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105th Congress Report
2nd Session HOUSE OF REPRESENTATIVES 105-436
_______________________________________________________________________
VESSEL HULL DESIGN PROTECTION ACT
_______
March 11, 1998.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed
_______
Mr. Coble, from the Committee on the Judiciary, submitted the following
R E P O R T
[To accompany H.R. 2696]
[Including cost estimate of the Congressional Budget Office]
The Committee on the Judiciary, to whom was referred the
bill (H.R. 2696) to amend title 17, United States Code, to
provide for protection of certain original designs, having
considered the same, reports favorably thereon with an
amendment and recommends that the bill as amended do pass.
TABLE OF CONTENTS
Page
The Amendment.............................................. 1
Purpose and Summary........................................ 10
Background and Need for Legislation........................ 10
Hearings................................................... 13
Committee Consideration.................................... 13
Committee Oversight Findings............................... 14
Committee on Government Reform and Oversight Findings...... 14
New Budget Authority and Tax Expenditures.................. 14
Congressional Budget Office Estimate....................... 14
Constitutional Authority Statement......................... 15
Section-by-Section Analysis and Discussion................. 15
Changes in Exesting Law Made by the Bill, as Reported...... 20
The amendment is as follows:
Strike out all after the enacting clause and insert in lieu
thereof the following:
SECTION 1. SHORT TITLE.
This Act may be referred to as the ``Vessel Hull Design Protection
Act''.
SEC. 2. PROTECTION OF CERTAIN ORIGINAL DESIGNS.
Title 17, United States Code, is amended by adding at the end the
following new chapter:
``CHAPTER 12--PROTECTION OF ORIGINAL DESIGNS
``Sec.
``1201. Designs protected.
``1202. Designs not subject to protection.
``1203. Revisions, adaptations, and rearrangements.
``1204. Commencement of protection.
``1205. Term of protection.
``1206. Design notice.
``1207. Effect of omission of notice.
``1208. Exclusive rights.
``1209. Infringement.
``1210. Application for registration.
``1211. Benefit of earlier filing date in foreign country.
``1212. Oaths and acknowledgments.
``1213. Examination of application and issue or refusal of
registration.
``1214. Certification of registration.
``1215. Publication of announcements and indexes.
``1216. Fees.
``1217. Regulations.
``1218. Copies of records.
``1219. Correction of errors in certificates.
``1220. Ownership and transfer.
``1221. Remedy for infringement.
``1222. Injunctions.
``1223. Recovery for infringement.
``1224. Power of court over registration.
``1225. Liability for action on registration fraudulently obtained.
``1226. Penalty for false marking.
``1227. Penalty for false representation.
``1228. Enforcement by Treasury and Postal Service .
``1229. Relation to design patent and copyright law.
``1230. Common law and other rights unaffected.
``1231. Administrator.
``1232. No retroactive effect.
``Sec. 1201. Designs protected
``(a) Designs Protected.--
``(1) In general.--The designer or other owner of an
original design of a useful article which makes the article
attractive or distinctive in appearance to the purchasing or
using public may secure the protection provided by this chapter
upon complying with and subject to this chapter.
``(2) Vessel hulls or component parts thereof.--The design
of a vessel hull or component part of a vessel hull, including
a plug or mold, is subject to protection under this chapter,
notwithstanding section 1202(4).
``(b) Definitions.--For the purpose of this chapter, the following
terms have the following meanings:
``(1) A design is `original' if it is the result of the
designer's creative endeavor that provides a distinguishable
variation over prior work pertaining to similar articles which
is more than merely trivial and has not been copied from
another source.
``(2) A `useful article' is a vessel hull or a component
part thereof, including a plug or mold, which in normal use has
an intrinsic utilitarian function that is not merely to portray
the appearance of the article or to convey information. An
article which normally is part of a useful article shall be
deemed to be a useful article.
``(3) A `vessel' is a craft, especially one larger than a
rowboat, designed to navigate on water.
``(4) A `hull' is the frame or body of a vessel, exclusive
of masts, sails, yards, and rigging.
``(5) A `plug' means a device or model used to make a mold
for the purpose of exact duplication, regardless of whether the
device or model has an intrinsic utilitarian function that is
not only to portray the appearance of the product or to convey
information.
``(6) A `mold' means a matrix or form in which a substance
for material is used, regardless of whether the matrix or form
has an intrinsic utilitarian function that is not only to
portray the appearance of the product or to convey information.
``Sec. 1202. Designs not subject to protection
``Protection under this chapter shall not be available for a design
that is--
``(1) not original;
``(2) staple or commonplace, such as a standard geometric
figure, familiar symbol, emblem, or motif, or other shape,
pattern, or configuration which has become standard, common,
prevalent, or ordinary;
``(3) different from a design excluded by paragraph (2)
only in insignificant details or in elements which are variants
commonly used in the relevant trades;
``(4) dictated solely by a utilitarian function of the
article that embodies it; or
``(5) embodied in a useful article that was made public by
the designer or owner in the United States or a foreign country
more than 1 year before the date of the application for
registration under this chapter.
