Industrial Designs - Sri Lanka

Law of Industrial Designs

  • Part III of the Intellectual Property Act addresses the law related to industrial designs.
  • The protection for industrial designs under Part III is in addition to any other protection provided under written law. [S.28]
  • An industrial design can attract protection under copyright and unfair competition laws, where applicable. This is known as overlapping intellectual property rights.

1. Industrial Design - Meaning

  • An industrial design is defined as any composition of lines or colors or any three-dimensional form that gives a special appearance to a product of industry or handicraft and is capable of serving as a pattern for a product of industry or handicraft. [S.30]
  • Both two-dimensional and three-dimensional designs are eligible for protection.
  • Anything in an industrial design that serves solely to obtain a technical result is not protected. [S.30]
    • See Selvarajah Mahera Kanth v. MTV Networks (SC decided the envelope in dispute was a functional design- ‘made to suit the functional needs of the decedent’).

2. Protected Industrial Design - S.29

An industrial design receives protection under Part III of the Act only where:

  • It is new, and
  • It is ‘not anti-social’ in the sense that it does not consist of any scandalous design or is not contrary to morality or public order or public interest or is not likely to offend the religious or racial susceptibilities of any community.

2.1 Novelty – S.31

  • An industrial design is considered new where it had not been made available to the public anywhere in the world and at any time whatsoever through description, use, or in any other manner before the date of the application for the registration of the industrial design or before the date of priority validly claimed in respect thereof [S.31(1)]
  • An industrial design ‘shall not be deemed to have been made available to the public solely by reason of the fact that, within the period of six months preceding the filing of the application for registration, it had been displayed at an official or officially recognized international exhibition’.[S. 31(2)]
  • An industrial design is not considered new solely by the fact that it differs from an earlier industrial design in minor respect or that it concerns a type of product from a product embodying an earlier industrial design.[S. 31(3)]
  • There are many judicial decisions in the UK and India dealing with the meaning of ‘new and original’ industrial designs under the respective laws.
  • ‘Novelty’ is not destroyed by the fact that the design has been derived from a source common to mankind. (Saunders v. Weil).
  • ‘Novelty’ does not relate to the idea itself, but to the way in which the idea is to be rendered applicable to some special subject matter (Dover v. Nurnberger)
  • Addition of a few curves to an existing industrial design does not make it new (Chawla v. Bright Auto Industries
  • An industrial design must be substantially different from existing ones (Phillips v. Harbo)
  • It must constitute a striking feature making an immediate appeal to eye (Mathew v. Thomas)

2.2 Not ‘Anti-Social’

  • As mentioned above, an industrial design is protected only where it does not consist of any scandalous design or is not contrary to morality or public order or public interest or is not likely to offend the religious or racial susceptibilities of any community.
  • The decision on the issue whether or not a particular industrial design falls within the ambit of any of these categories of disqualification is largely a matter of facts.

3. Right to Protection

  • The right to obtain the protection of an industrial design belongs to its owner. [S. 32 (1)]
  • Subject to the provisions governing the ownership of industrial designs created under the contracts of employment and execution of work [S. 34], the owner is generally the creator of the industrial design or the successor in title of the creator.[S. 32 (2)]
  • Where two or more persons have jointly created an industrial design, the right to obtain the protection belongs to them jointly. [S. 32 (3)]
  • However, a person who has merely assisted in the creation of an industrial design but has made no contribution of a creative nature is not considered to be the creator or a co-creator of such industrial design. [S. 32 (3)]

4. Presumption of Creator - [S. 32(4)]

  • Accordingly, the person who makes the first application for the registration of an industrial design or the person who first validly claims the earliest priority for his application is deemed, subject to the provisions of sections 33 and 34 of the Act, to be the creator.
  • It is rebuttable with evidence to the contrary. This presumption arises only in respect of the applications made by natural persons and not the legal person.
  • Similarly, it does not apply to the applications made by the employers and the persons who commissioned the works.
  • New legal provisions are required on the ownership of computer-generated industrial designs, if any.
  • [S. 33 deals with usurpation and assignment of IDs while S. 34 deals with employee created/ created on commission IDs]

4.1 Under contracts of employment and execution of work

  • An industrial design created by an employee or under a contract of execution during the course of employment belongs to the employer/person who commissioned the work unless otherwise agreed in the contract of employment. [S. 34 (1)]
  • Where the industrial design acquires an economic value much greater than the parties could reasonably have foreseen at the time of concluding the respective contract of employment or for the execution of the work, the creator of the industrial design is entitled to an equitable remuneration which may be fixed by the court on an application made by the creator in the absence of an agreement between the parties. [S. 34 (1)- proviso]
  • Where an employee whose contract of employment does not require him to engage in any creative activity creates, in the field of activities of his employer, an industrial design using data or means placed at his disposal by his employer, the ownership of such industrial design belongs to the employer in the absence of any provision to the contrary in the contract of employment. However, such employee is entitled to equitable remuneration which, in the absence of an agreement between the parties, may be fixed by the court taking into account his emoluments, the economic value of the industrial design, and any benefit derived from it by the employer [S. 34 (2)]
  • It is also provided that the above-stated rights of the creator of an industrial design cannot be restricted by contract. [S. 34 (3)]

