The perils of copyright reliance for industrial designs

The High Court accepted that copyright subsisted in Technopak’s designs and acknowledged that there were visual similarities between the two design offerings.

But it held that there was: 

1. insufficient objective similarity, as the differences between the designs were quantitatively and qualitatively significant when assessed from the perspective of an engineer faced with the relevant functional constraints;⁶
2. no causal connection, as the evidence showed that the defendants had followed an independent design path;⁷ and
3. no reproduction of a substantial part of Technopak’s designs, as there were:
   • limited similarities between the Designs after disregarding those dictated by functional constraints, and
   • numerous differences.⁸

Hence, copyright had not been infringed:

[250] There is some merit in the defendants’ submission that Technopak has selected a small number of drawings from thousands in an attempt to establish copying. I am satisfied that the defendants followed an independent design path to arrive at the Monzeal designs and that any similarities between the designs arise because of functional constraints…

[252] I find that the defendants have not infringed Technopak’s copyright. Technopak is not therefore entitled to any relief.

Chapman Tripp comment
The High Court’s judgment makes a careful distinction between:

1. the idea, concept, and function underpinning the various components of the bag-filler machines, and
2. the particular expression of the idea embodied in the designs.

Only the latter is subject to copyright (or registered design rights). The former is the domain of patent rights.

The High Court avoided the mistake of conflating originality and novelty, made by the same Court in Sealegs v Zhang⁹ and criticized by the Court of Appeal:¹⁰

[106] The Judge did not approach the issue of originality by making an assessment of the extent of the skill and labour which had been expended in the creation of the identified copyright work, namely the sequence of the collocation of known components. Rather, apparently treating novelty and originality as synonymous, he seized on the description of the Sealegs design as “unique”…

[124] In our view the Judge erroneously approached the issue of originality in the collocation of common features by reference to the criteria for patentability, coupled with his assessment of the commercial success of [the] invention.

The judgment is the latest in a series of decisions highlighting the limitations of copyright for protecting industrial machinery - particularly in restraining competition from former employees and consultants.

It also illustrates a potential lack of awareness of other forms of intellectual property (IP) protection which are often more suitable. Had Technopak protected their innovations by way of patents and/or registered designs, the outcome may have been different. They would not have been required to prove the existence or ownership of their exclusive rights, or a causal connection (i.e., copying).

And a patent, unlike copyright or design registration, can give broader rights to the concept behind the innovative machinery.

Reliance on copyright to protect innovations may also forgo valuable rights outside New Zealand. In Australia, for example, there is no infringement of copyright in a design after the design has been applied industrially.¹¹

The Ministry of Business, Innovation and Employment (MBIE) has embarked on a review of the Copyright Act but progress seems to have stalled.¹² It is time to restart the engine and to harmonise our copyright regime with those of New Zealand’s major trading partners.

1. Technopak Ltd v Monzeal Ltd [2024] NZHC 1420 (31 May 2024).
2. Wham-O Manufacturing Co v Lincoln Industries Ltd [1984] 1 NZLR 641 (CA) at 666.
3. At [52], citing Oraka Technologies v Geostel Vision Ltd [2013] NZCA 111, at [130]-[132].
4. At [98], citing Zhang v Sealegs International Ltd [2019] NZCA 389, at [164].
5. At [98] and [109], citing UPL Group Ltd v Dux Engineers Ltd [1989] 3 NZLR 135 (CA), at 145.
6. At [112], [149], [173], [194], [207], [226], and [238].
7. [115], [154], [174], [195], [209], and [227].
8. At [118], [155], [210], and [228].
9. Sealegs International Ltd v Zhang [2018] NZHC 1724
10. Zhang v Sealegs, above n 3.
11. Copyright Act 1968 (Cth), s 77.
12. Ministry of Business, Innovation & Employment.  Issues Paper: Review of the Copyright Act 1994. November 2018.