Is it time for designers and fashion houses to turn to the criminal law to combat flagrant copying?
The Intellectual Property Office’s research into design infringement, published in November 2018, found that over 98% of a spectrum of designers from all sectors reported infringement, and concluded that between 5% and 16% of those design infringements would amount to criminal offences under the Registered Designs Act 1949 were the designs in question registered. Given high value or high turnover items are more likely to be exploited, these offences are likely to be costly. To compound matters, conduct of this type can be disastrous and soul-destroying for small and up-and-coming designers. The fashion industry is a prime target.
The 1949 Act was refashioned in 2014 to create a criminal offence of unauthorised copying in the course of business, which is committed when an individual or a company copies a product exactly or with immaterial differences, without the consent of the registered owner, knowing or having reason to believe it is a registered design.
That offence sits alongside other offences targeted at wholesalers and retailers, together with enhanced enforcement powers. Yet, whilst copyright and trade mark infringement prosecutions have a well-established track record, and designs in various sectors and industries have been protected through prosecution in other countries (such as Germany and Denmark), several seasons in, prosecutions for the design offence in the UK appear to be non-existent.
There is plenty of anecdotal evidence of fashion copycats, but it is possible that the offence has so far largely found itself left on the rail because designers have not registered their designs. The reasons for that may be varied, and may include the cost of registering entire collections on an annual basis, or a positive assessment that unregistered design rights might be more valuable in a particular instance.
That position, howsoever arrived at, will no doubt disappoint those who championed the change in the law, because one of the justifications for introducing the criminal provision, as set out in the government’s Revised Impact Assessment, was that the introduction of the offences would increase confidence and make registration a more attractive proposition to businesses.
If this situation persists and the registered design right offence remains a largely decorative item, are there other criminal offences which might nevertheless offer protection to all designers, whether or not they choose to register? Whilst the government resisted calls for a bespoke offence encompassing all designs, the wider pool of commercial crime provisions, for example the fraudulent trading offences, may provide remedies for owners of unregistered designs.
Yet, more fundamentally, perhaps there is still a tendency on the part of victims not to perceive commercial copying as the crime that it is.
Indeed, simply recognising and calling out infringements as crimes creates deterrence opportunities without necessarily having also to resort to prosecution. Labelling behaviour as criminal and bringing it to the attention of an infringer’s service providers and funders - for example its online market places, payment providers and advertisers – is an approach seen in Operation Creative , which is the partnership between the Police Intellectual Property Crime Unit and the entertainment and advertising representative bodies. The effect is to disrupt infringing activity by causing those who enable infringers to make profits to consider whether they are themselves assisting or encouraging crime, as well as feeding into website blocking.
For more serious cases where prosecution is proportionate and necessary, for example when dealing with repeat offenders or where a broader deterrent effect is required, maximum sentences in this area are up to ten years’ imprisonment and/or an unlimited fine. Whilst sentences of that length would inevitably be reserved for the more extreme cases, a more consistent and predictable sentencing regime has recognised the harm caused by this category of commercial crime and metes out appropriate punishments.
Allied to that is the potential individual liability of directors and managers; ancillary orders such as director disqualification; and, in addition to the forfeiture of offending goods, Confiscation Orders may remove not just profits but entire turnover, as well as providing an effective mechanism for the delivery of compensation.
In the UK, private prosecutions, long used by the film and music industries, are seeing a resurgence as a route to obtaining justice on an individual basis whilst simultaneously having a wider deterrent effect. Recognising this, a group of practitioners established the Private Prosecutors’ Association with the object of encouraging the proper and fair use of private prosecutions; to that end, a proposed code of conduct is currently under consultation.
At a time when the criminal justice system is showing signs of strain, private prosecutions challenge the now-outmoded perception that criminal prosecutions are lengthy and cumbersome. By contrast, when conducted properly in a focused and proportionate way, it is possible to steer a carefully chosen private prosecution through the criminal courts in an efficient and effective manner.