Thursday, May 7, 2015

Valid Industrial Design May Be Functional

Zero Spill Systems (Int’l) Inc v Heide 2015 FCA 115 Stratas JA: Dawson, Near JJA var’g 2013 FC 616 Barnes J

In its Zero Spill decision the FCA has largely set aside Barnes J’s decision and remitted it for redetermination. The only legal point of interest relates to the ‘793 Industrial Design.

As discussed in my post on the FC decision, the patents relate to oil field fluid containment products that are used to catch fluid spillage when drill pipes are disassembled. Three patents and one industrial design licensed by Zero Spill, the patentee / appellant, were at issue.

Paragraph 5.1(a) of the Industrial Design Act provides that “No protection afforded by this Act shall extend to features applied to a useful article that are dictated solely by a utilitarian function of the article.” With respect to the ‘793 design, Barnes J had held that Zero Spill had had failed to identify the features of the ‘793 design that were protectable under that section [12]. The FCA held that this was wrong, because the burden of invoking paragraph 5.1(a) is on the defendant [18].

The FCA also noted that Barnes J could be taken to have held that many features of the ’793 Design were unprotectable under 5.1(a) as being functional, even aside from the evidentiary point [13]. (This is how I had interpreted his decision.) The FCA held that to the extent he so held, this was an error. The FCA noted that in order for 5.1(a) to be engaged, it is not enough that a feature serve some functional purpose in addition to the decorative purpose, as was implied by Barnes J [22]; as the statute says, the feature must be dictated solely by its function [24]. 

This textual point is compelling, but the FCA went on to hold that this conclusion is reinforced by a purposive analysis. The purpose of the Industrial Design Act “is to provide residual protection for functional designs that would, but for section 64 of the Copyright Act, R.S.C. 1985, c. C-42, be subject to copyright protection” [25].

[26] Under subsection 64(2) of the Copyright Act, an article is exempt from copyright protection if two conditions are met. First, there must have been more than 50 copies of the article lawfully made. Second, the article must be functional. The Industrial Design Act would serve no purpose if it did not protect functional features.

I’m not sure this I’m entirely convinced by this passage. Under s 64, a “useful article” is defined as an article that has “a utilitarian function.” But it is not useful articles which are exempt from copyright protection, but “a design applied to a useful article.” So, dinner plates are useful, but the design applied to a dinner plate may be purely decorative. The design would be excluded from copyright protection even though the design itself is not functional. As I read his decision, Barnes J indicated that certain features were excluded because the design itself, namely “the presence of ribbing on the bottom of the tray and the location and shape of a lifting handles” “may have served both a decorative and a functional purpose” [130]. So I don’t think Barnes J’s interpretation would make the Industrial Design Act entirely pointless, as purely decorative features, such as the design applied to a plate, would still be protected.

But that is something of a quibble. The FCA holding still strikes me as essentially right. Suppose for example the featrure is a knurled pattern on a handle that enhances the grip. The pattern might be both decorative and functional. If it is applied to more than 50 articles, it would be excluded from the Copyright Act, yet it would not be patentable as being purely artistic, so it would unprotected unless the Industrial Design Act applies despite its dual function. So it seems to me the FCA was right to say that the Industrial Design Act would be under-inclusive if Barnes J’s interpretation were correct, even if it is perhaps going too far to say that it would serve no purpose at all.

The appeal relating to the ‘375 patent turned entirely on claim construction [61]. The FCA noted that while “the Federal Court’s construction of a patent’s claims will be reviewed for correctness. . . the Federal Court is entitled to deference in its appreciation of the evidence, particularly the expert evidence, that affects that construction” [43]. The appellant argued that Barnes J had ignored key evidence, but the FCA applied a deferential standard in rejecting this argument [49], as well as holding that Barnes J’s construction was correct in any event [55].

The FCA reversed Barnes J’s holding that the ‘064 and ‘265 patents were invalid for anticipation and obviousness, and obviousness respectively. Barnes J had held that “It is sufficient for the purposes of this analysis to consider the meaning and scope of claims 1 and 9 of the 064 Patent because all of the remaining claims are dependant” [106]. The FCA held that this was an error; dependent claims narrow the claims upon which they depend, so a dependent claim may very well be valid even though the independent claim is not [94]. Barnes J’s analysis of the ‘265 patent suffered from the same defect [104].

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