping around the perimeter with rounded rather than straight side walls, the four rounded rather than angled corners, the ties and the positioning of the ties for attachment of the chair pad to the back of chairs, the placement of the circular stitching at "tufting" points, and the effect of the stitching to keep together the two surfaces (as shown in the enlarged cross-section of the design drawings). This effect, in conjunction with the piping on the perimeter gives stress lines across portions or segments of the two main surfaces and the sides of the chair pad (described in some of the evidence as the "dimpling" or "quilting" effect). In the case of the second design, there are five rather than four tufting points and the central segment containing that fifth point presents a distinct appearance.

21. Each design has features which serve a functional purpose. The four narrow strips shown in the drawings, two in each of the corners at the narrower portion of the article, serve as ties to attach the pad to the back of the chair upon which the pad is to be used. The pads are shaped to reflect the spread of the seat of the chair, narrower at the back than at the front. The circular stitching at four places on the first design and at five places on the second (not four as stated in the text accompanying the inverted plan view of the attached drawings) serves to attach the two surfaces of the pad, thus helping to retain the shape of the pad and to give stability to the contents of the chair pad by avoiding "bunching", particularly where the chair pad contains pelletized synthetic matter or other such filling. The evidence inidicated that buttons might be used to achieve the same result as the circular stitching but that chair pads with circular stitching had greater appeal as being more comfortable for the user.

22. Neither design is invalid by reason only of these features serving functional purposes: s. 18 of the Act. I also accept the applicant's submission that neither design includes a method or principle of construction in the sense of that expression in the definition of "design" in sub-s. 4 (1) of the Act. This concept was introduced into design law at a time when design registration often was accompanied by statements having more in common with patent claims than the statement of novelty which the Registrar may request under sub-s. 20 (5) of the Act; see generally In the Matter of Wingate's Registered Design (1934) 52 RPC 126 at 130-131. As I have said, no such statement was made in the present case. In the United Kingdom, the specific statutory exclusion of methods or principles of construction has been described recently as largely redundant: Morris and Quest, "Design: The Modern Law and Practice", pp 25-26.

23. There remain the other attacks on validity, based on sub-s. 17 (1) of the Act. Evidence was given by a number of trade witnesses, as well as by representatives of the applicant and the respondents.

24. Mr Batchelor's family company has been making and selling indoor and outdoor cushions for more than 40 years. He said that his company and other manufacturers had for many years used buttoning to ensure that scatter cushions and chair pads used with loose material retained their shape; the size of the item determined the number of buttoning points needed. This buttoning technique had been used not only with cushions, but in the upholstery trade for a long period.

25. Mr Stokes has been employed since 1964 in his father's business. He was trained in furniture restoration and upholstery by his father who has been in this business for a great many years. Mr Stokes' experience includes re-covering cushions, chair pads and other seating arrangements. Prior to 1984, Mr Stokes had seen cushions and chair pads with rounded corners, which were shaped to follow the seat of the chair and which had ties (tied to the back of the chair to prevent the pad sliding off the chair), piping (used in about 90 per cent of cushions) and what he called "tufting" at both four and five points. What Mr. Stokes regarded as "tufting" included the use of buttoning (as I have earlier described), straight stitching of less than half an inch in length and use of leather patches to attach the two surfaces. (If the fabric is vinyl, tufting may also be effected by welding the surfaces together; Mr. Batchelor's evidence referred to this method.) Mr Stokes saw, more than 30 years ago, cushions used on outdoor furniture where circular stitching at tufting points had been used and the fabric within the stitched areas cut out to permit the escape of rain water. He also saw circular stitching used for tufting on cushions used indoors. Circular stitching may be performed with a straight needle machine, turning the cushion to achieve the circle. But for at least 10 years, machines have been available in Australia which stitch in a circle without the turning of the cushion. When the prototype for what became the first design was devised for the applicant by Mrs. Boccanfuso early in 1984, she used a straight needle machine. Mrs Boccanfuso had been employed by the applicant since 1976, first as a machinist, then to run its factory.

