Enforcement Case Study
Eruera15 is a jewellery designer who has recently become aware that his pounamu designs are being copied in China (in jade) and sold in tourist shops in new Zealand as pounamu. He wants to stop the reproduction of his designs, many of which are based on traditional art forms from within his whakapapa, and he also wants to stop any further sale of the infringing products.
What rights are available to Eruera?
Eruera's copyright and design rights have been infringed. As well as taking court action for infringement of his copyright and design right, Eruera may also possibly take action for "passing off ".
What can Eruera do to stop others from copying his designs?
He can consult a lawyer who is knowledgeable about IP. An IP lawyer will help Eruera work out if it is worth it for him to enforce his rights. Eruera's lawyer can also help him to develop an enforcement strategy.
The first step will usually involve sending the infringing party a "cease and desist" letter. The letter will tell them that they are infringing Eruera's IP rights and that they must stop infringing immediately. It would also be useful for Eruera to send a "cease and desist" letter to the owners of the tourist shops selling the infringing products.
If required, the second step usually involves mediation/arbitration or Court action.
What is a "cease and desist" letter?
A cease and desist letter tells the infringing party that they have infringed your IP right and that they must stop doing so immediately. An example of a cease and desist letter is set out below:
Dear [name]:
It has come to my attention that you have made an unauthorised use of my copyrighted work/registered design entitled [name of work] (the "Work") in the preparation of a work derived therefrom. I have reserved all rights in the Work, first published/ registered at the Intellectual Property Office of New Zealand in [date] [if registered design quote number here]. Your work entitled [name of infringing work] is essentially identical to the Work and clearly used the Work as its basis. [Give a few examples that illustrate direct copying.]
As you neither asked for nor received permission to use the Work as the basis for [name of infringing work] nor to make or distribute copies, including electronic copies, of same, I believe you have wilfully infringed my rights under section [quote relevant legislation, for example, section 16 of the Copyright Act 1994].
I demand that you immediately cease the use and distribution of all infringing works derived from the Work, and all copies, including electronic copies, of the same, that you deliver to me, if applicable, all unused, undistributed copies of same, or destroy such copies immediately and that you desist from this or any other infringement of my rights in the future. If I have not received an affirmative response from you by [date – give them about 2 weeks] indicating that you have fully complied with these requirements, I shall take further action against you.
Yours sincerely
Who enforces Eruera's rights?
Eruera IP rights are individual property rights, so it is the individual's responsibility to enforce them.
How much will it cost Eruera to enforce his rights through the Courts?
The cost of enforcement can be very high. Enforcement costs can include market surveillance, legal fees, court filing fees, travel to other countries to attend court hearings, time and effort.
For example, a fairly straightforward trade mark infringement court case might cost between $10,000 and $50,000.
A more complex patent infringement case (although not common in Aotearoa-New Zealand) requiring expert evidence might cost between $200,000 and $750,000.
While the Courts may order the infringer to pay your court costs, it is unlikely that such an order will get back all your enforcement costs. So it might be easier and a lot less costly for the both of you to settle out of court.
If Eruera chooses to go to Court, what is he likely to get out of it if he wins?
Different remedies are available depending on the type of IP right. For example, under the Copyright Act 1994 the infringing goods can be delivered to you or destroyed, an injunction can be placed on the production of further infringing goods, and/or the infringing party can be required to pay you the profits they made from the infringing goods.
How does Eruera enforce his rights overseas?
Each country deals with IP differently. It is therefore important to get an IP lawyer or patent attorney in the country where the infringing is taking place. In most countries, there are laws pertaining to groundless threats of infringement, so when writing to the infringer it is advisable to be polite, state the facts and clearly indicate your intentions. It will be important to weigh up the benefits of taking action for infringement against the likely costs. Your local IP lawyer or patent attorney may be able to advise you further on overseas enforcement.
Are there any other processes Eruera can use to enforce his rights?
Because court cases cost a lot, "alternative dispute resolution" is becoming more popular. There are two main types of alternative dispute resolution:
- Mediation is a structured negotiation with a mediator where the parties to the dispute identify options to resolve the dispute and assess them. A wider range of solutions can be considered in mediation than in the courts.
- Arbitration is more structured. An independent arbitrator is appointed who will make the final decision. You have only limited rights of appeal from an arbitration, which discourages some people from using it. However, like mediation, the advantages are that it is usually faster and cheaper than going to court, with the added advantage of confidentiality.
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