Lift Report

The simplest and cheapest way around this is to help yourself to the other people’s hard-won stash of ideas and developments. Side-stepping the development phase naturally sheds a totally different light on the calculation. Dipping into someone else’s pot of ideas means there is no need to cost the product development outlay, the costs of the market launch and the costs of advertising into the sales price. The consequences are obvious: The copy can be offered far more cheaply than the original, and the number of customers who will go for the cheaper option is quite considerable, cutting down on any profit which can be derived from the original product.

As it is only “worth producing” a copy of something which has already proven successful, the damage caused by plagiarism is naturally increased, resulting in increasing frustration among developers. Those who spend energy and financial resourcesto create new products are punished for doing so – or at least that is how it seems.

It is precisely here that the statutory regulations protecting industrial property rights come into play. The inventor should be rewarded for his idea and given the opportunityto commercially market his creation without third parties illegally benefitingfrom his intellectual achievement.

This laudible sentiment expressed back in the 19th century appears to us today to describe a moral utopia which is far removed from reality. The international opening up of markets has resulted in increased product piracy.

In a survey entitled “Product and brand piracy in the investment goods industry 2008” performed by the VMDA2), 68 % of the companies asked claimed to have been affected by product and/or brand piracy. Leading the field among countries which produce pirated copies according to the survey was China with 71 %, with Germany coming in at 19 %.

This highlights the fact that the risk of plagiarism threatens not only the more remote markets, but is prevalent here on our own front doorstep. The strategy used to protect intellectual property should consequently feature as an integral part of development phase of any new product.

The following article provides an explanation and an illustration of what constitute fundamental industrial property rights. Not every industrial property right is suitable for use with every market strategy. Under the bottom line, the degree of protection is always a question of how much the developer is willing to invest in protection.

What almost all industrial property rights have in common is the fact that their protection encompasses only a certain geographical area. This is known as the territorial principle. The German patent only protects the product within the borders of the Federal Republic of Germany, the European trademark only within the European Union. This should be a starting point for consideration. Although it is generally possible to subsequently obtain protection in other economic areas, thereis certainly no harm in considering the envisaged future markets right from an early phase.

There are also two major categories of property rights: Registered and non-registered. Registered industrial property rights have been fi led with an authority, generally speaking the patent offi ce. They have to be registered here and regularly extended. Non-registered industrial property rights exist per se, without the necessity to be registered.

The best known of all industrial property rights is the patent, which continues to enjoy great popularity as a means of protecting industrial property. In 2008, a total of 59,819 European patents were granted by the European Patent Office in Munich. Heading  the race were German applicants with 13,498 patents, followed by US American applicants with 12,733 and Japanese applicants with 10,917 patents.

The patent is a purely technical property right, in other words the patent protects the invention of a technical product or process. It is here that the fi rst condition for granting of a patent lies: The subject of the patent must be an invention. An invention as defined by patent law is an instruction for practical action whose claimed object or claimed process is of a technical nature, capable of implementation and repetition, and is the solution to a task conceived through technical consideration.

However, this condition may be considered the stumbling block of the patent. The process entailed in the granting of a patent prescribes obligatory examination of the patent in respect of its inventive level. What about products which are not an invention? Is it not possible to protect them?

The answer in this case is yes, protection is possible but not by patent. In such cases, thought must be given to which other type of property right can be applied.

The patent affords protection only for a maximum period of twenty years. After being granted, it must then be extended yearly after the end of the fourth patent year. Additional fees are payable for this. This process makes the patent one of the most cost-intensive of all the property rights.

After application, the official patent examination must be applied for within a limit of seven years. In this step, the relevant points of the innovation and the inventive level are examined by employees of the patent office in order to determine whether a patent can be granted.

The patent application itself determines the time of priority. Even if no examination has been applied for, this is the date which is decisive when it comes to determining the state of the art and the issue of priority over other patents. The application is kept secret for 18 months and then disclosed, or published. This allows the general public to be informed about the state of the art. The 1 1/2 year secrecy period is designed to give the inventor the opportunity to pursue the application or to retract the patent application before it is published.