26. Mr Stokes had never before 1984 seen cushions or chair pads which used circular stitched tufting in addition to all the other features he recognised from the design drawings. He recognised an example of circular tufting upon a differently shaped cushion, Exhibit 8. This was an "Eos" cushion of a type sold in Australia since approximately 1980 by Skandinavian Living Pty. Limited, which trades as IKEA. Evidence of this was given by the manager of the IKEA store in the Sydney suburb of Gordon, Mrs Boije Af Gennas. The label on the Eos cushion indicates that it was made in Sweden. The cushion has no piping, a circular perimeter, five tufting points giving a dimpling effect, and two sets of elasticised ties.

27. Mr Mirto has been in the upholstery and soft furnishings trade for 15 years, running his own business (including manufacture of chair pads by hand and by machine, and re-covering of chair pads) and lecturing in upholstery and soft furnishings at the Sydney Technical College. He gave evidence that ties have been a common feature on cushions and chair pads for at least 15 years; so also the use of ribbing or piping around the perimeter of chair pads, and the use of a basically square shape, broadened to accommodate the front of the chair with which the pad would be used. Mr Mirto also said that the division of the surface into a number of segments and the folding or dimpling effect is a consequence of tufting. In this latter regard, Mr Mirto had seen cushions with diamond shaped stitching, and straight line stitching in corresponding places on cushions of the same squarish shape as shown in the design drawings. Circular stitching was common on chair pads before 1984, but Mr Mirto had not seen it on chair pads of the same shape as shown in the design drawings. He had seen it in cushions such as the Eos cushion.

28. Mr Mirto described various species of tufting. They included round, straight line or diamond shaped stitching, sewing with buttons (as described by Mr Batchelor and exemplified in the object which is Exhibit 6) and sewing with leather pieces. The tufting will be more durable and less likely to tear through the fabric of the chair pads or cushions if buttons or leather pieces are used. Mr Mirto said that circular stitch tufting is a cheaper trade variant because it may be done by machine and expenditure on buttons or leather patches is avoided. (But, as Mr Rapee pointed out in his evidence, whilst it is acceptable for decorative cushions, buttoning is not a preferred method of tufting for chair pads, such pads being less comfortable than those with tufting effected by other methods.)

29. Since 1972, Mrs Mack has been in the business of re-upholstering various furnishings, including cushions and cushion pads. She gave evidence that circular stitch tufting of the type exhibited on the designs is a very common embroidery technique which prior to 1984 she saw used on cushions, clothes, place mats and bedspreads. Exhibit 12B contains a clear representation of such a use of circular tufting in a 1983 advertisement in the Australian magazine "Vogue Living" for a duvet, which is there anglicised as a "continental blanket". Before 1984, she had seen cushions with ties, ribbing, piping and tufting, but she had not seen cushions of the shape in the design drawings with circular stitched tufting.

30. Various advertisements and promotional material was tendered and admitted into evidence, in an effort to show prior publication of the designs. In address, senior counsel for the respondents stressed the significance of a Sears Roebuck & Co. catalogue, published in the United States in 1980. This includes illustrations (by small photographs) of various "chair cushions" which are shown placed upon chairs and which have the same squarish shape as that in the design drawings, piping, rounded corners and sides, four tufting points and some dimpling effect. In the accompanying description, it is said that ties are attached and that the chair cushions are "tufted". But as the evidence shows, in Australian usage tufting may be effected otherwise than by circular stitching; I have no evidence that this is not so also in United States usage. Further, the only evidence of publication of the contents of this catalogue in Australia were agreed facts that in 1980, Waltons Limited, the employer of Mr Van Guyt, received 200 copies and that "in 1980 and 1981 he showed copies to certain persons but cannot say he showed any particular page to any particular person"; the purpose for which the copies were shown by him and what became of the copies otherwise is unexplained.

31. Prior publication may result from advertisement in a trade catalogue: Stratford Auto Components Ltd. v Britax (London) Ltd. (1961) RPC 197. But if such material is to constitute prior publication, then the reader must from a fair perusal of the material be able at least to see the design in his mind's eye and the design or something substantially the same as the design should be disclosed with reasonable clarity: Rosedale Associated Manufacturers Ltd v Airfix Products Ltd. (1957) RPC 239 at 244 per Lord Evershed M.R.

