Canada: Federal Court Of Appeal Clarifies Industrial Design Act

In Zero Spill Systems (Int’l) Inc. v Heide (Zero Spill), the Federal Court of Appeal (FCA) has clarified that a functional feature of an industrial design may be protected under the Industrial Design Act.

The underlying action involved four plaintiffs, and concerned allegations of patent and industrial design infringement with respect to fluid containment apparatuses that were manufactured and distributed by the defendants (referred to collectively herein as “the Heide Defendants”) for use in oil field operations.  While many arguments with respect to patent infringement were raised at the Federal Court and FCA, this post will focus solely on the arguments with respect to the industrial designs. 

The Federal Court initially dismissed the action (see 2013 FC 616), and Zero Spill appealed all of the Federal Court’s findings.  In particular, the Federal Court held that the Heide Defendants had not infringed Canadian Industrial Design 86,793 (the ‘793 Design), by selling a line pipe tray known as a “CAPP tray”, which is designed to capture fluids that leak or are spilled during oil field operations. The Federal Court’s reasons revolved around paragraph 5.1(a) of the Industrial Design Act, which states that “[n]o protection afforded by this Act shall extend to features applied to a useful article that are dictated solely by a utilitarian function of the article”.

Although there were many similarities between the ‘793 Design and the CAPP tray, and despite the fact that the Heide Defendants had used Zero Spill’s product as a model for their own, the Federal Court found that Zero Spill had failed to prove infringement on a balance of probabilities.  In particular, the Federal Court noted that Zero Spill had not addressed the “legal distinction between design features that are visually appealing and those that are purely functional or utilitarian”.   The Federal Court’s reasons indicated that because many features of the ‘793 Design were in some way functional, these features were also unprotectable pursuant to paragraph 5.1(a) of the Industrial Design Act, notwithstanding that they might also appeal to the eye.  

Furthermore, the Federal Court found that Zero Spill had failed to lead evidence establishing that the CAPP tray had trenched on the visual features of the ‘793 Design. As the Federal Court held that the plaintiffs carried the burden of proving that the CAPP tray infringed the ‘793 Design, the Federal Court found that Zero Spill had failed to prove infringement on a balance of probabilities.

On appeal, Zero Spill argued that it had no burden under paragraph 5.1(a), and rather, the burden was on the Heide Defendants to show that the paragraph applied. Second, Zero Spill argued that paragraph 5.1(a) only excluded features that were dictated solely by their function, rather than all features which may have some coincident function.

In agreeing with Zero Spill’s arguments, the FCA stated that subsection 7(3) of the Industrial Design Act, creates a presumption of compliance with the entire Act.  Subsection 7(3) of the Industrial Design Act states that the certificate of registration for an industrial design is sufficient evidence, in the absence of proof to the contrary, “of the design, the originality of the design, of the name of the proprietor, of the person named as proprietor being proprietor, of the commencement and term of registration, and of compliance with [the Industrial Design Act]”.

In overturning the Federal Court, the FCA held that the effect of this subsection is to place the burden on the defendant in an infringement action to challenge the validity of the registration. One way to rebut the presumption would be to successfully invoke paragraph 5.1(a) of the Industrial Design Act.

As a result, the FCA held that the defendants were required to plead that certain features of the design were unprotectable because they were dictated solely by function. As the defendants had failed to do this, the Federal Court’s finding of non-infringement could not stand, and the issue of infringement was remitted back to the Federal Court for redetermination.

With respect to Zero Spill’s second submission, the FCA clarified the protection afforded under paragraph 5.1 (a) of the Industrial Design Act, and disagreed with the Federal Court’s finding that all functional features of an industrial design are unprotectable by virtue of paragraph 5.1(a), despite the fact that these features may also appeal to the eye.  In its reasons, the FCA found that this interpretation ran counter to the ordinary meaning of paragraph 5.1(a), and the purpose of the Industrial Design Act. As paragraph 5.1(a) states that “features … dictated solely by a utilitarian function” (emphasis added), are unprotectable, the FCA found that features could be both useful and visually appealing. In these circumstances, paragraph 5.1(a) could not apply.

Furthermore, the FCA noted that under subsection 64(2) of the Copyright Act, an article is exempt from copyright protection if there have been more than 50 copies made, and if the article is functional. In light of this, the FCA found that the Industrial Design Act would serve no purpose if it did not protect functional features. The FCA found that both the text of paragraph 5.1(a), and the underlying purpose of the Industrial Design Act confirmed that “functional features of designs may be protected under the Act. Only those features whose forms are dictated solely by function are not protected.” 

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.