``Sec. 1203. Revisions, adaptations, and rearrangements
``Protection for a design under this chapter shall be available
notwithstanding the employment in the design of subject matter excluded
from protection under section 1202 if the design is a substantial
revision, adaptation, or rearrangement of such subject matter. Such
protection shall be independent of any subsisting protection in subject
matter employed in the design, and shall not be construed as securing
any right to subject matter excluded from protection under this chapter
or as extending any subsisting protection under this chapter.
``Sec. 1204. Commencement of protection
``The protection provided for a design under this chapter shall
commence upon the earlier of the date of publication of the
registration under section 1213(a) or the date the design is first made
public as defined by section 1210(b).
``Sec. 1205. Term of protection
``(a) In General.--Subject to subsection (b), the protection
provided under this chapter for a design shall continue for a term of
10 years from the date of the commencement of protection under section
1204.
``(b) Expiration.--All terms of protection provided in this section
shall run to the end of the calendar year in which they would otherwise
expire.
``(c) Termination of Rights.--Upon expiration or termination of
protection in a particular design under this chapter, all rights under
this chapter in the design shall terminate, regardless of the number of
different articles in which the design may have been used during the
term of its protection.
``Sec. 1206. Design notice
``(a) Contents of Design Notice.--(1) Whenever any design for which
protection is sought under this chapter is made public under section
1210(b), the owner of the design shall, subject to the provisions of
section 1207, mark it or have it marked legibly with a design notice
consisting of--
``(A) the words `Protected Design', the abbreviation
`Prot'd Des.', or the letter `D' with a circle, or the symbol
*D*;
``(B) the year of the date on which protection for the
design commenced; and
``(C) the name of the owner, an abbreviation by which the
name can be recognized, or a generally accepted alternative
designation of the owner.
Any distinctive identification of the owner may be used for purposes of
subparagraph (C) if it has been approved and recorded by the
Administrator before the design marked with such identification is
registered.
``(2) After registration, the registration number may be used
instead of the elements specified in subparagraphs (B) and (C) of
paragraph (1).
``(b) Location of Notice.--The design notice shall be so located
and applied as to give reasonable notice of design protection while the
vessel hull embodying the design is passing through its normal channels
of commerce.
``(c) Subsequent Removal of Notice.--When the owner of a design has
complied with the provisions of this section, protection under this
chapter shall not be affected by the removal, destruction, or
obliteration by others of the design notice on an article.
``Sec. 1207. Effect of omission of notice
``(a) Actions With Notice.--Except as provided in subsection (b),
the omission of the notice prescribed in section 1206 shall not cause
loss of the protection under this chapter or prevent recovery for
infringement under this chapter against any person who, after receiving
written notice of the design protection, begins an undertaking leading
to infringement under this chapter.
``(b) Actions Without Notice.--The omission of the notice
prescribed in section 1406 shall prevent any recovery under section
1223 against a person who began an undertaking leading to infringement
under this chapter before receiving written notice of the design
protection. No injunction shall be issued under this chapter with
respect to such undertaking unless the owner of the design reimburses
that person for any reasonable expenditure or contractual obligation in
connection with such undertaking that was incurred before receiving
written notice of the design protection, as the court in its discretion
directs. The burden of providing written notice of design protection
shall be on the owner of the design.
``Sec. 1208. Exclusive rights
``The owner of a design protected under this chapter has the
exclusive right to--
``(1) make, have made, or import, for sale or for use in
trade, any vessel hull embodying that design; and
``(2) sell or distribute for sale or for use in trade any
vessel hull embodying that design.
``Sec. 1209. Infringement
``(a) Acts of Infringement.--Except as provided in subjection (b),
it shall be infringement of the exclusive rights in a design protected
under this chapter for any person, without the consent of the owner of
the design, within the United States and during the term of such
protection, to--
``(1) make, have made, or import, for sale or for use in
trade, any infringing article as defined in subsection (e); or
``(2) sell or distribute for sale or for use in trade any
such infringing article.
``(b) Acts of Sellers and Distributors.--A seller or distributor of
an infringing article who did not make or import the vessel hull shall
be deemed to have infringed on a design protected under this chapter
only if that person--
``(1) induced or acted in collusion with a manufacturer to
make, or an importer to import such article, except that merely
purchasing or giving an order to purchase a vessel hull in the
ordinary course of business shall not of itself constitute such
inducement or collusion; or
``(2) refused or failed, upon the request of the owner of
the design, to make a prompt and full disclosure of that
person's source of such vessel hull, and that person orders or
reorders such article after having receiving notice by
registered or certified mail of the protection subsisting in
the design.