32. Further, the documentary material should have been publicly available in this country, even if there has been no actual disclosure to any individual member of the public. What suffices for such availability is a matter of some difficulty, as appears from the discussion in the 5th edition of "Russell-Clarke on Copyright in Industrial Designs", pp 45-47. The concept of availability is taken quite far in A. Pressler & Co. Ltd. v Gartside & Co. (of Manchester) Ltd. (1933) 50 RPC 240. That case concerned a design for a textile. One alleged anticipation had been held for many years in the library of the Calico Printers Association. Of that library, Luxmoore J. said (supra at 246):

"It has always been kept open for

inspection, and open for inspection, at

any rate since 1911 by members of (the

Association), by their customers, and

indeed, by such members of the public as

(the Association) were ready to allow to

inspect it, without any condition of any kind."

(Emphasis supplied.)

The Sears catalogue is a volume of 1719 pages, depicting a very large number of items. The material upon which the respondents rely is contained in 5 of those pages. The tersely stated agreed facts concerning the Sears catalogue fall short of establishing, and do not provide safe ground for inferring, that the relevant materials in that catalogue were disclosed to any members of the public or that they were available for inspection by members of the public, even within the expansive sense given that concept by Luxmoore J.

33. The respondent also relied upon illustrations in certain IKEA catalogues (particularly Exhibits 10B, 10C and 11A). These were much briefer publications than the Sears catalogue. They were used by Mrs Boije Af Gennas and others at IKEA stores for reference and to show customers who wanted to see particular products. The cushions shown in these catalogues were not necessarily available in Australia before the priority date in 1984. Mrs Boije Af Gennas could not say whether any particular cushion illustrated in the catalogues had been pointed out to any member of the public, before the priority date, but this is not a fatal obstacle to the reliance the respondents seek to place on these catalogues. I would infer that these catalogues were disclosed to members of the public before 1984 and that they were publicly available in the necessary sense for this branch of the law.

34. But as regards both the materials relied upon in the Sears catalogue and the IKEA catalogues, I find that what is disclosed therein falls short of the standard or degree of disclosure which is required to constitute publication and which is referred to by Lord Evershed M.R. in the Rosedale Case (supra). Exhibits 10B and 10C are from IKEA catalogues for 1977 and 1978 and both show the "Sonja" chair pad. This has ties, rounded edges, no piping and four tufting spots. It is almost possible to say from a close-up photograph in Exhibit 10C of a segment of the plane surface, that circular stitching was used. The dimensions are shown as 43 x 40 x 6 cm. These catalogues have the descriptive text in Swedish. Exhibit 11A is from a 1988 catalogue printed in Canada, in English. It shows, inter alia, three chair pads, each attached to a chair by ties. There are four tufting spots, rounded edges and no piping. The method of tufting is not disclosed to the eye.

35. In address, senior counsel for the respondents also referred to Exhibit 4E, p 91 of "Architectural Digest" for March 1978. This shows a chair pad attached with ties to a chair, with square rather than rounded sides, and no disclosure of the method of tufting employed at what seems to be five tufting points. This also is an inadequate disclosure. The same comments apply to Exhibit 12H, p 67 of "Australian House and Garden" for July 1981.

36. Exhibit 4D comprises p 152 of the "Architectural Digest" for November 1978. This comes closer to an anticipation. Four chairs are shown in the one photograph, each bearing a chair pad of the same design. The pads have a similar outline shape to the first design, with the pad being wider at the front than at the back (which is tied to the chair), piping around the perimeter, rounded edges and no square corners. But again, it is not possible to be certain which method of tufting is employed. The same may be said of Exhibit 12E, p 89 of the issue for July 1984 of "Australian House and Garden", save that there appear to be 9 tufting points on the chair pads shown in situ in this exhibit.

