The companies behind these products have used design to create valuable business assets and build their competitive advantage in the marketplace. They have also carefully protected these assets through a variety of intellectual property (IP) rights including registered designs.

What is a registered design?

A registered design is a form of intellectual property that protects the way a product looks. A design can cover both two-dimensional and three-dimensional visual features including a product’s shape, structure, pattern and decoration.

To be protected in Australia a registered design must be new. This means that it can’t be identical to any existing design used in Australia or published anywhere in the world. It must also be distinctive, which means that it can’t be substantially similar in overall impression to any existing design used in Australia or published anywhere in the world. Protection can last for up to 10 years.

Registered designs are different to other IP rights such as patents, which protect how a product works, and trade marks, which protect a product’s branding. Registered designs are all about appearance.

The Breville Smart Grill, the new Qantas Q bag tag and check-in kiosk and the Dyson Air Multiplier fan are all designs that are registered in Australia.

Why register a design?

In today’s marketplace businesses are increasingly realising that the products they develop must not only function well but look good too. Innovative product design often generates favourable press, customer interest and loyalty, and allows a company to command a price premium over competing products.

Unfortunately, good design also tends to attract copycat, me-too manufacturers who try to capitalise on visual innovation by manufacturing cheaper, lower quality imitations of design-driven products.

Design registration allows a business to protect the investment it has made in design and product development. It gives the owner the exclusive legal right to manufacture a design and thereby protect market share. It is an intangible business asset which can grow in value and be sold or licensed to generate revenue. Importantly, it can enable a business to take action against copycats for design infringement.

In some cases, a design may be automatically protected by copyright. However, copyright for certain three-dimensional products can be lost if they are manufactured on a larger scale. In any event, registered design protection is often preferable to relying on copyright as infringement tends to be easier to prove. The laws relating to the overlap between designs and copyright are complex and you should seek professional advice relating to your own particular circumstances.

Manufacturers of design-driven products across a variety of industries such as furniture, consumer appliances, homewares, electronics, cars, packaging, clothing, footwear and accessories can all benefit from registering their designs. The owner of a registered design is generally the designer or the designer’s employer.

When you are about to launch a new product, nothing is more depressing than having some little guy turn up at the reception desk and say I’d like to see the managing director please’. After some formal pleasantries he says, “I understand that you are about to launch a new product this week, but are you sure you own the trademark?” And then pulls out of his bag a rough-looking homemade product that sure as hell carries your brand name.

The next few words you can probably predict, in a most polite way he says, “It can be yours, of course, if you are prepared to part with US$150,000. Oh by the way, cash will be fine”. A series of telex’s later and sadly, at least for me, the little guy was right, he certainly owned the mark and incidentally a whole range of other trade marks of many high ranking multinational companies spread across the world.

This may not be common, but I fear technology has made it easier. It does happen and it happens not only to the small unsuspecting companies but also to the big guys who, of course, are a much more valuable catch.

In my case and, I suspect, in most cases it was just a matter of money, but it did cost, and it cost in many ways. The first step of course is the solicitors and the argy bargy between his brief and ours. What is different here is that you are in foreign country, all the solicitors know each other, you sadly are the outsider.

Weeks go by and finally an outcome between the solicitors is reached. How the final money was divvied up between the three is anybody’s bet. It cost too, in a delayed launch, lost sales and in reputation, the ‘trade’ was less than forgiving.

The other case was different as it really was just a try-on by a competitor to create doubt and confusion. I simply received a solicitor’s letter suggesting that my product possibly breached the patent of a local manufacturer. Again it resulted in some fairly expensive legal work, occupied my time and the time of my staff. It became known in the ‘trade’, and prompted questions from many who we relied on to drive the business through the distribution network. It was resolved but money was spent unnecessarily and a small amount of the dirt did stick.

The thing is competition in some parts of the world can be dirty. There are people, ‘ambulance chasers’, who grab trade marks for their country as soon they appear and others who will go to any length to disrupt your normal trading pattern. These two cases are relatively minor in the context of things and the outcomes were on the right side of the ledger. But they did cost time and money.

