Bruhn Newtech Ltd v Datanetex Ltd & Anor (in the Patents County Court) concerns a dispute about the ownership of intellectual property in three versions of a device (“Hazkey”) which is said to be useful in predicting hazards. The case specifically relates to the ownership of UK unregistered design rights and Community unregistered design rights in the Hazkey versions.
The facts in Bruhn Newtech Ltd v Datanetex Ltd & Anor
There was no dispute that the Hazkey product was initially designed by the second Defendant, Mr Lashbrook (who was also the director of Datanetex Ltd). Bruhn Newtech Ltd (“the Claimant”), however, asserted that it commissioned Datanetex Ltd (“the Defendant”) in November 2009 to improve the existing Hazkey platform. However, although the Claimant did not accept the Defendant’s terms and conditions in November 2009 a Purchase Order was issued for the product in January 2010. The next year an updated version of the Hazkey product was produced and a contract agreed for the manufacture and production of version 3 of the product. However, a dispute arose in April 2011 as to the ownership of the intellectual property rights in the various versions of the Hazkey product.
The law relating to ownership of UK unregistered design rights and Community unregistered design rights
With UK unregistered design rights the general rule is that the “designer” is the owner of the design rights in the work that the designer has produced. This is the case even if the designer provides to a third party a description of the product so that a working copy can be produced. However, there are a number of exceptions to this rule, including when the design is produced in accordance with a commission, when the designer creates the design in the course of their employment, or the design has already been marketed in the UK.
The Patent County Court’s decision in Bruhn Newtech Ltd v Datanetex Ltd & Anor
The Patents County Court decided that the ownership of the intellectual property in the Hazkey versions resided with the Defendant. As above, the general position is that the design rights in a product vest in the “designer” (the Defendant). The Court considered that none of the exceptions applied – the product was not produced in pursuit of a commission, the design had not been produced in the course of employment, and the design had not already been marketed in the UK. Bruhn had two fallback positions, the first being that the intellectual property rights invested in the Claimant by virtue of equity and the second being that there were implied contractual terms that would vest ownership of the design rights with Bruhn. The Judge therefore considered that ownership of the design right in the Hazkey product resided with Datanetex. However, the Judge did find that Datanetex should deliver up goods that the Claimant owned.
Our specialist intellectual property lawyers’ thoughts on Bruhn Newtech Ltd v Datanetex Ltd & Anor
This case highlights how quickly the design and manufacture of a product for commercial marketing can degenerate into a legal dispute. Ownership relating to the intellectual property rights in UK unregistered design rights and Community unregistered design rights is relatively simple but can rapidly become obscured by various legal arguments – the best way to avoid such disputes is to register the design of the product.