37. I come now to the disclosures in Exhibits 2A and 2B. Mr. David, a director of the respondents, said in his affidavit that he received these before August 1984 from Mr Joseph Chen of Speed Joseph Inc. of Taiwan and that before 1984 they were shown in Australia to his customers. The brochures are stated on the face to emanate from the curiously styled Crawford A Carisbrook Company, which is a Delaware corporation. Mr Kelly, Vice-President of Sales in that corporation since 1981 and an employee since 1961, states in his affidavit that Exhibit 2A was first published in the United States in May 1988 and that Exhibit 2B was first published there in May 1984. The priority date is 23 August 1984. Mr Kelly, by arrangement between the parties and to save expense, was not brought here for cross- examination. Mr David was cross-examined in some detail. I accept the applicant's submissions that whilst he was not intending to deceive the Court, in this respect his enthusiasm in his companies' cause out-ran the precision of his recall of things past. I find that Exhibits 2A and 2B were not published in Australia before the priority date. In any event, as I have said, the disclosure each exhibit makes would not amount to prior publication of either design. Both show seat pads in position on chairs and having four tufting points. One shows pads with 4 such points, piping around the perimeter but no ties, and the other 4 such points, ties, but no piping. In each case, the kind of tufting involved is not adequately disclosed to the eye.

38. In addition to these paper publications, the respondents also alleged prior user of the designs. I have described the Eos cushion. It does not amount to prior publication in accordance with the principles I have described, particularly given its circular perimeter and lack of piping. Exhibit 6 is a chair pad produced by Mr. Batchelor's company only in 1988. It has the same overall shape as the first design, ties and piping, but buttons are used on each side of the four tufting points. Mr. Batchelor said he had made "similar" articles before the priority date. Other trade witnesses, notably Mr. Mirto and Mrs. Mack, used such terms as "identical" to describe their recollection of what they had seen before the priority date. But they produced no articles said to constitute such prior user. It would be quite unsafe to hold on such evidence that prior user had been established: In the matter of Wingate's Registered Design (1934) 52 RPC 126 at 134; see also Commonwealth Industrial Gases Ltd. v M.W.A. Holdings Pty. Ltd. [1970] HCA 38; (1970) 44 ALJR 385 at 387 per Menzies J. (a patent case).

39. I conclude neither of the designs is not novel or original by reason of prior publication or prior user. However, the evidence of the trade witnesses, confirmed by the material published (in the relevant sense) before the priority date is helpful to the respondents' case in another way. It shows that before the priority date, all of what I have described as the features of the first and second designs were well known and commonly used by those in the trade of making or recovering chair pads. Further, putting aside disclosure of the method of tufting, designs had been published for chair pads which to the eye appear shaped in the same way as the first design and adapted to the spread of the seats of chairs to which the pads might be tied. I refer in particular to Exhibits 4D, 10B, 10C, 11A and 12E. The significance of this will now become apparent.

40. Lack of prior publication or user is not the end of the case on validity. The respondents also submit that the designs are but combinations of common trade variants, or differ only in immaterial details from designs published or used in Australia in respect of chair pads: para. 17 (1) (a) of the Act. From the time of the early decisions construing the British Act of 1883, (which in s. 47 authorised registration of new or original designs), the Courts have required, initially as something of a gloss upon the statute, "substantial" novelty, having regard to the registerability of new combinations of old design elements; see Le May v Welch (1884) 28 Ch D 24 at 34-35 per Bowen L.J. Allied to this was a reluctance to treat as valid, designs which embodied trade variations. Thus, in Simmons v Mathieson & Co. Ltd. (1911) 28 RPC 486 at 489, Fletcher Moulton L.J. said:

"It was never intended that persons in

their trade, in which they are not only

justified in using but bound to use the

skill, which they have acquired during

years of practice, in making variations

of the shape of the articles they

produce, should be harassed by persons

claiming a monopoly in Designs if those

are really matters that are open to the

public. You must have something new

before the law will allow you to get any

monopoly at all."

