7 Ownership

As mentioned in Chapter 3, different kinds of individuals may be entered on the Register as the registered design owner. A common understanding of the design process would be that the designer (the person who created the design) would be the initial owner. The designer would, therefore, fill out the application form to register the design with IP Australia. However, the Act sets out five categories of individuals who may be entitled to be registered as the registered owner of a design.^[1]

Who is Entitled?

Section 13 identifies who is entitled to apply for registration, as no other person is entitled to apply for and obtain such registration. Section 14 then sets out who the registered owner is upon registration. At the point of application, it is important to correctly list entitled applicants on the application form. Disputes about who is listed as registered owners can lead to challenges in front of IP Australia or the Federal Court.^[2] Such disputes can include how an application should proceed at the application stage if there is a disagreement between applicants,^[3] changes in ownership before or after registration,^[4] or where a non-applicant claims ownership.^[5]

Read

The starting point is that the ‘designer’ is the first owner,^[6] the one who created the design. Such a person has the primary entitlement to apply for registration. The paragraph refers to a ‘person’, which is taken to mean a ‘natural person.’^[7] Of particular note, such a reference would limit the registration of computer-generated designs with the use of generative artificial intelligence.^[8]

However, the provision does not say what it takes to ‘create’ the design. This was a similar position under the previous 1906 Act that referred to an ‘author’ of the design.^[9] In 1985, Smithers J of the Federal Court provided the following explanation as it related to an ‘author’ of a design in Chris Ford Enterprises Pty Ltd v BH & JR Badenhop Pty Ltd: ^[10]

…authorship is in the person whose mind conceives the relevant shape, configuration, pattern or ornamentation applicable to the article in question and reduces it to visible form.

The Federal Court followed the same approach under the 2003 Act in LED Technologies Pty Ltd v Elecspress Pty Ltd.^[11] Smithers J’s explanation sets out two elements that need to be satisfied for a person to create a design. First, the person conceives the design, either as the result of mental or intellectual processes and second, the person renders it in a visual representation (for example, drawing or painting). ^[12]

Section 13 (3)(a) makes it clear that more than one person may be entitled to be entered on the Register as the registered design owner. Unlike the Copyright Act 1968 (Cth), which makes references to joint authorship of creative work,^[13] there are no equivalent references to ‘join designership’.^[14] Therefore, there is no guidance under the Act about what each co-designer must contribute when creating a design. Despite this, contributions to the creation of a design can be relevant when determining who is entitled to apply for and obtain such registration.^[15]

Paragraphs 13(1)(b)-(e) lists the other individuals who are entitled to register as the registered owners of the design. However, before a design is registered, any of these persons are barred from registering the design if they have assigned their rights in the design or the rights have devolved on another person by operation of law.^[16]

Where a person creates a design during the course of employment, the employer is entitled to register it. Determining whether a design has been created during the course of employment would involve a factual inquiry.^[17] Showing a person is employed is not enough; the creation of the design must be part of the employee’s duties, and it is something that they are reasonably expected to do.^[18] Therefore, an employee creating designs in their spare time would not entitle an employer to register the designs.^[19]

A party can also commission a design from an independent contractor. The section states that where the design is created ‘under a contract’ with another person, that other person is entitled to register the design. Furthermore, the paragraph permits the parties to agree to arrange a different outcome for employee and commission designs. Therefore, the employee or independent contractor may become entitled to apply with the employer or separately.