``(c) Acts Without Knowledge.--It shall not be infringement under
this section to make, have made, import, sell, or distribute, any
vessel hull embodying a design which was created without knowledge that
a design was protected under this chapter and was copied from such
protected design.
``(d) Acts in Ordinary Course of Business.--A person who
incorporates into that person's product of manufacture an infringing
article acquired from others in the ordinary course of business, or
who, without knowledge of the protected design embodied in an
infringing article, makes or processes the infringing article for the
account of another person in the ordinary course of business, shall not
be deemed to have infringed the rights in that design under this
chapter except under a condition contained in paragraph (1) or (2) of
subsection (b). Accepting an order or reorder from the source of the
infringing article shall be deemed ordering or reordering within the
meaning of subsection (b)(2).
``(e) Infringing Article Defined.--As used in this section, an
`infringing article' is any article the design of which has been copied
from a design protected under this chapter, without the consent of the
owner of the protected design. An infringing article is not an
illustration or picture of a protected design in an advertisement,
book, periodical, newspaper, photograph, broadcast, motion picture, or
similar medium or an article that embodies, in common with the
protected design, only elements described in section 1202. A design
shall not be deemed to have been copied from a protected design if it
is original and not substantially similar in appearance to a protected
design.
``(f) Establishing Originality.--The party to any action or
proceeding under this chapter who alleges rights under this chapter in
a design shall have the burden of establishing the design's originality
whenever the opposing party introduces an earlier work which is
identical to such design, or so similar as to make prima facie showing
that such design was copied from such work.
``(g) Reproduction for Teaching or Analysis.--It is not an
infringement of the exclusive rights of a design owner for a person to
reproduce the design in a vessel hull or in any other form solely for
the purpose of teaching, analyzing, or evaluating the appearance,
concepts, or techniques embodied in the design, or the function of the
vessel hull embodying the design.
``Sec. 1210. Application for registration
``(a) Time Limit for Application for Registration.--Protection
under this chapter shall be lost if application for registration of the
design is not made within one year after the date on which the design
is first made public.
``(b) When Design Is Made Public.--A design is made public when an
existing vessel hull embodying the design is anywhere publicly
exhibited, publicly distributed, or offered for sale or sold to the
public by the owner of the design or with the owner's consent.
``(c) Application by Owner of Design.--Application for registration
may be made by the owner of the design.
``(d) Contents of Application.--The application for registration
shall be made to the Administrator and shall state--
``(1) the name and address of the designer or designers of
the design;
``(2) the name and address of the owner if different from
the designer;
``(3) the specific name of the vessel hull embodying the
design;
``(4) the date, if any, that the design was first made
public, if such date was earlier than the date of the
application;
``(5) affirmation that the design has been fixed in a
useful article; and
``(6) such other information as may be required by the
Administrator.
The application for registration may include a description setting
forth the salient features of the design, but the absence of such a
description shall not prevent registration under this chapter.
``(e) Sworn Statement.--The application for registration shall be
accompanied by a statement under oath by the applicant or the
applicant's duly authorized agent or representative, setting forth, to
the best of the applicant's knowledge and belief--
``(1) that the design is original and was created by the
designer or designers named in the application;
``(2) that the design has not previously been registered on
behalf of the applicant or the applicant's predecessor in
title; and
``(3) that the applicant is the person entitled to
protection and to registration under this chapter.
If the design has been made public with the design notice prescribed in
section 1406, the statement shall also described the exact form and
position of the design notice.
``(f) Effect of Errors.--(1) Error in any statement or assertion as
to the utility of the vessel hull named in the application, the design
of which is sought to be registered, shall not affect the protection
secured under this chapter.
``(2) Errors in omitting a joint designer or in naming an alleged
joint designer shall not affect the validity of the registration, or
the actual ownership or the protection of the design, unless it is
shown that the error occurred with deceptive intent.
``(g) Design Made in Scope of Employment.--In a case in which the
design was made within the regular scope of the designer's employment
and individual authorship of the design is difficult or impossible to
ascribe and the application so states, the name and address of the
employer for whom the design was made may be stated instead of that of
the individual designer.
``(h) Pictorial Representation of Design.--The application for
registration shall be accompanied by two copies of a drawing or other
pictorial representation of the vessel hull having one or more views,
adequate to show the design, in a form and style suitable for
reproduction, which shall be deemed a part of the application.
``(i) Design in More Than One Useful Article.--If the
distinguishing elements of a design are in substantially the same form
in different vessel hulls, the design shall be protected as to all such
vessel hulls when protected as to one of them, but not more than one
registration shall be required for the design.
``(j) Application for More Than One Design.--More than one design
may be included in the same application under such conditions as may be
prescribed by the Administrator. For each design included in an
application the fee prescribed for a single design shall be paid.
