Intellectual Property Perspectives: Design acquisition and commercialisation

Richard Pasipanodya

In this 48th instalment, we present a synoptic discourse on essential elements and aspects of industrial design acquisition and commercialisation.
Legislative context
In similar fashion with patents, utility models and trademarks, industrial designs may be acquired through the lodgement and prosecution of either a national or international application for registration. The latter form of application is conceptually referred to as a convention application, by which any national person (natural or legal entity) of a country which is a state party to the Paris Convention for the Protection of Industrial Property (Paris Convention) (1886) may, within six months of filing an application in a Convention country, apply for the protection of the same design in designated Convention countries.
A Convention country is simply one that is party to the Paris Convention. The Convention application is a single application in which the applicant is afforded the facility to seek protection in as many countries of choice as they desire – so-called international application. Its merit lies in its removal of the hassles of having to file separate applications in each and every country in which protection is sought. As such, not only is it a convenient streamlined acquisition procedure, but a cheaper, faster, less cumbersome or arduous process.
Who qualifies as applicant
In virtually all jurisdictions, the creator is prima facie the applicant of first instance except where there exists certain alternative arrangements or circumstances to the contrary. Alternative instances, in which the creator would not be the applicant, include:
commissioned work, in which event the person on whose behalf the design was made becomes the applicant;

employee-made design by virtue of which the employer is the rightful owner, hence qualified applicant, and

assignments and devolution of title by operation of the law, by which event the assignee and successors in title become the entitled applicants respectively.
Design joint ownership
It is perfectly possible and legally permissible for two or more persons to apply for a design registration as joint owners. In this event, each of the parties would be entitled to enjoy equal undivided shares in the ownership and commercial exploitation of the registered design, unless of course there is an agreement to the contrary by the parties.
Employee designs
As is the case with patents, the employer is only entitled to be the proprietary owner/applicant of designs made within the course and scope of their employee’s contract of employment. By course of employment is meant designs created during the currency of the contract of employment and during the designated working hours. Thus, where an employee creates the design in their spare time, outside the stipulated working hours, or at the expiration of their contract of employment, then, unless by choice they assign same to the employer, the designs so created are rightfully theirs and not that of the employer.
Meanwhile, the term scope of employment connotes designs created in the performance of duties for which the employee is contractually engaged and remunerated to perform either specifically, as ancillary or by implication. This term has the further import of applying special skills and competencies for which the employee is contractually obligated to exercise and discharge to the benefit of the employer in exchange of fair and commensurate compensation or remuneration as would have been mutually agreed upon by the parties.
Formalities for registration
The application as lodged must contain all the statutorily stipulated documentation, with full information, and accompanied by the prescribed fees, or else it would fail to be registered for lack of compliance with formality requirements. More importantly, it must contain the descriptive statements on the basis of which the scope of protection sought would be determined and thereby demarcated and circumscribed. This definitive statement is the equivalent of claims in patent application insofar as the novelty or originality of the design is to be determined.
Further, the sought-for design registration must be with respect to a particular class or classes of goods. Design registration with reference to classes of goods is very important as it is key to issues of infringement. There would be no infringement by similar design outside the stated class(es) of goods.
Commercial exploitation of designs
The owner of the design is at liberty to either commercially exploit the design by themselves or through third parties. Third party commercialisation may either be through licensing or assignment of the design rights. Whatever mode of third party commercialisation opted for, the driving motive thereto is more often than not the desire to access and increase one’s market share as would be conceivably practicable, hence increase profitability, while at the same time undertaking further creative endeavours and activities in the same or other spheres of technology. This has inevitably become big business in this increasingly digitalised global village.
Licensing option
Whereas the assignment of designs is the outright and unconditional surrender of the rights and title to the design to the assignee, design licensing may be done in whole or in part upon stipulated terms and conditions without devolution or permanent transmittal or transfer of ownership in title of the design to the licencee. Under the circumstances, in view of the importance of the economic motive underlying licensing agreements, it is very crucial that the parties grasp and master certain fundamental matters and ancillary aspects pertaining to the licensing agreement, in particular adequacy of expression of legal validity of contractual terms and conditions (contents).
Adequacy of expression
Adequacy of expression of the contractual terms and conditions is critical not only to the licensing arrangement but to its performance and enforcement. Thus the contracting parties have to satisfy themselves that the following fundamental matters and contentious issues are clearly, precisely and concisely captured, inter alia (among other things):
The possibility of premature contractual termination on good cause shown and upon due notice being given, and parties’ rights in such an eventuality;
Accounting and verification of financial data with respect to royalties entitlement;
Minimum royalties payable and mode of payment;
Responsibilities of the parties as regards renewals and maintenance fees payments;
Quality control and product liability, and
Jurisdiction, applicable law and mode of dispute resolution and settlement.
Legal validity
Most jurisdictions across the globe have shown increased distaste for certain licensing fetters which unreasonably and inequitably restrain the licencee’s commercial exploitation of the licensed rights or are contrary to public interest. They have either have statutory provisions mitigating or altogether outlawing such terms and conditions, inter alia:
The licensing agreement automatically terminates upon lapse or expiration of the protection period, and thus mutual obligations between the parties thereby cease;
The right to make the design articles also carries with it the implied inalienable rights to use, work with, practice, dispose of or import the article;
Any condition that restricts or prohibits the licencee from using any articles other than those under the design licences require the licencee to acquire other related articles not related to the licensed design from the licensor, or preclude the licencee from working the design in other countries where protection is not sought would be null and void ab initio (legally invalid and unforceable from the onset).

Pasipanodya is an IP consultant who writes in his own capacity. Feedback on: mobile +263 775053007, or e-mail:henripasi@gmail.com.