41. In Phillips v Harbro Rubber Company (1919) 36 RPC 79, the Court of Appeal upheld a decision that there was no substantial novelty or originality in the plaintiff's design applicable for the surface pattern of India rubber pads or plates for heels of boots and shoes. Swinfen Eady M.R. said (at 85):

"It is true that the exact and entire

combination of the four features found in

the Plaintiffs' Design is not shown to

have existed previously in any other

boot-heel, but this alone does not

entitle the Plaintiffs to protection.

. . . In my opinion, it is not open to a

manufacturer to take one or more leading

features of different goods already on

the market, and, by registering a Design

showing merely a combination of these

features, and without any real mental

activity being required for its

production, acquire copyright in the

registered Design. Industries would be

unduly hampered, if every such Design

could be the subject of a monopoly."

"I desire to say that, while I recognise

that, in some subject-matters, the

combination of old elements may be new

and original, I think it will require a

very strong case to enable a claimant,

all the elements of whose Design were

used by his predecessor, to claim

originality and novelty for their

permutation and combination . . . To

illustrate, if A has a hexagon stove with

Norman arch openings in the panels, and

an octagon stove with lancet window

openings in the panels, I do not think B,

by putting on the market in the same

construction a hexagon stove with lancet

windows and an octagon stove with Norman

windows, will produce two new and

original Designs."

42. In 1936, Dixon J. referred to the marked economy in the statement of principles in the Australian statute as it then stood, largely reflecting as it did the British legislation of 1883; he described it as "this rather peculiar Act": Macrae Knitting Mills Ltd. v Lowes Ltd. [1936] HCA 43; (1936) 55 CLR 725 at 729. Dixon J. said (at 731) that whilst the design in question was not an exact reproduction of any of the prior art, it did not show any distinctiveness in its departure from the prior art. In the same case, Starke J. said (at 728) that a mere variation of a common shape or form in the trade did not constitute anything "new or original", and Evatt J. (at 732) held that the design in question was "a mere trade variation" from designs of articles previously in use.

43. Section 1 of the 1949 British Act denied registration to designs differing from published designs "only in immaterial details or in features which are variants commonly used in the trade". (These expressions still appear in the British Act after other amendments effected by Schedule 4 to the Copyright Designs and Patents Act 1988 (UK).) In para. 69 of the 1973 Report on the Law Relating to Designs, of the Australian Designs Law Review Committee, reference was made to the provisions of the 1949 British legislation to which I have referred. The Committee stated that it had given some consideration to the question of whether in Australia the terms of that legislation should be passed over in favour of an expression such as "a design consisting of the registered design with modifications or variations not sufficient to alter the nature or substantially to affect the identity, of the registered design". The Committee recommended against such a course. Hence the terms of para. 17 (1) (a) of the Act, as introduced by s. 9 of the Designs Amendment Act 1981. However, the Australian legislation differs in some respects from sub-s. 1 (2) of the Registered Designs Act 1949 (U.K.). Sub-section 1 (2) read:

"1. (2) Subject to the provisions of this

Act, a design shall not be registered

thereunder unless it is new or

original and in particular shall not

be so registered in respect of any

article if it is the same as a design

which before the date of the

application for registration has been

registered or published in the United

Kingdom in respect of the same or any

other article or differs from such a

design only in immaterial details or

in features which are variants

commonly used in the trade."

On the other hand, paragraph 17 (1) (a) of the Australian legislation is directed to a design which:

"(a) differs only in immaterial details or in

features commonly used in the relevant trade

from a design that, before the priority date

in respect of the application for

registration, was registered, published or

used in Australia in respect of the same

article . . ."

44. In Sebel & Coy. Ltd.'s Application (No. 1) (1959) RPC 12, an application for registration for a design of a rocking horse was unsuccessful. In upholding the decision of the Hearing Officer, Lloyd-Jacob J. said (at 18):

"(R)egistration is to be denied to a

Design which is the same as a published

design or differs from it only in

immaterial details or in features which

are variants commonly used in the trade.