``Sec. 1211. Benefit of earlier filing date in foreign country
``An application for registration of a design filed in the United
States by any person who has, or whose legal representative or
predecessor or successor in title has, previously filed an application
for registration of the same design in a foreign country which extends
to designs of owners who are citizens of the United States, or to
applications filed under this chapter, similar protection to that
provided under this chapter shall have that same effect as if filed in
the United States on the date on which the applications as first field
in any such foreign country, if the application in the United States is
filed within 6 months after the earliest date on which any such foreign
application was filed.
``Sec. 1212. Oaths and acknowledgments
``(a) In General.--Oaths and acknowledgments required by this
chapter--
``(1) may be made--
``(A) before any person in the United States
authorized by law to administer oaths, or
``(B) when made in a foreign country, before any
diplomatic or consular officer of the United States
authorized to administer oaths, or before any official
authorized to administer oaths in the foreign country
concerned, whose authority shall be proved by a
certificate of a diplomatic or consular officer of the
United States, and
``(2) shall be valid if they comply with the laws of the
State or country where made.
``(b) Written Declaration in Lieu of Oath.--(1) The Administrator
may by rule prescribe that any document which is to be filed under this
chapter in the Office of the Administrator and which is required by any
law, rule, or other regulation to be under oath, may be subscribed to
by a written declaration in such form as the Administrator may
prescribe, and such declaration shall be in lieu of the oath otherwise
required.
``(2) Whenever a written declaration under paragraph (1) is used,
the document containing the declaration shall state that willful false
statements are punishable by fine or imprisonment, or both, pursuant to
section 1001 of title 18, and may jeopardize the validity of the
application or document or a registration resulting therefrom.
``Sec. 1213. Examination of application and issue or refusal of
registration
``(a) Determination of Registrability of Design; Registration.--
Upon the filing of an application for registration in proper form under
section 1210, and upon payment of the fee prescribed under section
1216, the Administrator shall determine whether or not the application
relates to a design which on its face appears to be subject to
protection under this chapter, and, if so, the Register shall register
the design. Registration under this subsection shall be announced by
publication. The date of registration shall be the date of publication.
``(b) Refusal To Register; Reconsideration.--If, in the judgment of
the Administrator, the application for registration relates to a design
which on its face is not subject to protection under this chapter, the
Administrator shall send to the applicant a notice of refusal to
register and the grounds for the refusal. Within 3 months after the
date on which the notice of refusal is sent, the applicant may, by
written request, seek reconsideration of the application. After
consideration of such a request, the Administrator shall either
register the design or send to the applicant a notice of final refusal
to register.
``(c) Application To Cancel Registration.--Any person who believes
he or she is or will be damaged by a registration under this chapter
may, upon payment of the prescribed fee, apply to the Administrator at
any time to cancel the registration on the ground that the design is
not subject to protection under this chapter, stating the reasons for
the request. Upon receipt of an application for cancellation, the
Administrator shall send to the owner of the design, as shown in the
records of the Office of the Administrator, a notice of the
application, and the owner shall have a period of 3 months after the
date on which such notice is mailed in which to present arguments to
the Administrator for support of the validity of the registration. It
shall also be within the authority of the Administrator to establish,
by regulation, conditions under which the opposing parties may appear
and be heard in support of their arguments. If, after the periods
provided for the presentation of arguments have expired, the
Administrator determines that the applicant for cancellation has
established that the design is not subject to protection under this
chapter, the Administrator shall order the registration stricken from
the record. Cancellation under this subsection shall be announced by
publication, and notice of the Administrator's final determination with
respect to any application for cancellation shall be sent to the
applicant and to the owner of record.
``Sec. 1214. Certification of registration
``Certificates of registration shall be issued in the name of the
United States under the seal of the Office of the Register and shall be
recorded in the official records of that office. The certificate shall
state the name of the useful article, the date of filing of the
application, the date of registration, and the date the design was made
public, if earlier than the date of filing of the application, and
shall contain a reproduction of the drawing or other pictorial
representation of the design. If a description of the salient features
of the design appears in the application, this description shall also
appear in the certificate. A certificate of registration shall be
admitted in any court as prima facie evidence of the facts stated in
the certificate.
``Sec. 1215. Publication of announcements and indexes
``(a) Publications of the Administrator.--The Administrator shall
publish lists and indexes of registered designs and cancellations of
designs and may also publish the drawings or other pictorial
representations of registered designs for sale or other distribution.
``(b) File of Representatives of Registered Designs.--The
Administrator shall establish and maintain a file of the drawings or
other pictorial representations of registered designs. The file shall
be available for use by the public under such conditions as the
Administrator may prescribe.
``Sec. 1216. Fees
``The Administrator shall by regulation set reasonable fees for the
filing of applications to register designs under this chapter and for
other services relating to the administration of this chapter, taking
into consideration the cost of providing these services and the benefit
of a public record.
``Sec. 1217. Regulations
``The Administrator may establish regulations for the
administration of this chapter.