Another instrument used alongside the patent is the utility model, often called a “mini patent”. The utility model can also protect a technical invention which is new, is based on an inventive step and is commercially utilizable.

In contrast to the patent procedure, the utility model department of the patent offi ce only checks during the registration process whether the object in question is a technical invention which may not fall within the scope of eligibility for utility model protection (such as a process for example).

However, in contrast to the patent, no examination of the conditions of novelty, inventive achievement or industrial application takes place. An examination only takes place subsequently in the event of a cancellation or infringement procedure. Although this is a fast and cost-effective way of protecting an invention, there is a high risk that it will be attacked and cancelled. Utility model protection initially exists for 3 years and can be extended to a maximum of 10 years. This is another difference from the patent, which can run for up to 20 years.

As the name suggests, trade mark or brand legislation (and consequently industrial design legislation) are available instruments for the protection of marks and designs. In this case, it is not technical aspects which are at issue but the design components of a product.

All characteristics perceptible by the senses are eligible for trade mark protection by law. While during the days of the “Warenzeichengesetz”, the Trade Mark Act formally applicable in Germany, this was limited primarily to word marks, figurative marks and combined word and figurative marks, nowadays the equivalent legislation accepts a far broader interpretation to include other types of mark. Of particular interest for technical products is the three-dimensional mark, as shown by the examples below:

In the same way as for patents, marks are also protected according to the territorial principle. Only where mark protection is applied for and registered is it valid. Consequently, any brand or trade mark strategy deliberations should consider the markets in which protection should be sought. Alongside national marks, European and also international marks can also be protected. The latter are characterized by the fact that the holder must already hold a registered national or European mark, and that the protected territory can be extended subsequently to include other countries.

Unlike a patent, a trade mark can be extended any optional number of times. Registration takes place for ten years and can then be extended as often as required by a further ten-year period.

The area for which the trade mark is protected must be defined on registration. For this, the trademark offices use a system of 45 goods and service categories. There is no limit to the number of registered categories, and up to three are included in the price of the registration fee. What is important to remember here is that it is not possible to add further classes retroactively except by fi ling a new registration.

Alongside the three-dimensional mark described above, the significance of the word, figurative or word/figurative mark for product identification should not be underestimated. A catchy product name can often be the key to successful market penetration. In everyday conversation, hardly anyone nowadays uses the word “ball point pen” or “adhesive tape”. However, when developing a product name, it is important to keep sight of the envisaged markets, as the following examples illustrate.

The marketing success of the Irish whisky brand “Irish Mist” was compromised in German-speaking countries by the fact that “mist” in German means “dung”. For decency’s sake, it is not possible to explain in further detail here why the “Nissan Pajero ” failed to sell well in Spanishspeaking countries. One of the side effects of the European Single Market is that greater attention has to be paid to the naming of brands.

The trade mark and the design stand in a similar relationship to each other as the patent and the utility model. The German term “Geschmacksmuster” literally means “taste sample“, a term which is somewhat misleading, as the registration of a design does require the object to comply with any aesthetic requirements. The English term “industrial design“ is consequently a far more fitting description oft this type of property right.

The industrial design protects the design characteristics of three-dimensional objects and two-dimensional designs. In a similar way to the trade mark, a registered industrial design confers the sole right to use a design and prohibits others from using the design without the agreement of the holder.

The design must be new at the time of registration and must demonstrate peculiarity. However, on registration in the Industrial Design Register, the Patent and Trademark Office does not examine these conditions. These aspects are decided only in the event of a dispute by the civil courts. As is the case with the utility model, a purely formal examination takes place.

Industrial design protection is created on entry of the design in the Industrial Design Register. It can be maintained for up to 25 years after the date of registration. In the same way as a trade mark, an industrial design can be protected on a national, European or international level. The costs of registration and extension of the registered industrial design are far lower than for a trade mark.

Under European industrial design law, alongside the registered community industrial design which, like the community trade mark, has to be registered with the Office for Harmonization in the Internal Market in Alicante, according to the Community Design Ordinance, another special category exists, that of the unregistered community design, which also receives protection. Provided it fulfils the requirements imposed on an industrial design, simply through its disclosure to the public (for example at a trade fair), the unregistered community design is afforded protection against plagiarism. The condition for unregistered design protection is that the design must have peculiarity and must be new at the time of disclosure.

