Marketing Control Act
Comparison of Marketing Control Act and Design Act
Good design sells well and can also enhance a corresponding brand. But popular designs are often copied, hence the question of what means a designer must have to prevent or discourage the use of the same or similar designs or design elements by third parties. In Norway, the Design Act, the Copyright Act, the Trademark Act and the Marketing Control Act can form a relevant basis for a claim. This article will focus on the Design Law and the Marketing Control Law, and in particular the differences between the two sets of rules.
Marketing Control Act
According to § 30 Marketing Control Act it is:
prohibited in the course of trade from using copies of trademarks, products, catalogues, advertising materials or other manufactured items in such a way and under such circumstances that the use must be regarded as an unfair advantage of the efforts or results of another person and create a likelihood of confusion.
Protectable good according to § 30 Marketing Control Act are the “performance and results” of the designer. In contrast to the Design Act, protection under the Marketing Control Act thus arises through the use and recognition of the design in the market. In order to determine the “effort and result” and thus the scope of protection of the present design, an overall consideration of the following factors must be made:
- the manufacturer’s investments in product development;
- any advertising for the design;
- Annual sales; and
- market share.
The originality or distinctiveness of the design will also be a relevant factor. The greater the market share and the more original or flashy the design, the greater the scope of Section 30 Marketing Control Act protection.
The “unfair exploitation” requirement means that any similarities between the two arrangements are not, on their own, sufficient to establish infringement under Section 30 of the Marketing Control Act. Instead, a subjective assessment of the alleged infringer’s actions must be made, including an assessment of whether it is likely that the alleged infringer knew the earlier design and intentionally copied its features. Relevant factors for the disfavor of the alleged infringer can be, for example:
- previous business relationships between the two parties; or
- prior and systematic copying of the products of the designer or other third parties.
Therefore, in Section 30 Marketing Control Act cases, a picture is taken of the two parties involved and the assessed value of the allegedly infringed design. The key questions are:
- whether the first designer did enough to create a market position for their design; and
- whether the alleged infringer acted disloyally in creating the subsequent and allegedly infringing design.
In addition to the item evaluation mentioned above, a more objective comparison of the two designs is made, including whether the products will be confused in the ordinary course of trade. The use of different brands, packaging or image elements can, under certain circumstances, create a sufficient distance between two designs that appear similar at first glance – an infringement according to Section 30 Marketing Control Act is then not determined.
Cases related to product copying under Section 30 of the Marketing Control Act could be referred to the Norwegian Council (NKU), which deals with unfair marketing practices. The NKU offers written procedures for alleged violations of Section 30 Sales Control Act. NKU’s decisions are not legally binding, but most professional market participants abide by their decisions, regardless of whether they discover a violation. Proceedings before the NKU are usually cheaper than court proceedings and serve as an efficient tool in most cases.
The Norwegian Design Act does not provide protection for unregistered designs. Therefore, in order to enjoy protection under the Design Act, a design must be registered with the Norwegian Industrial Property Office. The protection criteria for registered designs are:
- “Novelty”; and
- “Personal Character”.
The novelty criterion relates to identical designs; protection is not granted if an identical design existed on the market at the time of filing or if the design in question was published by the designer more than 12 months before the filing date. Uniqueness is a more complex criterion, but it basically means that the overall look of the design must be different from other designs on the market. The distance that is needed for a different overall impression depends on the freedom of the designer – for example whether technical features limit his or her freedom. The design body also needs to be considered – namely how full the design field is and whether the consumer who is accustomed to similar shapes and features within the product group still gets a different overall impression. Then less distance is needed to create a different overall impression and vice versa.
The registration and thus the protection of a design can be obtained for a maximum of 25 years.
In infringement proceedings, it will be decisive whether the alleged design gives a similar overall impression to the registered design. An objective comparison of the two designs is made, in which the originality of the registered design compared to other designs available on the market is decisive for the infringement assessment.
The Design Law does not allow for subjective reviews or evaluations of the designer’s market position or investments in the market. Therefore, it is immaterial whether the copied product was a success, whether the designer or manufacturer received significant attention, or whether the design and product were advertised. It is also irrelevant whether the parties had previous business relationships or are fierce competitors or whether the alleged infringer acted disloyally. The sole decisive factor is whether the allegedly infringing design creates an overall impression similar to that of the registered design. Therefore, the assessment made is objective.
Comparison of Marketing Control Act and Design Act
The assessment of product copies is quite different according to the two legal acts.
The main difference is that under the Design Act there is an objective assessment of similarities, while under the Marketing Control Act there is also a subjective assessment of the parties’ investments and intentions.
The Design Act provides strong protection for designers who have created a unique or original design – in these cases, enforcement under the Design Act is less complicated than the more complex scrutiny required under the Marketing Control Act. For designers who cannot rely on significant advertising or market share, or in cases where it might prove difficult to prove subjective copying by the alleged infringer, protection under the Design Law can be a lifesaver.
In turn, the Marketing Control Act can be applied if the designer has not secured a design registration. It can also be the basis for a claim if the product has established itself through use and thus has a reinforced scope of protection due to its “look and feel”. In such cases, a competitor can be accused of not having chosen a design other than the market leader. However, it is important to emphasize that while Section 30 of the Marketing Control Act recognizes that protection can be obtained through use, the basic criterion for protection is still that the design exhibits some degree of originality or distinctiveness.
For more information on this subject, please contact Celine Varmann Jørgensen at Bryn Aarflot AS by phone (+47 92 83 16 19) or email ([email protected]). Bryn Aarflot AS’s website is available at www.baa.no.