Other individuals may obtain the entitlement to apply for registration despite not originally creating or commissioning the design. Before a design is registered, they may derive the title from the designer or commissioner.^[20] Such individuals may derive the title to the design through assignment, obtain it as a gift or through devolution by will or by operation of law (for example, bankruptcy or intestacy).^[21]

A person can be entered on the Register where, upon registration, they would be entitled to an assignment of the design.^[22] For example, a legal obligation can be created under a contract between the designer and a third party — stipulating that the designer assigns the design once it has been registered would create. A breach of such an obligation would give rise to a remedy of specific performance rather than damages.^[23] Section 13(1)(d) permits such persons to register the design. Fiduciary or obligations of confidence may also create an equitable entitlement.^[24]

Finally, a legal personal representative of a deceased person mentioned in paragraphs (a), (b), (c) or (d) is entitled to be registered as the registered owner of a design.^[25] A ‘legal personal representative’ is further defined under s 5 to mean a person to whom: (a) probate of the will of the deceased person or (b) letters of administration of the estate of the deceased person; or (c) other like grant. Subparagraphs (a) and (b) are intended to cover legal forms used in Australia, while subparagraph (c) is intended to cover foreign grants.^[26]

Ownership of the registered design

Section 14 clearly defines the ‘registered owner’ after the registration process. The starting point is that individuals listed in the Register as the registered owners, whether single or multiple persons, will be considered as such.^[27]

The remaining provisions (s 14(2)-(4)) cover co-ownership of designs. Section 14(2) begins with the statement that co-owners are entitled to an equal, undivided share in the exclusive rights to the design. The remaining paragraphs set out the rules as to the respective rights of co-owners of a registered design,^[28] all of which are subject to any contrary agreement between them.^[29] Paragraph 14(3) deals with the third-party purchase of a product that embodies a design. The buyer and a person claiming through the buyer may deal with the product as if all the registered owners had sold it.

Read

Assignment of a design

Ownership of a registered design can pass between different parties. The exclusive rights that a registered owner enjoys,^[30] are personal property and can be assigned or devolved by will or by operation of law.^[31] The owners may assign all or part of the registered owner’s interest in the design in writing.^[32] After an assignment occurs, the registered owner (assignor) or the person who received the rights (assignee) may ask the Registrar to officially record the transfer of rights in the Register officially.^[33] The Registrar will notify each registered owner of the request and record the assignment unless any other registered owner advises the Registrar that they do not consent to the assignment.^[34]

Ownership Disputes

When seeking registration, it is crucial to correctly identify the owner entitled to register the design when filling out the application. Despite the simple online form, conflicts about ownership of a design can arise at the time of application or after registration. Ownership disputes can be complex and difficult to resolve. Disputes can emerge in the following situations:

• Between the joint applicants about whether or how to proceed with the design application.
• When a non-applicant claims ownership instead of the applicant(s) or as a joint applicant.
• When recording a change of ownership before registration.

IP Australia has identified typical situations where ownership disputes can emerge.^[35]

When can an ownership dispute occur?

Ownership disputes can occur at any time during the lifecycle of a design registration. Overall, the types of disputes can include:

1. Disagreement between joint applicants on whether or how an application should proceed.
2. Disputes about recording a change of ownership before registration.
3. Non-applicants claiming ownership after a design is registered or certified.

Under the Act, the Designs Office or a prescribed court can resolve disputes that arise during the lifecycle. The diagram below shows you which points in the lifecycle a dispute can emerge and which sections of the Act are relevant.

Whether and how an application should proceed

Joint applicants may disagree on how to proceed with an application. Although rare, one applicant can block another from moving forward. Specific disputes among joint applicants have arisen in patent cases — including, for example, when one applicant refuses to sign a document or requests that the application proceeds in their name only.^[41]

Disputes between joint applicants about how a design application should proceed are dealt with under s 29. Read the section below.

The outcomes of these disputes can include deleting an applicant who deliberately blocks the application or requiring all parties to agree on all documents to be filed.^[42]

Read

A non-applicant claims they have the right to apply

A non-applicant claiming entitlement to be a registered design owner may occur before or after a design is registered. The likely outcome sought by these individuals would be to add themselves as a new or additional applicant to a design. The non-applicant could make an application under sections 29 or 51. The result of the application would not be a new application, but rather a change to the existing application.^[43]

If the design application has been registered or published, the Registrar will not make a determination under section 29. The ownership dispute will be handled under section 52 (discussed below). However, if an application has yet to be registered or published, a non-applicant may still suspect they are the entitled owner and make an application under section 29.