5. Acquisition of Rights

  • The exclusive rights to an industrial design under Pt 3 are acquired only by registration. [47]
  • Unregistered industrial designs may receive protection under the other laws such as copyright and protection against unfair competition. [S. 28]
  • S. 36 to 44: application, application fee, priority, examination, and publication, registration, etc.
  • Priority: It is conventional priority recognized under the Paris Convention. An applicant who has made an application for registration of an ID in a Paris Convention member country can make an application for the registration of the same ID in other member country [countries] within a period of 6 months from the date of the original application claiming the date of the original application for the later application(s).

6. Period of Protection and Renewal

  • The registration of an industrial design lasts for a period of five years from the date of receipt of the application for its registration. [ S.45]
  • The registration of an industrial design may be renewed for two consecutive periods of five years each on payment of the prescribed fee. Renewal fee must be paid within 12 months before registration expiration date. Grace period is 6 months after expiration with surcharge.
  • Where the renewal fee is not paid within the prescribed period of time or the grace period, the registration is removed from the Register of Industrial Designs. [ S.45]

7. Rights of the registered owner

  • The registered owner of an industrial design is entitled to the following exclusive rights in relation to the industrial design: [S. 47 (1)]
    • to reproduce and embody such industrial design in making a product;
    • to import, offer for sale, sell or use a product embodying such industrial design;
    • to stock, for the purpose of offering for sale, selling, or using, a product embodying such industrial design;
    • to assign or transmit the registration of the industrial design; and
    • to conclude license contracts.
  • All are prohibited from doing any of these acts without the consent of the registered owner of the industrial design. [S. 47 (2)]
  • Any of the acts referred to above, if done by any unauthorized person, does not become lawful solely by reason of the fact (i) that the reproduction of the registered industrial design differs from the registered industrial design in minor respects or (ii) that the reproduction of the registered industrial design is embodied in a type of product different from a product embodying the registered industrial design. [S. 47 (3)]
  • In the absence of any agreement to the contrary, joint owners of an application for registration or the registration of an industrial design may separately assign or transmit their rights in the application or registration, use the industrial design and exercise the exclusive rights referred to in paragraphs (a) to (c) of section 47(1), but may only jointly withdraw the application, renounce the registration or conclude the license contracts. [S. 50]

8. Limitation of rights

  • Two limitations on the rights attached to a registered industrial design are referred to below.

    • The protected rights extend only to the acts done for industrial or commercial purposes. Thus, any person can lawfully exploit those rights for non-commercial purposes without the authorization of the owner of the rights. {S. 48(1)]
    • They do not preclude third parties from performing any of the specified acts under the protected rights in respect of a product embodying the registered industrial design after such product has been lawfully manufactured, imported, offered for sale, sold, used or stocked in Sri Lanka.{S. 48(1)]

  • This limitation contains following two main features.

    • Applicable only to a product that embodies the registered industrial design after that product is lawfully manufactured, imported, offered for sale, sold, used or stocked in Sri Lanka.
    • Causes the owner of an industrial design to lose or to exhaust the exclusive rights to the industrial design in relation to the concerned product that is lawfully manufactured, imported, offered for sale, sold, used or stocked in Sri Lanka.

  • Consequently, section 48(2) recognizes the ‘principle of exhaustion of intellectual property rights’ in the context of the law of industrial designs in Sri Lanka.

  • Exhaustion of intellectual property rights generally means that when the goods are placed on the market or more specifically, sold by the owner of the particular intellectual property right or by a third party with the authorization of the owner, the owner loses the ability to deploy the intellectual property right that has been used on, or in, those goods.

  • ‘Exhaustion of rights’ takes two forms – national and international. The exhaustion of rights that occurs in respect of the goods placed on the national market is called ‘national exhaustion’ whereas the exhaustion of rights that occurs in respect of the goods placed on the international market is called ‘international exhaustion.’

  • Non-existence of ‘international exhaustion’ of rights in this context results in the denial of the parallel importation of goods. The registered owner of an industrial design is therefore entitled to preclude third parties from importing products embodying the registered industrial design, even if they are lawfully available in other countries.

Infringement

  • Part III of the Act which deals with the subject of industrial designs does not make any specific provisions on infringement of rights and related areas. S.5 defines infringement of rights under copyright as ‘an act that violates any rights’. Accordingly ‘infringement’ in the law of industrial design may be explained as an act that violates any right protected under Part III
  • Section 47 (1) enumerates those protected rights. Taking the provisions of section 47(2) into consideration, it may also be stated that ‘infringement’ occurs where a person exercise, without the consent of the registered owner of the industrial design, any of the rights enumerated under section 47(1).
  • The infringement of any of the protected rights results in civil remedies and criminal sanctions under the provisions of Chapters XXXV and XXXVIII of the Act
  • The limitations introduced to those rights by section 48 operate as defenses in the infringement proceedings.
  • The Customs Ordinance prohibits the importation and the exportation of goods in violation of the protected rights.

