Small business owner and local entrepreneur Shannon McLaughlin recently accused retailer Woolworths of copying the design and trading names of her Ubuntu Baba baby carrier. She asserted that Woolworths had replicas made in China, which it then sold at a significantly lower price. This, she said, threatened her business as a going concern.
A month later, and there is talk of a settlement offer on the table. Woolworths is also no longer selling the replica carriers. Now, this may have been a case of ethics infringement… or the social media storm forced Woolworths to entertain settlement discussions… But was it actually intellectual property (IP) infringement?
Well, there could have been unlawful competition and passing off. But the short answer to the IP question is No and that’s because McLaughlin did not do two important things in order to legally protect her designs from infringement:
Here’s the caveat. Different departments at the Companies and Intellectual Properties Commission (CIPC) handle the Companies Register and the Trade Marks Register. These departments do not share information, nor do they check each other’s registers.
This means that it’s not enough to simply register your company name. To optimise your protection and rights in a name or logo, you must also register a trade mark.
Ubuntu Baba did neither of these things. So, if you’re a small business owner and you sell or want to sell a signature product that you don’t want copied, here’s what you need to do:
Section 14 of the Designs Act No.195 of 1993 stipulates that the proprietor of a new and original design must file a design application and ‘prosecute it to registration’.
To protect your trading names, you must also file a trade mark application and ‘prosecute it to registration’.
Protect your baby
What McLaughlin does have is copyright in the 3D manifestation of the Ubuntu Baba carrier and in the 2D drawings. But copyright, contrary to popular belief, is not a registrable right.
In terms of section 15(3A) of the Copyright Act, if a third party does not have access to the 2D drawings of the copyrighted work and they ‘reverse-engineer’ the 3D product, they are excluded from copyright infringement. This means that these third parties can conceivably get away with copying your designs if you have no other protection in place.
In order to prove that the intellectual property is indeed yours, you need to go through the admittedly onerous process of proving all elements of subsistence, ownership, and infringement of copyright. But, if you have a design registration, all of this can be avoided.
Name your baby
Without these, you’ll have to rely on the common law of unlawful competition and passing off. Because these are common law remedies, you need to prove goodwill or reputation in your trading names or trade marks. You can do this by showing sales, marketing, and advertising expenses, and perhaps by marketing survey – another arduous process.
A certificate of trade mark registration serves as prima facie proof of the validity of that trade mark, making it easier for you to prove damages or to claim a reasonable royalty (in lieu of damages).
The bottom line
The Woolworths / Ubuntu Baba matter comes down to the fact that, when the law is not on your side, you can’t rely on everyone to have ethical business practices. Protect yourself and your business first. And, as always, if you need help registering a design or trade mark, or have questions about the intellectual property space, please email me here.
This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE)