Elster Metering Ltd v. Billions Ltd

HCMP 1951/2006

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO. 1951 OF 2006

____________

____________

BETWEEN

____________

Before: Deputy High Court Judge L. Chan in Chambers

Date of Hearing: 11 April 2007

Date of Judgment: 20 April 2007

_______________

J U D G M E N T

_______________

1.This is the Plaintiff’s application for rectification of the Register of Designs by expunging therefrom Design Number 0311733.0 (“the 1^st Design”) and Design number 0501531.2 (“the 2^nd Design”).  The Plaintiff says that at the time of their registrations, the two designs were not new and/or registrable for various reasons.

Applicable statutory provision

2.The application as pleaded appears to be made under section 66(1) of the Registered Design Ordinance, Cap. 522.  Section 66(1) of the Ordinance provides:

“66.   (1)           The court may, on the application of any person aggrieved, order the Register to be rectified by the making, or the variation or deletion, of any entry in it.”

3.When the matter was argued, the Plaintiff relied on section 45 of the Ordinance instead.  Section 45 provides:

“45.   The court may, on application by any person, order the registration of a design to be revoked on the ground that, at the time of its registration, the design was not new or was not registrable for any other reason.”

However, the Defendant did not take any issue on this and the application was argued under section 45.

Background

4.The Plaintiff and its predecessors have been manufacturers and supplier of water meters in the United Kingdom.  One of its products is the PSM cold portable water meter.  This meter has since the 1960s been manufactured in the United Kingdom and sold in various countries including the United Kingdom and Hong Kong.

5.The 1^st Design and the 2^nd Design are both owned by the defendant.  The 1^st Design is for a water meter.  It is a 2-dimensional outline sketch of a water meter with a logo in the upper part that bears the words “East Ocean” in both Chinese and English.  The statement of novelty claims novelty in the shape of the article as shown in the representation reproduced below.   

6.The 2^nd Design is for the component parts of an internal measuring chamber of a water meter.  The component parts are shown in five photographs.  The statement of novelty claims novelty in the shape or configuration of the articles as shown in the photographs.

Grounds of application

7.The Plaintiff’s grounds are based on sections 2, 5 and 6 of the Ordinance.

8.For the 1^st Design, the Plaintiff says that it is not a design as defined in section 2.  It is also not new and has no novelty as required by section 5.  Furthermore, it is not registrable under section 6 because the appearance of a water meter is not a material consideration for its purchase.

9.For the 2^nd Design, the Plaintiff says that it is not a design as defined in section 2.  Its shape or configuration is dictated solely by the function it has to perform and is thus further excluded from section 2.  It is also not new and has no novelty as required by section 5.  Finally, it is not registrable under section 6 because the appearance of the internal measuring chamber of a water meter is not a material consideration for the purchase of a water meter.

Burden of Proof

10.There is no dispute that the burden of proof is on the Plaintiff.  The parties also agree that there is no presumption of validity by virtue of the registration of the two designs.  The Ordinance does not provide for such presumption.  This is perhaps because the Registrar does not carry out any vetting of registrability before allowing registration.

THE 1^ST DESIGN

Section 2-Is it a design?

11.Section 2 provides the definition of “design” and the relevant part stipulates that:

““design” means features of shape, configuration, pattern or ornament applied to an article by any industrial process, being features which in the finished article appeal to and are judged by the eye, but does not include-

(a)          …; or

(b) features of shape or configuration of an article which-

(i) are dictated solely by the function which the article has to perform; or

(ii)        …”

12.I refer to Russell-Clarke and Howe on Industrial Designs, 7^th edn. at paras 3-17 to 3-19:

“3-17  … In a classic statement of what constitutes a design …, Lord Wright in King Features Syndicate Inc and Betts v O & M Kleemann Ltd (the Popeye case, (1941) 58 RPC 207 at 219) said:

“… thus a design may be the shape of a coal scuttle, a basin, a motor car, a locomotive engine or any material object, it may be the shape embodied in a sculptured or plastic figure which is to serve as a model for commercial production, or it may be a drawing in the flat or a complex pattern intended to be used for the manufacture of things such as linoleum or wallpaper.”

3-18    Thus a design may consist either of a shape which is in three dimensions, or of a pattern which is in two dimensions, and that shape or pattern must be applied to an article or articles.  An article can quite well exist without any pattern upon it, whereas, it can have no existence at all apart from its shape or configuration.  Thus, where the design is for a shape, it is really applied to the article by being incorporated into it, rather than applied to it in the literal sense of the word.  As Lindley LJ put it in Re Clarke’s Registered Design ((1896) 13 RPC351 at 358): “A design applicable to a thing for its shape can only be applied to the thing by making it in that shape.”

3-19    … Shape and configuration both signify something solid, in three dimensions, in fact, the form in which the article itself is fashioned. …”

13.The 1^st Design is for the shape of a water meter.  However, it only shows the 2-dimensional outline of the water meter.  In Ford Motor Company Limited’s Design Application [1972] PRC 320, the representation also showed one view only of a car wheel and the statement of novelty claimed novelty in the shape and configuration of the wheel as shown in the representation.  It was allowed to register.  Whitford J said at p.330:

“In design cases the really important and significant question to my mind is: Does this application adequately show the design features which the applicant desires to protect in such a way that when he has secured his monopoly there will be no difficulty in ascertaining, when you look at the representation, what the design features are?

In truth to my mind in this case it is abundantly clear in the way the application has been framed that the appearance of the wheel from the side or the back is utterly irrelevant from the point of view of the claim to a design which as been made and in those circumstances inclusion of pictures of the side and the back would be a positive disadvantage.

… I think the application ought to be allowed to proceed with the single representation in the form shown, save only for this, that I think the statement of novelty could be improved so that instead of reading ‘the novelty resides in the shape and configuration of the wheel as shown in the representations’, it should read, ‘the novelty resides in the shape and configuration of those parts of the wheel shown in the representation excluding the tyre and the parts marked with the blue cross’, and it will then be apparent on the statement of novelty that no question of design features arises in relation to the side or the back, and with such a statement of novelty I think that really satisfactory protection will be given to the applicants, and satisfactory information given to anyone who may have to decide what the area of monopoly is.”

14.However, the 1^st Design in this case does not claim novelty in any part shown in the representation, it claims novelty in the shape of a water meter as shown in the representation.  The appearance of the water meter from the side or the back is relevant and should be revealed.  But the representation does not show the 3^rd dimension which can be a circle, a square, a rectangle or even a triangle.  One therefore cannot tell from the representation what the shape of the water meter or the area of monopoly is.

15.The Plaintiff thus submits that the 1^st Design has failed to show the shape or design features of a water meter and does not come within the definition of design in section 2.  If the 1^st Design should be allowed to remain on the Register, other manufacturers and suppliers of water meters will not know what shape of water meter has been monopolised by the Defendant.  The Defendant has not dealt with this argument either in the affirmations or in the submissions.  This argument is obviously correct and I would revoke the 1^st Registration on this ground. 

16.The Plaintiff further submits that section 2 requires a design to appeal to and be judged by the eye of the customer (Amp Inc v Utilux Proprietary Ltd [1972] RPC 103 at 109 lines 10 to 13).  But the Plaintiff says that the 1^st Design does not have such appeal to its customers who are water authorities.  The Defendant assumes that the water meter made according to the 1^st Design would have a cylindrical shape with a frontal 2-dimensional impression appearing the same as the 1^st Design.  On this assumption, the Defendant argues that the water meter as made does appeal to the eye of the customer. 

17.However, I am only concerned with the 1^st Design as shown in the representation and not the water meter as the Defendant may wish to refer to or manufacture.  Since the 1^st Design cannot satisfy the definition of design in section 2, there is no material for consideration under this other ground which is also under section 2.

Section 5-Novelty?

18.The Plaintiff’s next argument is the lack of novelty in the 1^st Design.  This argument is based on section 5 of the Ordinance and the relevant part stipulates:

“5.	(1)	Subject to this Ordinance, a design which is new may, upon application by the person claiming to be the owner, be registered in respect of any article or set of articles specified in the application.
	(2)	A design for which an application for registration is made shall not be regarded as new if it is the same as-
		(a)      …; or
		(b)     a design that has been published in Hong Kong or elsewhere before the filing date of the application, whether or not that design has been published in respect of the same article for which the application is made or in respect of any other article,
		or if it differs from such a design only in immaterial details or in features which are variants commonly used in the trade.”

19.In making this argument, the Plaintiff shares the Defendant’s assumption that the water meter made according to the 1^st Design would have a cylindrical shape with a frontal 2-dimensional impression appearing the same as the 1^st Design.

Has the Plaintiff’s design been published before?