Assignment and Transmission

  • S.49(1) An application for the registration, or the registration, of an industrial design may be assigned or transmitted
  • S.49(1) Such assignment or transmission must be made in writing signed by or on behalf of the contracting parties.
  • It is a commercial contract made between the applicant in the application for the registration of ID or the owner of a registered ID [assignor or transferor] and another person [assignee or transferee] and governed under the provisions of the Act, the general law of contract, where appropriate and its own terms and conditions. Upon the due execution of the assignment or the transmission, the assignee or the transferee becomes the owner of the ID with all the rights recognized under S.47.
  • S. 49(2) Any person becoming entitled by assignment or by transmission to an application for

registration, or the registration, of an industrial design may apply to the Director-General in the prescribed manner along with the prescribed fee to have such assignment or transmission recorded in the Register of Industrial Designs.

  • An assignment or transmission has no effect against third parties unless it is recorded in the Register of Industrial Designs. [S. 49(2)]. Thus, the recording has impliedly become mandatory
  • The recording takes place only upon the payment of the prescribed fee - S 49(3).
  • In the absence of any agreement to the contrary between the parties, the joint owners of an application for registration, or the registration, of an industrial design may separately assign or transmit their rights in the application or the registration, use the industrial design and exercise the exclusive rights under S.47 [S. 50]
  • However, they may only jointly withdraw the application, renounce the registration, or conclude a license contract.[S. 50]
  • S. 58(3) makes applicable the provisions of s. 58 (1) and 58 (2) relating to license contracts having impact on economic development of Sri Lanka to the assignment and transmission of the applications for registration, and the registrations, of industrial designs.

Licensing

  • S.51: A license contract means “any contract by which the registered owner of an industrial design (the licensor) grants to another person or enterprise (the licensee) a license to do any or all of the acts referred to in paragraphs (a), (b) and (c) of sub-section (1) of section 47.”
  • It is a commercial contract made between the licensor and the licensee and governed under the provisions of the Act, the general law of contract, where appropriate and its own terms and conditions.
  • A license can be granted only to:
    • reproduce and embody such industrial design in making a product,
    • import, offer for sale, sell or use a product embodying such industrial design, and
    • stock for the purpose of offering for sale, selling or using a product embodying such industrial design. Other two rights are excluded.
  • A license can be either exclusive or non-exclusive. Where the license is exclusive, the licensor is not competent, unless otherwise agreed in the contract, to grant further licenses to third parties
  • A license contract must be made in writing and signed by the contracting parties or their authorized agents. [S. 52 (1)][required formalities ]
  • S.52(2) On a written request signed by or on behalf of the contracting parties, and upon payment of the prescribed fee, the Director General is required to record in the Register of Industrial Designs such particulars relating to the license contract as the contracting parties are willing to have recorded.

Rights and obligations of the licensee

  • The rights and obligations of the licensee are generally defined and governed by the provisions of the license contract.
  • S. 53 however provides that the licensee is entitled, unless agreed otherwise in the license contract, ‘to do any or all of the acts referred to in S.47.
  • The licensee is not, in the absence of any provision to the contrary in the license contract, entitled to assign his rights under the license contract or to grant sub-licenses to third parties.

Rights and obligations of the licensor

  • The rights and obligations of the licensor are also primarily defined and determined in the light of the provisions of the contract.
  • However, s. 54 makes certain provisions with regard to the rights of the licensor.
  • S.54(1) Unless the contract expressly provides otherwise, ‘the licensor may grant further licenses to third parties
  • S. 54 (2) Where the license contract provides that the license is exclusive, and unless it is expressly provided otherwise in such contract, the licensor is not competent to grant further licenses to third parties

Invalid clauses in license contracts

  • S. 55: Any clause in a license contract is null and void in so far as it imposes upon the licensee the restrictions not derived from the rights conferred by Part III of the Act on the registered owner of the industrial design, or which are unnecessary for safeguarding such rights.
  • However, the following do not constitute restrictions:
    • The restrictions concerning the scope, extent, duration of the use of the industrial design or the geographical area in, or the quality or the quantity of the products in connection with, which the industrial design may be used; and
    • The obligations imposed upon the licensee to abstain from all the acts capable of prejudicing the validity of the registration of the industrial design.

Be mindful of:

  • License contracts detrimental to economic development in Sri Lanka [ S. 58]
  • Effect of nullity of registration - Where, before the expiration of the license contract, the registration of the industrial design is declared null and void, the licensee in such event is not required to make any payment to the licensor under the license, and is entitled to repayment of the payments already made.[S.56]
  • Proviso to s. 56 “The licensor shall not be required to make any repayment, where the licensee has effectively profited from the license.”
  • You can have the expiry, termination, or invalidation of a license contract recorded in the Register of IDs[ S. 57]

Further see…

  • Renunciation of registration[ S.59]
  • Nullity of registration[ S.60]