``Sec. 1218. Copies of records
``Upon payment of the prescribed fee, any person may obtain a
certified copy of any official record of the Office of the
Administrator that relates to this chapter. That copy shall be
admissible in evidence with the same effect as the original.
``Sec. 1219. Correction of errors in certificates
``The Register may, by a certificate of correction under seal,
correct any error in a registration incurred through the fault of the
Office, or, upon payment of the required fee, any error of a clerical
or typographical nature occurring in good faith but not through the
fault of the Office. Such registration, together with the certificate,
shall thereafter have the same effect as if it had been originally
issued in such corrected form.
``Sec. 1220. Ownership and transfer
``(a) Property Right in Design.--The property right in a design
subject to protection under this chapter shall vest in the designer,
the legal representatives of a deceased designer or of one under legal
incapacity, the employer for whom the designer created the design in
the case of a design made within the regular scope of the designer's
employment, or a person to whom the rights of the designer or of such
employer have been transferred. The person in whom the property right
is vested shall be considered the owner of the design.
``(b) Transfer of Property Right.--The property right in a
registered design, or a design for which an application for
registration has been or may be filed, may be assigned, granted,
conveyed, or mortgaged by an instrument in writing, signed by the
owner, or may be bequeathed by will.
``(c) Oath or Affirmation of Transfer.--An acknowledgment under
section 1212 shall be prima facie evidence of the execution of an
assignment, grant, conveyance, or mortgage under subsection (b).
``(d) Recordation of Transfer.--An assignment, grant, conveyance,
or mortgage under subsection (b) shall be void as against any
subsequent purchaser or mortgagee for a valuable consideration, unless
it is recorded in the Office of the Administrator within 3 months after
its date of execution or before the date of such subsequent purchase or
mortgage.
``Sec. 1221. Remedy for infringement
``(a) In General.--The owner of a design is entitled, after
issuance of a certificate of registration of the design under this
chapter, to institute an action for any infringement of the design.
``(b) Review of Refusal To Register.--(1) Subject to paragraph (2),
the owner of a design may seek judicial review of a final refusal of
the Administrator to register the design under this chapter by bringing
a civil action, and may in the same action, if the court adjudges the
design subject to protection under this chapter, enforce the rights in
that design under this chapter.
``(2) The owner of a design may seek judicial review under this
section if--
``(A) the owner has previously duly filed and prosecuted to
final refusal an application in proper form for registration of
the design;
``(B) the owner causes a copy of the complaint in the
action to be delivered to the Administrator within 10 days
after the commencement of the action; and
``(C) the defendant has committed acts in respect to the
design which would constitute infringement with respect to a
design protected under this chapter.
``(c) Administrator as Party to Action.--The Administrator may at
the Administrator's option, become a party to the action with respect
to the issue of registrability of the design claim by entering an
appearance within 60 days after being served with the complaint, but
the Register's failure to become a party shall not deprive the court of
jurisdiction to determine that issue.
``(d) Use of Arbitration To Resolve Dispute.--The parties to an
infringement dispute under this chapter, within such time as may be
specified by the Administrator by regulation, may determine the
dispute, or any aspect of the dispute, by arbitration. Arbitration
shall be governed by title 9. The parties shall give notice of any
arbitration award to the Administrator, and such award shall, as
between the parties to the arbitration, be dispositive of the issues to
which it relates. The arbitration award shall be unenforceable until
such notice is given. Nothing in this subsection shall preclude the
Administrator from determining whether a design is subject to
registration in a cancellation proceeding under section 1213(c).
Sec. 1222. Injunctions
``(a) In General.--A court having jurisdiction over actions under
this chapter may grant injunctions in accordance with the principles of
equity to prevent infringement, including, in its discretion, prompt
relief by temporary restraining orders and preliminary injunctions.
``(b) Damages for Injunctive Relief Wrongfully Obtained.--A seller
or distributor who suffers damage by reason of injunctive relief
wrongfully obtained under this section has a cause of action against
the applicant for such injunctive relief and may recover such relief as
may be appropriate, including damages for lost profits, cost of
materials, loss of good will, and punitive damages in instances where
the injunctive relief was sought in bade faiths, and, unless the court
finds extenuating circumstances, to recover a reasonable attorney's
fee.
``Sec. 1223. Recovery for infringement
``(a) Damages.--Upon a finding for the claimant in an action for
infringement under this chapter, the court shall award the claimant
damages adequate to compensate for the infringement. In addition, the
court may increase the damages to such amount, not exceeding $50,000 or
$1 per copy, whichever is greater, as the court determines to be just.
The damages awarded shall constitute compensation and not a penalty.
The court may receive expert testimony as an aid to the determination
of damages.