20.The Defendant’s first answer to this attack is under section 5(2)(b).  It says that there is no evidence that the design of the particular PSM water meter that the Plaintiff’s witness Mr Cole has exhibited in his affidavit in these proceedings had been published before the filing date of the application of the 1st Design.  The Defendant refers to a statement by Mr Cole in his 2^nd affidavit that “the design of the Plaintiff’s PSM meter is continuously evolving”.  The Defendant says that this statement implies that there are a number of different versions of the Plaintiff’s PSM meter and there is no evidence that the particular version exhibited by Mr. Cole in his affidavit had or had not been published before.  However, I would refer to para. 4 of Mr Cole’s 1^st affidavit:

“4.     The Plaintiff and its predecessors have been manufacturers and supplier of water meters in the United Kingdom for more than 100 years.  One of the Plaintiff’s most successful products known in the industry is the ‘PSM’ cold portable water meter.  Some 70 million such meters have been sold worldwide.  The PSM water meter design has since the 1960s been manufactured in the United Kingdom for sale in a number of countries including United Kingdom, Australia, New Zealand, Hong Kong, Belgium, France, South Africa, Canada, Singapore, Malaysia, Zimbabwe, Sri Lanka, Mauritius and Puerto Rico.  There is now produced and shown to me marked ‘RC-1’ a bundle containing a true copy of a Spare Parts List and exploded drawing of the PSM water meter dated July 1966, a PSM leaflet of Kent Meters, Inc. (a subsidiary of ABB Metering) and a PSM leaflet of ABB Metering which I believe to be dated from 1999.  Both leaflets are in any event dated prior to 4 December 2002, when the company changed its name.”

21.ABB Metering Limited was the name used by the Plaintiff between 15 January 1999 and 4 December 2002 and it changed to its present name on the latter date.  Mr Cole in the above paragraph was clearly saying that the PSM meter shown in the exploded drawing was the meter that had since the 1960s been manufactured and sold in the number of countries including the United Kingdom and Hong Kong.  This is evidence of publication of the design of this particular version of water meter since the 1960s. 

22.The 1^st Registration was filed with the Registrar on 15 October 2003.  The design of the Plaintiff’s meter had been published in Hong Kong and elsewhere before that date.

23.The Plaintiff also attempted to rely on some other evidence of publication as contained in the pleadings of another High Court Action.  However, the Defendant and its supplier are not involved in that action and I do not think it safe to rely on such evidence.

Novelty?

24.The Defendant’s second answer to this attack is that the 1^st Design has obvious and essential differences from the 2-dimensional impression of the Plaintiff’s PSM meter.  The Plaintiff, however, says that the so-called differences are in the immaterial details.  Russell-Clarke and Howe says in paras 3-151 and 3-152:

“3-151   It has always been the case that mere slight variations from articles already manufactured are not registrable, that the variation from what has gone before must not be trivial or infinitesimal, and that small variations which any skilled workman might make between the articles which he makes for different customers are not enough.  …

3-152    The question which has to be decided is whether the two appearances are substantially the same or not.  That the eye, and the eye alone, is to be the judge of identity, and is to decide whether one design is or is not an anticipation of another, has been consistently laid down.  The design must be looked at as a whole (Re Clarke’s Design (1896) 13 RPC 351 at 360), the question being whether an article made according to the design under consideration is substantially similar in appearance to an article made according to the alleged anticipation.  The test is not only to look at the two designs side by side, but also apart, and a little distance away (Grafton v Watson (1884) 50 LT 420).  The novelty should in other words be substantial (Le May v Welch (1885) 28 Ch D 24 at 34), and it must be substantial having regard to such matters as the nature of the article, the extent of the prior art and the number of previous designs in the field in question.  …”

25.The Defendant has exhibited the 1^st Design alongside the 2-dimensional impression of the Plaintiff’s PSM meter for comparison.  The comparison is reproduced below:

26.The Defendant stresses the difference between the upper and lower edges of the two meters.  The edges of the Plaintiff’s meter are curved whilst the edges of the 1^st Design are cut in a slanted fashion resulting in angular edges.  However, when the 1^st Design is looked at as a whole at a little distance from the impression of the Plaintiff’s meter, it looks more or less the same as the Plaintiff’s meter.  The so-called differences do not make any significant visual impact.  I therefore revoke the registration of the 1^st Design on this additional ground of lack of novelty as well. 

Section 6-Eye appeal material?