As discussed in Chapter 3, a design application is not open for public inspection until it is registered. Therefore, non-applicants may find it difficult to argue their claim to entitlement without seeing what is in the application or even knowing about it in the first place. If the non-applicant is aware, the parties can agree to exchange documents without involving the Registrar to help settle the dispute.^[44] Otherwise, section 61 will restrict unpublished documents from being made available for inspection. In some situations, if a non-applicant makes an application under section 29, the Registrar may permit a section 29 application to convert to a section 51 proceeding.^[45]

Change of ownership before registration

Once an application has been submitted, a change of ownership, such as an assignment of rights, could occur before it is registered. If this happens, it can be recorded under section 30 of the Act.

Although it can be rare,^[46] disputes about the process of recording a change can occur. If there is a dispute about ownership before registration, the Registrar will address it under section 29. IP Australia has identified the main issues when assigning or transferring the title of a design that can lead to problems in recording changes, including:^[47]

• errors in an assignment document.
• time-limited assignments and partial assignments.
• entitlement of a later registered owner.
• assignment by a co-owner.

Change of ownership before registration after lapsing

As discussed in Chapter 3, an application can lapse during the application process —that is when an applicant does not address a formalities notice. Despite this, a dispute between applicants about how to proceed with an application could still occur.^[48] If an application has lapsed, IP Australia will only consider how the application is to proceed if there is an outstanding request to restore the application made pursuant to section 137.^[49] The Registrar will decide whether to simultaneously consider the restoration with the ownership dispute after reviewing the facts of the case.^[50]

Revocation on Grounds Relating to Entitled Persons

Ownership disputes are more likely to emerge once an application is registered and its contents are open for public inspection. Non-applicants may claim that they are entitled to register the design, either instead of the applicant or as joint applicants. Because the design is registered, it cannot be dealt with under section 29. Therefore, the non-applicant must request that the Registrar revoke the design. If entitlement is established, the registered design is revoked, and a written declaration is issued stating who was entitled to register the design when it was registered.^[51] During court proceedings relating to a registered design, a court can also declare who was entitled to register the design.^[52] The correct owner can then apply to register the design in their own name and retain the priority date of the initial application.^[53]

Competing ownership claims of a registered design will go before the Registrar in a hearing to assess the claims. Under the Act, a third party can apply {form} under s 51 to revoke the registered design based on ownership entitlement. IP Australia will first assess the application, and if there is an arguable case, the registered design owners are given a copy of the request and asked if they will contest the claim.^[54] Otherwise, the application will be dismissed.^[55]

Sections 52 to 56 of the Act provide for resolving disputes on questions of who was entitled at the time of first registration of the design. This includes assessing the entitlement of each person entered in the Register as the registered owner at the time the design was first registered (called an ‘original registered owner’),^[56] and whether other individuals were entitled to be registered owners.^[57]

Subsection 52(2) contains the grounds for revocation. These grounds anticipate the typical situation in which a non-applicant to the original application claims they were entitled to register the design. A registered design will be revoked if, when the design was first registered, one or more of the original registered owners was not an entitled person, and another person or persons was entitled to register the design.^[58] In addition, where each original registered owner was entitled at the time of registration, another person or persons was also entitled at that time.^[59] The remaining provisions set out the process which follows. The Registrar has the right to decide how to handle requests for s 52 revocation in each case.^[60] Read the section below. Interestingly, any third party can claim that another person or persons were entitled to the design when it was first registered, leading to revocation of the design.

Read

Revocation Process

An ownership challenge will likely lead to a hearing in front of the Registrar. IP Australia sets out the process for dealing with an application submitted under section 51.