``(b) Infringer's Profits.--As an alternative to the remedies
provided in subsection (a), the court may award the claimant the
infringer's profits resulting from the sale of the copies if the court
finds that the infringer's sales are reasonably related to the use of
the claimant's design. In such a case, the claimant shall be required
to prove only the amount of the infringer's sales and the infringer
shall be required to prove its expenses against such sales.
``(c) Statute of Limitations.--No recovery under subsection (a) or
(b) shall be had for any infringement committed more than 3 years
before the date on which the complaint is filed.
``(d) Attorney's Fees.--In an action for infringement under this
chapter, the court may award reasonable attorney's fees to the
prevailing party.
``(e) Disposition of Infringing and Other Articles.--The court may
order that all infringing articles, and any plates, molds, patterns,
models, or other means specifically adapted for making the articles, be
delivered up for destruction or other disposition as the court may
direct.
``Sec. 1224. Power of court over registration
``In any action involving the protection of a design under this
chapter, the court, when appropriate, may order registration of a
design under this chapter or the cancellation of such a registration.
Any such order shall be certified by the court to the Administrator,
who shall make an appropriate entry upon the record.
``Sec. 1225. Liability for action on registration fraudulently obtained
``Any person who brings an action for infringement knowing that
registration of the design was obtained by a false or fraudulent
representation materially affecting the rights under this chapter,
shall be liable in the sum of $10,000, or such part of that amount as
the court may determine. That amount shall be to compensate the
defendant and shall be charged against the plaintiff and paid to the
defendant, in addition to such costs and attorney's fees of the
defendant as may be assessed by the court.
``Sec. 1226. Penalty for false marking
``(a) In General.--Whoever, for the purpose of deceiving the
public, marks upon, applies to, or uses in advertising in connection
with an article made, used, distributed, or sold, a design which is not
protected under this chapter, a design notice specified in section
1206, or any other words or symbols importing that the design is
protected under this chapter, knowing that the design is not so
protected, shall pay a civil fine of not more than $500 for each such
offense.
``(b) Suit by Private Persons.--Any person may sue for the penalty
established by subsection (a), in which event one-half of the penalty
shall be awarded to the person suing and the remainder shall be awarded
to the United States.
``Sec. 1227. Penalty for false representation
``Whoever knowingly makes a false representation materially
affecting the rights obtainable under this chapter for the purpose of
obtaining registration of a design under this chapter shall pay a
penalty of not less than $500 and not more than $1,000, and any rights
or privileges that individual may have in the design under this chapter
shall be forfeited.
``Sec. 1228. Enforcement by Treasury and Postal Service
``(a) Regulations.--The Secretary of the Treasury and the United
States Postal Service shall separately or jointly issue regulations for
the enforcement of the rights set forth in section 1208 with respect to
importation. These regulations may require, as a condition for the
exclusion of articles from the United States, that the person seeking
exclusion take any one or more of the following actions:
``(1) Obtain a court order enjoining, or an order of the
International Trade Commission under section 337 of the Tariff
Act of 1930 excluding, importation of the articles.
``(2) Furnish proof that the design involved is protected
under this chapter and that the importation of the articles
would infringe the rights in the design under this chapter.
``(3) Post a surety bond for any injury that may result if
the detention or exclusion of the articles proves to be
unjustified.
``(b) Seizure and Forfeiture.--Articles imported in violation of
the rights set forth in section 1208 are subject to seizure and
forfeiture in the same manner as property imported in violation of the
customs laws. Any such forfeited articles shall be destroyed as
directed by the Secretary of the Treasury or the court, as the case may
be, except that the articles may be returned to the country of export
whenever it is shown to the satisfaction of the Secretary of the
Treasury that the importer had no reasonable grounds for believing that
his or her acts constituted a violation of the law.
``Sec. 1229. Relation to design patent and copyright law
``The issuance of a design patent under title 35 for an original
design for an article of manufacture, or the issuance of a copyright
registration under title 17 for an original design, shall terminate any
protection of the original design under this chapter.
``Sec. 1230. Common law and other rights unaffected
``Nothing in this chapter shall annul or limit--
``(1) common law or other rights or remedies, if any,
available to or held by any person with respect to a design
which has not been registered under this chapter; or
``(2) any right under the trademark laws or any right
protected against unfair competition.
``Sec. 1231. Administrator
``The Administrator and Office of the Administrator referred to in
this chapter shall be the Register of Copyrights and the Copyrights
Office of the Library of Congress, respectively.
``Sec. 1232. No retroactive effect
``Protection under this chapter shall not be available for any
design that has been made public under section 1209(b) before the
effective date of this chapter.''.
SEC. 3. CONFORMING AMENDMENTS.
(a) Table of Chapters.--The table of chapters for title 17, United
States Code, is amended by adding at the end the following:
``12. Protection of Original Designs........................ 1201''.
(b) Jurisdiction of District Courts Over Design Actions.--(1)
Section 1338(c) of title 28, United States Code, is amended by
inserting ``, and to exclusive rights in designs under chapter 12 of
title 17,'' after ``title 17''.