This “free” form of property right does, however, have disadvantages as against the registered design. The burden of proof lies fully with the holder that he owns the design and that it that the design is eligible for protection by virtue of its novelty and peculiarity. In addition. The protection afforded by an unregistered community design is only three years without any possibility of extension. Because the burden of proof lies with the holder, the disclosure of a product eligible for design protection, such as a photograph of the entire trade fair stand, should be well documented.

Copyright is one of the unregistered property rights. It is created by the completion of a work and ends seventy years after the heath of the author.

Copyright as is nontransferrable. It is a subjective right, in other words the actual author remains the author until after their death, and can neither lose nor voluntarily renounce this legal position. However, as is evidenced by the fact that the term of the protection survives the death of the author, some components of the copyright can be transferred to third parties. These are the rights of utilization, duplication and publication. Protection of copyright requires the creation of a“work” which must have a certain “creative merit”. While originally only artistic works such as music or literature formed  the focus of this legislation, the scope of copyright has evolved further over time.

As this article is looking at industrial property  rights from the point of view of the lift industry, here it is primarily the copyright protection of computer programs which is of interest.

No “software patent” exists according to German and European patent law. However, the protection of computer programs is explicitly defined by articles 69a ff of the German Copyright Act (UrhG). The definition of the computer program is a very broad one, referring in the main to programs in every form, in other words also those which are part of the hardware. According to Art. 69a UrhG, programs are protected where they constitute individual works in as far as they are the output of the author’s own intellectual creation. Art. 69b UrhG also contains an express legal assumption that economic rights – for example the distribution or licensing of the program – lie with the employer, should the program have been created by an employee during the execution of the task for which he or she is paid. Consequently a program is afforded protection on its completion which entitles the copyright owner to prohibit its duplication or other unauthorized use by third parties.

As is the case with every unregistered property right, however, with computer programs the problem arises that while one party may be the owner of the copyright, in case of a dispute this party may be called upon to provide evidence of authorship . This problem can be circumvented for example by submitting a printout of the source code in a sealed envelope to a notary or lawyer for safekeeping.

Finally on the European and German level we come to the Institute of Competition Law. The German Law on Unfair Competition or UWG for short has served as a legal source for several European directives. It has been and is still continues to be modified by the relevant directives. This is not a classical property right, as it does not protect individual products, but instead is a law intended to protect the integrity of competition as such. The rights of forbearance and compensation for damages arising from this law are only applicable to competing companies and similarly placed associations. In addition, the law is not intended to restrict competition. Competition is in fact expressly encouraged in the free market economy. Instead it is only intended as an instrument to counter illegal methods of competing. According to the basic precept of the UWG, anyone guilty of dishonest competitive practices intended to tangibly impair the interests of fellow competitors, consumers or other market participants is acting illegally. However, as this field is extremely broad, it entails wide scope for interpretation and legal construction. Consequently, article 4 of the UWG lists examples of unfair practice. Within the scope of this article, of relevance here is number 9 in the list included under Art. 4 UWG, the “misappropriation of another’s work”.

It is regarded to be unfair to […]

9. Offer goods or services that are imitations or replicas of a competitor’s goods or services

a) where this might mislead customers and cause confusion in the market place as to the commercial origin of those goods or services,

b) in cases of the original manufacturer’s reputation being unfairly exploited or impaired or

c) where the necessary knowledge or required documents for the production of the imitation or replica have been obtained by dishonest means

As outlined previously, this is intended to provide protection against plagiarism. The standard impacts where there is either no property right in place or whereexisting property rights are open to interpretation. The latter includes cases in which for instance a trade mark exists, but where certain points of the imitation vary so widely from the trade mark that the scope of the Trade Mark Act do not apply, although the plagiarism is aimed at selective exploitation of the reputation of another.

In a similar way to unregistered property rights, the burden of proof is higher in the case of competition law. Wherever possible, it is preferable to opt for registered property rights.