Acid demands tougher measures against IP theft

Describing an object or someone’s taste as ‘cheap’ used to be an insult, but bragging about budget store bargains now counts as status-raising small talk. The less it cost, the more savvy a consumer you are.

But cheap could soon mean nasty once again. A recent spate of high-profile design theft cases has tarnished the image of cheap chic. Last month, Philip Green paid out £12 000 to Chloe for a ripped-off dress design, and in September last year, New Look paid £80 000 damages to Jimmy Choo for copying a sandal design. Furniture designer Mark Wilkinson recently set a precedent by successfully pursuing a construction case against architect Rance Booth & Smith, kitchen contractor Thirteen Twenty and homeowner Jenny Garforth for colluding to fake his Mai kitchen design.

In a drive to quantify not only the fiscal but also the emotional effects of intellectual property theft on designers, the Government has issued a Consultation on Damages that could result in harsher penalties for design thieves.

The consultation issues directly from the findings of the Gowers Review of Intellectual Property, commissioned by (now Prime Minister) Gordon Brown in December 2005. ‘The Government is reconsidering the way damages operate and wants any future legislation to be informed by people who work in the area,’ says a spokesman for the Ministry of Justice. The consultation document asks for stakeholders’ opinions on damages through every aspect of law, but two of its 44 questions relate directly to design (see box).

Anti Copying in Design chief executive Dids Macdonald has seized the opportunity to argue that companies copying designs need to be made an example of. ‘The law must deter companies from design rights theft,’ says Macdonald. ‘If they knew they could be penalised for the gains they make through copying designs, that the wrongdoer would be punished and that they would have to pay proper compensation to the victim for loss of profits and moral outrage, companies would be far more reluctant to copy.’

Acid is calling for design damages to be upgraded from ‘additional’ to ‘aggravated and restitutionary’ damages.

Design theft is considered a ‘soft’ crime, with cases heard in the civil courts, whereas copyright theft is a criminal offence and can result in lengthy prison sentences.

Even if legislation does alter in support of designers, consumers’ attitudes must also change, finds a report published last month by law firm Davenport Lyons. According to Counterfeiting Luxury: Exposing the Myths, almost two-thirds of UK consumers – an increase of 20 per cent on 2006 – are ‘proud to tell family and friends they bought fake luxury [goods]’.

‘The social acceptability of fake goods is a deeply concerning shift in consumer behaviour,’ says Simon Tracey, head of intellectual property and brands at Davenport Lyons. Given the balance of findings in our report, the time has come to tackle the UK demand for fakes head on.’

Macdonald agrees. ‘We must establish a conscience in the end user, so that they understand that theft of an intangible thing is as damaging as theft of a physical object.’

The results of the Consultation on Damages, which opened on 4 May and closed on 27 July, will be published at the end of October.

THE CONSULTATION – AND THE DEMANDS
The Consultation on Damages was published by the Ministry of Justice on 4 May

It asked design stakeholders:
• ‘Do you agree that in the Copyright, Design and Patents Act 1988 and the Patents Act 1977 the term “additional damages” should be replaced by “aggravated and restitutionary damages”?’
• ‘What are your views on how the system of damages works in relation to a) patents b) designs c) trademarks and passing off d) copyright and related rights?’

Acid’s demands:
• Aggravated damages: The mental distress and moral outrage of IP theft must be seen to be quantified and demonstrated by the award of aggravated damages
• Restitutionary damages: This would alter the current law which stipulates that a rights owner can only recover profit made on sales of their original articles if they can show that each sale made by the infringer would have been a sale made by the rights owner
• Exemplary damages: Punishing the wrongdoer in a fair and just society. Only a very small percentage of copies are ever pursued through the courts, so on most occasions the infringer gets away with all their profit
• Conclusion: If nothing is done to remedy the levels of copying… by creating judicial support via a set of damages that hurt the perpetrators sufficiently, the UK design industry is likely to be damaged irreparably

Acid on Gordon Brown:
• Acid chief executive Dids Macdonald is encouraged by Prime Minister Gordon Brown’s appointment of James Purnell, ‘who has a great knowledge of the design sector’, as Secretary of State for Culture
• ‘I was also impressed that Brown commissioned the Gowers Review on the UK intellectual property framework in 2005,’ says Macdonald. ‘I hope he will build on Tony Blair’s acknowledgement that inventiveness is one of the UK’s greatest unique selling propositions. Brown was in Design Week’s Hot 50 in 2005, and I hope to see him there again in 2007’