My recommendation to anybody is to do your homework first. In a recent article written by Kelly Allison from IP Australia she says, “Before embarking on an export strategy, businesses typically go through a series of crucial steps, obtaining credit, identifying desirable markets and estimating demand; but many fail to think about intellectual property (IP),” and from my experience Kelly is right.

She goes on to say that “during a recent survey conducted by IP Australia 41 percent of exporters did not address the topic of IP ownership and confidentiality with their employees, which is one area of risk that would be identified in an IP audit. Before you consider exporting, conducting an IP audit should be top of your list, in order to guard against copycats and protect your brands and profit”, a recommendation I fully endorse.

One place to start is to log in to Intellectual Property Explorer (www.intellectualpropertyexplorer.com) which is a free, fast and easy online tool to help identify and protect your IP assets. IP Australia also produces a range of Exporting Fact Sheets on major markets which are freely available on its website www.ipaustralia.gov.au.

Having worked in various parts of the world, nothing surprises me in terms of the range of copycat products seen on the supermarket shelves, how quickly top movies are available on DVD and how posters bearing photos taken here last week are on the streets in India, China or Indonesia today.

Doing your homework is mandatory, and so too is having the right legal team on your side if things do go wrong. Australian legal firms have relationships with many firms that operate in foreign markets, it really is in your best interest to make sure you get the right advice upfront and have the advisors in place for if and when you need them. Having people turn up at your reception with a demand or receiving letters from solicitors from places outside of Australia is no fun.

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A mechanism exists under the Patent Cooperation Treaty (PCT), administered by the World Intellectual Property Organisation (WIPO), whereby applicants can make international patent applications, however this merely simplifies the process to make national applications in each PCT member state (of which there are over 125) and protects the applicant’s rights to a national application for a limited power of time.

Similarly with trade marks, international registrations can be made via the Madrid Protocol (to which there are currently 84 member states, but of Latin American countries, only Cuba is a member state) and the Paris Convention (to which there are over 100 members), however there is no mechanism in place that provides international ‘blanket’ patent/trademark protection.

Significant benefits arise from these international treaties/conventions, however many applicants and/or patent/trade mark owners misunderstand their international IP rights. Depending on the status of any patent/trademark application with IP Australia, further applications can leverage off those IP Australia applications courtesy of these treaties/conventions.

All Australian businesses that currently operate, or intend to operate, in the Latin American market should review their current IP rights in relation to the region.

IP applications in Latin America

National applications need to be made in each individual country in Latin America and in some countries, for instance Brazil, the process can take a minimum of three years until final registration. In general, however, the process takes approximately two years from application until final registration, presuming that no objections are raised by the authorities or the public.

All applications need to be filed in Spanish, except Brazil, which requires that the IP Rights in Latin America application is filed in Portuguese, and those translations need to be certified.

The applicant may choose to have a local representative in that country of application, and that relationship will need to be evidenced in the form of a power of attorney from the applicant to the agent.

Just like those applications in Australia, the application will need to include designs and/or drawings (in the case of patents), logos, descriptions of those goods/services in which it seeks to protect its trademark and so forth.

Applications are reasonably straightforward, however the authorities can take a hard line on accepting some trade marks in the event of the prior registration of a same and/or similar trade mark, and even in some cases where the chances of there arising confusion in the market are minimal. Any objection raised by the authorities, can be appealed by the applicant.

Practical Tips

It is common to see Australians come to Latin America and market their product and/or service, for example through various trade shows, set up, trade and then realise they have no protection, or even worse are in infringement of a third party’s IP rights.

Before setting up, ensure your IP rights are protected and check whether you can use your IP. This can be achieved by conducting quick and inexpensive searches.

From a business perspective, we have found that clients that have had their IP in order send a good message to the marketplace as they are strategically and effectively able to transact with their buyers, especially in the case where the buyer is a large multinational, which in some cases require that you are the owner of the IP rights prior to entering into a purchase contract.

In most Latin countries, the rule of law is adhered to and strictly enforced, regardless of whether or not you are a foreigner, so protection of one of your business’ most valuable asset is a worthwhile cause.

—Harris Gomez is the managing principal of Latin American specialists, the Harris Gomez Group (hgomezgroup.com)