(2)(A) The section heading for section 1338 of title 28, United
States Code, is amended by inserting ``designs,'' after ``mask
works,''.
(B) The item relating to section 1338 in the table of sections at
the beginning of chapter 85 of title 28, United States Code, is amended
by inserting ``designs,'' after ``mask works,''.
(c) Place of Design Actions.--Section 1400(a) of title 28, United
States Code, is amended by inserting ``or designs'' after ``mask
works,''.
(d) Actions Against the United States.--Section 1498(e) of title
28, United States Code, is amended by inserting ``, and to exclusive
rights in designs under chapter 12 of title 17,'' after ``title 17''.
SEC. 4. EFFECTIVE DATE.
The amendments made by sections 2 and 3 shall take effect one year
after the date of the enactment of this Act.
Purpose and Summary
The purpose of H.R. 1252, the ``Vessel Hull Design
Protection Act,'' is to offer limited protection for original
designs of vessel hulls which are subject to misappropriation
by persons who indulge in a marine industry practice known as
``hull splashing.''
Background and Need For Legislation
General Inadequacies of Present Law
Since 1789, American intellectual property law and unfair
trade statutes have evolved to afford substantial protection
for individuals and business entities wishing to prevent the
misappropriation of their works of authorship, inventions, and
reputations. Nonetheless, in recent years it has become more
apparent that this presently-constituted body of law is
inadequate to serve the needs of certain designers, including
those affiliated with the marine manufacturing industry. As
discussed below, designs of useful articles are frequently left
unprotected in the United States because safeguards available
under patent, copyright, and trademark law are too time-
consuming or expensive to acquire, or both.
Design Patents
The Design Patent Act of 1954 is codified at Section 171 of
Title 35 of the U.S. Code. This statute allows a person to
obtain a design patent for ``. . . any new, original, and
ornamental design for an article of manufacture . . .,'' and
provides that all provisions relating to patents for inventions
(utility patents) also apply.
More specifically, anyone wishing to obtain a design patent
for an article of manufacture must show that the design is:
1. Novel. Would an ``ordinary observer,'' viewing the
new design as a whole, consider it to be different
from, rather than a modification of, an already
existing design?
2. Nonobvious. Section 103 of the Patent Act requires
utility patents to be ``nonobvious;'' that is, ``the
differences between the subject matter . . . to be
patented and the prior art must be such that the
subject matter as a whole would not have been obvious
when the invention was made to a person having ordinary
skill in the relevant art . . .'' (italics added).
Erratically developed and applied through the years,
case law on this point suggests that nonobviousness
should be measured in terms of a ``designer of ordinary
capability who designs articles of the type presented
in the application.'' In re Nalbandian, 661 F.2d 1214,
1216 (C.C.P.A. 1981).
3. Ornamental. A design patent must create a pleasing
appearance.
4. Not Functional. If a design is ``primarily
functional rather than ornamental,'' or if it is
``dictated by functional considerations,'' it is not
patentable. Power Control Corp. v. Hybrinetics, Inc.,
806 F. 2d 234, 238 (Fed. Cir. 1986).
As a practical matter, anyone who secures a design patent
enjoys a monopoly over the use of the design for 14 years. But
the difficulty in meeting these extraordinarily high standards,
combined with the costs and delay associated with researching
prior art, dissuade many designers from pursuing this option.
Copyright and Design Protection of Useful Articles
Section 102 of Title 17 of the U.S. Code states that ``. .
. copyright protection subsists in original works of authorship
fixed in any tangible medium of expression . . . from which
they can be perceived, reproduced, or otherwise communicated,
either directly or with the aid of a machine or device.''
In addition, Section 101 of the Copyright Act of 1976
affords protection to ``useful'' articles. Pursuant to this
development, a useful article may be copyrightable if it has an
intrinsic utilitarian function that is not merely to portray
the appearance of the article or to convey information. The
relevant design must incorporate pictorial, graphic, or
sculptural features that can be identified separately from, and
are capable of existing independently of, the utilitarian
aspects of the article. For the most part, ``conceptual''
separability is enough to merit protection; that is, an
observer must see the article in part as a work of art, not
just an elegant functional item.
The benefits of applying for design protection under the
Copyright Act are manifest: instant protection upon creation,
relatively quick and inexpensive registration, and the
preserved option of applying later for design patent
protection. Nonetheless, courts have inconsistently applied
different standards when reviewing the merits of design claims;
in fact, many designs are rejected as ``unoriginal'' or
``functional.'' Design protection under present copyright law
is therefore spotty.