The revocation process flowchart, Mitchell Adams (CC BY-NC)

Read

IP Australia’s overall process that follows is set out below.^[61]

Case examples

The following case examples demonstrate the application of the revocation provisions at the Australian Designs Office.

Read

Read Metroll Queensland Pty Ltd v Collymore [2008] ADO 8, where the Design Office considered the revocation of three designs for modular rainwater tanks. Metroll claimed entitlement to designs registered by their factory foreman Mark Collymore and his company, arguing they were created during the course of employment. The case provides crucial guidance on when designs created by employees belong to employers, adopting principles from patent law about inventions made during employment. It explores how employment duties and specific workplace directions affect design ownership, distinguishing between designs created independently versus those resulting from work tasks. The decision is particularly valuable for understanding how employment contracts and workplace relationships impact design rights, demonstrating that merely being employed by a company does not automatically give that company rights to all designs created by an employee.

Read

Read Allen Hardware Products Pty Ltd v Tclip Pty Ltd [2008] ADO 7, where the Design Office considered the revocation of eight designs for joiners used in construction. Tclip claimed joint entitlement to designs registered solely by Allen Hardware Products (AHP), arguing AHP had developed the designs using confidential information Tclip disclosed when seeking manufacturing assistance. The case provides crucial guidance on implied confidentiality in business relationships and joint design ownership. The hearing officer explored how design rights can arise from collaborative development, even when one party refines or modifies another’s initial concept. The decision is particularly notable for establishing that patent law principles about joint inventorship can apply to determining joint design creation. The hearing officer also provided detailed guidance on the practical implications of joint design ownership and the options available to disputing parties.

Read

Read John Michael Jarvie v Comtec Industries Pty Ltd [2018] ADO 5, where the Design Office considered the revocation of two designs for retaining wall components registered by Comtec Industries. John Jarvie claimed he was the sole designer and entitled person for both designs, despite not being listed as designer on either registration. The case provides crucial guidance on determining true designership and entitlement, particularly the principle that being a designer is a question of fact that cannot be altered by external factors like financial status. The hearing officer carefully analyzed evidence of the designs’ development history and the nature of relationships between the parties to determine who truly conceived the designs. The decision also explores the limits of the Registrar’s powers to alter design ownership after registration, highlighting that revocation may be the only available remedy even when the true designer is identified.

Read

Read Lyons Airconditioning Services (WA) Pty Ltd [2022] ADO 1, where the Design Office considered the revocation of a design for a caravan air pressurisation unit. Lyons Airconditioning claimed they were entitled to ownership of the design registered by Kedron Caravans, arguing Kedron had copied their existing ‘Carafan’ product after having access to it. The case provides important guidance on how design entitlement is determined, particularly when dealing with allegations of copying and claims of substantial similarity between designs. The hearing officer carefully analyzed the evidence of design development, access to prior products, and visual similarities/differences between the designs. The decision illustrates that simply having visual features similar to those of an existing product is not enough to establish entitlement – evidence must specifically demonstrate the creation of the registered design itself.

Read

Read Manuel Canestrini v Ilan El [2020] ADO 2, where the Design Office considered the revocation of two designs for the “Cannon Vase” filed by Ilan El. Manuel Canestrini, a former business partner of El, requested revocation, claiming he was the true designer and entitled person for both designs. The case provides valuable insights into how the Design Office determines design ownership and entitlement when faced with competing claims. In particular, the registered owner did not participate in the matter.

Through careful examination of the evidence, including email correspondence, design iterations, and public exhibitions, the hearing officer found Canestrini was the sole designer of one design but not the other. The decision demonstrates the importance of maintaining clear records of design development and highlights how different pieces of evidence are weighed when establishing who created a design.

Revocation after Certification

Ownership challenges can also occur after IP Australia has certified a design. Competing ownership claims of a certified design will need to go before a prescribed court to assess the claim.^[62] The grounds for rectification are found in subsection 93(3) of the Act. Read the provision below.