The March, 1956, issue of 'Playthings' at

pp 201 and 202 and the August, 1956,

issue of the same journal overleaf to p

64 carry illustrations of toy bouncing

horses in which the shape of the stands

is substantially identical with that in

the Design in suit. The detailed design

of horse mounted on such stands presents

differences which are evident on

inspection, for the magazine

illustrations relate to horses in a

'bucking' or 'leaping' attitude, whilst

the Design in suit presents the animal

with all four legs outstretched such as

used to be thought appropriate to a

'galloping' position. Such differences

cannot be said to be immaterial, for they

could reasonably be thought to be of

significance. But a modification of the

'bucking' or 'leaping' toy horse

illustrated in these periodicals which

are of American origin so as to

substitute upon the same shape of stand a

'galloping' horse in the traditional pose

common to rocking horses in English homes

for generations past would be to utilise

a feature which is an obvious variant,

and one which is and has for years been

in use."

Both this case and Lloyd-Jacob J.'s decision in Sebel & Coy. Ltd.'s Application (No. 2) (1959) RPC 19 at 24, indicate that a feature of a design which is not an immaterial detail may still be a variant commonly used in the trade. In what follows, as to validity, I direct attention to common trade variants.

45. I bear in mind both that each of the designs must be looked at as a whole and that a design is not invalid merely because it contains a number of elements of similarity to earlier designs, if there are other elements that are different: D. Sebel & Co. Ltd. v National Art Metal Co. Pty. Ltd. (1965) 10 FLR 224 at 227 per Jacobs J.

46. I have described the features of the designs and the evidence of the trade witnesses and of various documentary publications (particularly Exhibits 4D, 10B, 10C, 11A and 12C) which were published (in the relevant sense) before the priority date. As I have said, all of the features of the first and second designs are shown before the priority date to have been well known and commonly used in the relevant trade of cushion and chair pad manufacture and reupholstery; further, (tufting methods aside) designs have been published for chair pads which to the eye are shaped in the same way as the first design. This is not a case such as Britvic Ltd.'s Application (1960) RPC 201, where a disclosure in one trade catalogue was insufficient to establish a common trade variant. What has happened here may properly be described as the adoption of features commonly used in the trade and the registration of designs for combinations thereof. It is true, as the witnesses agreed, that no particular one of the publications relied on sufficiently discloses chair pads of the squarish shape of the designs with tufting points effected by circular stitching. But this method of tufting was well known and used with other cushions and chair pads, for example, the Eos product (Exhibit 8). The use of this method of tufting rather than buttoning and straight stitching, in my view, would not present an effect which went beyond the impression of a substitution of a known alternative; cf. Sebel & Coy. Ltd.'s Application (No. 2) (supra at 24). As I have said, something may be a not immaterial detail but may still be a variant commonly used in the trade.

47. My conclusion is that the first design is invalid because it differs only in features commonly used at the priority date of 23 August 1984 in the relevant trade from designs published or used in Australia in respect of chair pads. What I have said concerning the first design applies to the second design, with the additional observation that the evidence would indicate that the use of five rather than four tufting points was a well known trade variant. Thus, the second design also would be invalid. But that is not all.

48. The second design was registered pursuant to s. 25D of the Act, on the footing that the use of the fifth tufting point meant that it differed from the first design only in immaterial details or in features commonly used in the relevant trade. The cancellation of the first design means that the registration of the second design no longer is deemed to have come into force when the application for the first design was made (i.e. 23 August 1984); its priority date will be the date of the application (i.e. 19 July 1988). This follows from the inter-action between s. 21 and s. 25D of the Act. The consequence is that the second design is invalid, not only for the reason given above, but also because the second design differed only from the first in a feature commonly used in the trade, and the first design had a prior registration in respect of the same article as the second design, within the meaning of para. 17 (1) (a). This paragraph is directed not only at designs previously published or used, but at prior registrations. The first design is such a registration.

49. It is unnecessary to consider the other grounds of alleged invalidity ("immaterial details" - para 17 (1) (a); "obvious adaptation" - para 17 (1) (b)).

