Furniture Suppliers Beware! Protecting your designs in Contracts
Beware of hidden traps in trading terms and conditions
There is a major industry issue faced by many furniture suppliers. Some larger furniture retailers have snuck some clauses into their trading terms which are disadvantageous to suppliers, particularly when it comes to protecting your designs from being copied.
One of these clauses purports to give permission to the retailer to enter into negotiations or agreements with any other entity for the purchase of furniture similar or identical to the supplier’s furniture. This effectively means that by accepting the terms of trade, furniture suppliers would be agreeing to supply furniture to the retailer which could then be copied by the retailer without any liability. In other words, you sign over permission to the retailer to sell an identical furniture design to your own.
We imagine it could be heartbreaking if you were to enter into an agreement with a retailer to supply furniture only to find they copied your range through a cheaper manufacturer.
We recommend that you read the trading terms and conditions that you enter into very carefully because the last thing you want to do is agree to a position where your furniture designs can be copied and sold without your permission. Furniture manufacturers often believe that when they create new designs and release them into the public domain, Australian law prevents anyone from copying them.
In many cases, this is not the how the law works.
Unless you have registered your design when you mass produce furniture you generally won’t be protected under copyright law in Australia. Copyright is automatically lost when you mass produce furniture because the law does not provide two forms of protection at the same time. Registering your furniture designs is the best way to make sure you are protecting your designs. This means that you get exclusive rights to sell your design or licence others to do so.
For example, if you manufacture a unique chair design and have registered that design in Australia, a furniture retailer can only sell the chair if they get your permission, usually in the form of a licence.
How do you know if you can register your furniture design?
The Designs Act 2003 (Cth) is the relevant piece of law for registering and protecting your designs. It says that in order to register a design, including furniture, the design must be novel and distinctive.
This means that a design must not be identical to any design previously disclosed in the world.
It must also substantially differ from other designs published in Australia and the world. This means that the design must be kept secret before you apply for protection, this includes not showing a product in private shows or on the internet, including on social media.
In Australia, if you do not have a design registration and the furniture has been mass-produced, the equivalent of 50 or more have been made, then anyone can copy it. An exception is where the furniture is a work of artistic craftsmanship. Importantly, this is the exception, not the rule.
Benefits of having your design registered and certified
Once you have registered your furniture design, you are granted a number of exclusive and enforceable rights, including:
- The right to use the design and mark products that embody the design;
- The right to sell, license and import the design; and
- The right to authorize any person to do the above acts.
Effectively no one else can copy your furniture design without your authorisation, giving you a competitive edge in the marketplace.
What can AFA Partner, Sharon Givoni Consulting, do to help you and your business?
Sharon Givoni Consulting can advise you on the trading terms and conditions you have agreed to and what they mean.
We also can help you assess whether your furniture designs will be protected by copyright as a work of artistic craftsmanship, or whether you should secure design registration.
If your products need to be registered as a design, Sharon Givoni Consulting can assist you in filing the application with IP Australia and securing your certified registered design. Please note that your furniture design applications must be filed before you show your designs in public, so it is important to get advice early.
Certifying your design
If someone copies your design, you may also need to get your design certified to take legal action.
One of the requirements to obtain a successful certified design registration is that your product can be shown to be “new and distinctive”.
Upon request, IP Australia will examine the registered design to examine whether it satisfies the requirement of being new and distinctive when compared to others in the marketplace.
Further, as stated above, you must apply to register your design before you release your product to the marketplace (including by way of showing online or at a trade show).
Therefore, it is essential when protecting your designs that you keep your furniture designs confidential before you have obtained your design registration.
Trade marking your brand
If you do not register your designs, then it can be challenging to protect yourself as an Australian designer.
If you trade mark your brand and the name of the design the retailer can be prevented from advertising the replica product made.
Case Study: Herman Miller v Matt Blatt
In 2011, Herman Miller, Inc. took legal action against Australian furniture supplier Matt Blatt.
Herman Miller, who owns the rights over genuine Eames furniture, argued that Matt Blatt was engaging in misleading conduct and also infringing its Eames trade mark by producing replicas of the furniture and selling it at a cheaper price.
While the precise terms of the settlement remain confidential, Matt Blatt was able to continue to sell the replica pieces, but its website was corrected to state that its replica products are not affiliated with, authorised by or manufactured by the owner of the genuine article.
Had Charles and Ray Eames registered their chair design in Australia, the situation would have been different. In that event, Matt Blatt would have needed a licence from the design owner to reproduce the chair design in question.
Tips for protecting your designs
It is always prudent to carefully read the trading terms supplied to you by retailers to avoid situations whereas a supplier, your designs could be taken and used by other companies.
Without adequate protection for furniture designs in the form of design registration, there remains the prospect of competitors or retailers free-riding on your design.
If you have not already, you should trade mark your brand and register your furniture designs to offer yourself the highest level of protection by the law available. Sharon Givoni Consulting can assist you with this process.
You can find a detailed analysis of this topic in Sharon Givoni’s book, Owning It: A Creative’s Guide to Copyright, Contracts and the Law: http://www.sharongivoni.com.au/books/owning-it.html
Designs registration protects the overall shape, conjuration, pattern, and ornamentation of your furniture.
Using lawyers is preferable as the devil is in the detail. Sharon Givoni Consulting can assist you protecting your designs (www.sharongivoni.com.au) (phone 03 95271 334).
Disclaimer: This article is of a general nature and not to be replaced with tailored legal advice.
About Sharon Givoni
Sharon Givoni Consulting is a partner of the AFA and provides advice in relation to furniture design registration and protecting your designs generally as well as a review of trading terms. Contact: firstname.lastname@example.org or call us on +613 9527 1334