27.The Plaintiff further attacks the registrability of the 1^st Design by saying that customers who purchase water meters primarily for their function and pay little or no attention to their appearance.  This attack is grounded on section 6 which stipulates:

“6.     A design is not registrable in respect of an article if the appearance of the article is not material, that is, if aesthetic considerations are not normally taken into account to a material extent by persons acquiring or using articles of that description, and would not be so taken into account if the design were to be applied to the article.”

28.Russell Clarke and Howe discusses the English equivalent of this section in para. 3-76:

“… It should be noted that this subsection is not, strictly speaking (unlike the requirement of eye appeal and the exclusion of functional features) part of the statutory definition of design.  Instead, it purports to relate to a category of designs, which satisfy all the requirements of the statutory definition of design in section 1(1), but which are to be excluded from registrability.  To fall into this excluded category, a design must consist of features having “eye appeal”, but, on the other hand, the appearance of the article to which the design is applied is “not material”.  Since the requirement of eye appeal has been interpreted as requiring that the features concerned must appeal to the eye of the customer in the sense of materially influencing the customer to buy the article, it is extremely difficult to envisage any circumstances where the exclusion from registrability in section 1(3) can possibly bite.  Possibly, it is to be regarded as simply a legislative backstop.”

29.I agree with this construction of the section which only excludes registration of articles that have eye appeal.  For articles that do not have eye appeal, they are already excluded by the definition of design in section 2.  It is not necessary to apply section 6 to them. 

30.The Plaintiff asserts that aesthetic considerations are irrelevant for the purchase of water meters by water authorities.  It refers to the tender documents of the Water Supplies Department of the Hong Kong Government for water meters which do not suggest that aesthetic considerations are taken into account.  There is however no direct evidence from the officers of the Department who are responsible for purchasing water meters.

31.The Defendant has produced an affirmation from an officer of a water supply company in Ningpo City, Zhejiang Province who testified that aesthetic considerations were taken into account in the purchase of water meters. 

32.Though the tender documents of the Water Supplies Department in Hong Kong do not suggest that aesthetic considerations are of any importance, I do not think I can say that the officers responsible for the purchase of meters would pay no attention to this aspect.  Given two different meters which are of comparable accuracy, durability and price, it is likely that the one that has better aesthetic appeal would stand a better chance of being chosen.  However, as I have already held that the 1^st Design does not amount to a design for the purpose of the Ordinance, I do not think section 6 needs to be applied to it.  But if the 1^st Design can be accepted as a design of a 3-dimensional water meter in a cylindrical shape, then I do not think the Plaintiff’s argument under section 6 can prevail.

THE 2^ND DESIGN

33.The Plaintiff attacks the 2^nd Design by relying on the same sections of the Ordinance.  The 2^nd Design is for the component parts of the internal measuring chamber of a water meter.  The representation is in five photographs showing these component parts. 

Section 2-Is it a design?

34.The Plaintiff cannot say that the 2^nd Design has not shown the shape of the component parts of the measuring chamber.  However, the Plaintiff must succeed in its argument that the 2^nd Design has no appeal to the eye.  It is obvious that the design of the component parts is dictated solely by the function they perform as they are not visible from the outside.  I cannot imagine how the appearance of the parts of the internal measuring chamber of a water meter can affect the decision of whether to purchase the meter.  I therefore revoke the registration of the 2^nd Design on this ground.

Section 5-Novelty?

35.Regarding the argument of novelty, the component parts of the 2^nd Design also look almost exactly the same as the corresponding component parts of the Plaintiff’s meter.  Any difference as alleged by the Defendant is immaterial and does not make any visual impact.  I therefore revoke the registration of the 2^nd Design on this ground as well.

Section 6-Eye appeal material?

36.On the 3^rd ground, since I have held that the 2^nd Design is of component parts that are kept inside the meter and has no eye appeal, section 6 would not be applicable.

Decision

37.Since I have revoked the registration of both designs, I would further make a costs order nisi that the Defendant do pay the Plaintiff the costs of this application.

38.The Plaintiff has prepared a draft bill of costs for gross sum assessment in anticipation of a favourable decision.  If the parties cannot agree on the quantum of costs within the next 28 days, either party may apply to the Listing Officer for a 30-minute hearing before me for the purpose of gross sum assessment.  The parties have in fact agreed to take this course.

Mr Lewis Ho, of Messrs Lovells, for the Plaintiff

Mr Philips Wong, instructed by Messrs Johnson, Stokes & Master, for the Defendant