50. As is apparent on its face, the agreement on 17 March 1987 arose out of an earlier dispute between the applicant and the first respondent when the first but not the second design was on the Register. The applicant did not submit that clause (4) operated to bar the first respondent in these proceedings from seeking the cancellation of the first design. Such a prohibition might have offended public policy by attempting to preserve from challenge an invalid monopoly; cf. Lear v Adkins [1969] USSC 152; 395 US 653 (1969); Troxel Mfg. Co. v Schwinn Bicycle Co. 465 F2d 1253 (1972); Walker on Patents, 3rd Ed., $20.55, $20.56. But, the applicants submitted, what clause (4) did create was a contractual promise, whilst the first design remains on the Register not to deal in cushions which are within the scope of the registration, in the sense that, if the design were valid, they would infringe; thus, for this limited purpose, validity was to be assumed. I accept that submission as to the proper construction of clause (4).

51. But do the respondents' chair pads, Exhibits B and C, infringe the first design in the sense I have stated? The principles by which one assesses design infringement have been discussed in two recent Full Court decisions, and I do not repeat them here; see Dart Industries Inc. v The Decor Corporation Pty. Ltd. (1989) AIPC 90-569; Turbo Tek Enterprises Inc. v Sperling Enterprises Pty. Ltd. (25 July 1989, unrep.). In this case, as the contract makes plain, at all material times the respondents knew of the first design and that it was registered by the applicant. Late in 1988, Mr. David showed his wife a chair pad which he had picked up in Taiwan in September 1988, and it was from this that the chair pads, examples of which are Exhibits B and C, were manufactured commencing late in 1988. At that stage, they did not know that an application for what was to become the second design had been lodged on 19 July 1988.

52. Mr and Mrs David gave evidence, which I accept, of their belief that the manufacture and sale of the respondents' new chair pad was not forbidden by the contract with the applicant, and that it was a fresh design with a different look. In particular, it had five not four tufting points and straight not circular stitching. They believed there were sufficient differences for their companies to go ahead with manufacture. They went ahead to market chair pads with this design without seeking a design registration; nor did they have any searches of the Register of Designs carried out. Mr. and Mrs. David only found out of the applicant's application for the second design early in January 1989, as they were about to launch their product on the market.

53. In my view, as a matter of visual impression, and although the various methods of tufting may be known alternatives, the circular stitching on the tufting points is a material detail and an important feature of the first design. The enlarged cross-section of the plan view serves to emphasise this. Further, the addition of the fifth tufting point significantly alters the plan view of Exhibits B and C from that of the first design. Plainly, in my opinion, Exhibits B and C are not the same as the first design. Nor, looking at them separately, and with the first design, are they copies which are apparent to the eye, treating the question as one of substance which calls for an examination of the essential features of the first design. Thus, they are not obvious imitations of the first design. Nor was the design of Exhibits B and C devised by making use of the first design, in the sense of it having been knowingly, consciously or deliberately based on or derived from the first design, within the meaning of the authorities.

54. It follows that there has been no breach of clause (4) of the agreement.

55. I should indicate what my views would have been as to infringement (independently of contract) if the second design were, contrary to my conclusion, valid. Whilst there are known alternative methods of tufting, the method of tufting chosen may present to the viewer a material detail of the design in question. The use of straight stitching rather than circular stitching means that there are distinct and perceptible differences in the overall impression upon the eye given by the respondent's chair pads and the second design, seen separately and together. This overall impression is a product not only of the different appearances of the tufting points, but also of the differences in the dimpling or quilting effect in the overall plan view of the two designs. This is, of course, said upon the hypothesis that the second design is valid. On that footing, and bearing in mind the background of the evidence in this case, the instructed eye, when dealing with infringement, would treat such differences as significant; see Dart Industries Inc. v The Decor Corporation Pty. Ltd. (supra at 38,975-38,976). In my view, the first design would not correctly be said to have been applied to Exhibits B and C, nor would the respondents have applied an obvious imitation of the second design. Further, upon the findings I have made, there would have been no fraudulent imitation of the second design, even if that issue had been pressed in the addresses of counsel for the applicant.

56. The Application should be dismissed. Upon the Cross-Claim, the Register of Designs should be rectified by expunging the entry of the registration of Designs Nos. 91598 and 103497. The applicants should pay the costs of the respondents.