Trademark Protection of Industrial Design
While some states have their own trademark law, federal law
as prescribed by the Lanham Act (15 U.S.C. Sec. 1051, et. seq.)
is much preferred as it offers nationwide protection. In brief,
when an owner of a mark registers it with the Patent and
Trademark Office under the Lanham Act, he or she enjoys the
exclusive right to use that mark in connection with goods in
commerce. No person or business entity may use the same mark or
one of ``near resemblance'' in connection with other goods in
commerce so as to confuse or mislead consumers.
Trademark law acknowledges that the consuming public makes
a connection between a symbol that represents the attributes of
a given product and that product. This explains why industrial
designs usually cannot acquire protection under the Lanham Act;
that is, product design features are generally not distinctive
in a trademark sense. Unlike protected marks, they are not
recognized by the public as identifying a product source.
The time needed to acquire trademark status combined with
the absence of enforceable rights up to that point also
discourage designers from seeking protection under the Lanham
Act.
Abridged History of Design Reform
The initial attempt to enact a federal design protection
statute with broad, industry-wide application occurred in 1914,
and was followed by sporadic efforts to resurrect the issue in
other Congresses thereafter. These bills took one of two forms:
changes to copyright law or a ``relaxation'' of the
restrictions placed on design patents. Although the Senate
included a design provision in its version of the Copyright Act
amendments of 1976, it was deleted in conference. No other
bill, before or since, has come close to enactment.
What accounts for this legislative track record? Critics
from the academy as well as private industry have expressed
their concerns that design protection possibly upsets a
critical balance struck in intellectual property law,
especially the law of patents: namely, that the promotion of
innovation must, at some point, give way to imitation and
refinement through imitation, both of which are ``. . .
necessary to invention itself and the very lifeblood of a
competitive economy.'' Bonito Boats, Inc. v. Thunder Craft
Boats, Inc., 489 U.S. 141, 146 (1989) [hereinafter Bonito
Boats]. These critics fear that comprehensive design
legislation, practically applied, might diminish rather than
stimulate net commercial activity throughout the economy. Their
reasoning is that threshold requirements for protection under
most design schemes are less demanding than those under
traditional intellectual property law. This would result in
increased litigation and a general unwillingness to manufacture
competing products.
Advocates of design protection insist that these concerns
are overstated. They argue that, in the absence of creative
development, there can be no imitation. In addition, if the
threshold requirements for design protection are more easily
met than those applying to copyright, trademark, and patent
law, the solution is to offer less protection (usually measured
by duration).
Vessel Hull Designs and Bonito Boats
The experience of the marine manufacturing industry in the
wake of Bonito Boats, supra, illustrates the reformist view.
Bonito Boats was a Florida-based corporation that developed a
hull design for fiberglass recreational boats. The
manufacturing process entailed creating a hardwood model that
was then sprayed with fiberglass to create a mold which served
to produce the finished fiberglass boats for sale. The company
did not acquire utility or design patents for the hull or the
process. Six years later, the Florida General Assembly enacted
a so-called ``plug mold'' statute that prohibited the use of a
direct molding process to duplicate ``unpatented'' boat hulls,
and forbid the knowing sale of hulls so duplicated. When a
Tennessee corporation, Thunder Craft Boats, began duplicating
the hull designs and selling what amounted to knock-offs,
Bonito Boats sued under the Florida statute. The U.S. Supreme
Court affirmed the action of the Florida trial court, Court of
Appeals, and Supreme Court by dismissing the case, ruling that
the Supremacy Clause of the U.S. Constitution preempted state
action on the matter. The Court concluded by noting that ``[i]t
is for Congress to determine if the present system of design
and utility patents is ineffectual in promoting the useful arts
in the context of industrial design.'' Bonito Boats at 168.
Boat manufacturers invest significant resources in the
design and development of safe, structurally sound, and often
high-performance boat hull designs. Including research and
development costs, a boat manufacturer may invest as much as
$500,000 to produce a design from which one line of vessels can
be manufactured. When a boat hull is designed and the design
engineering and tooling process is complete, the engineers then
develop a boat ``plug'' from which they construct a boat
``mold.'' The manufacturer constructs a particular line of
boats from this mold.
In contrast, those intent on stealing the original boat
design, such as Thunder Craft, can simply use a finished boat
hull in place of the manufacturer's plug to develop a mold.
This practice is referred to in the trade as ``splashing a
mold.'' The copied mold can then be used to create a line of
vessels with a hull seemingly identical to that appropriated
from the design manufacturer.
``Hull splashing'' is a problem for consumers, as well as
manufacturers and boat design firms. Consumers who purchase
copied boats are defrauded in the sense that they are not
benefitting from the many attributes of hull design, other than
shape, that are structurally relevant, including those related
to quality and safety. It is also highly unlikely that consumer
know that a boat has been copied from an existing design. Most
importantly for the purposes of promoting intellectual property
rights, if manufacturers are not permitted to recoup at least
some of their research and development costs, they may no
longer invest in new, innovative boat designs that boaters
eagerly await.
Hearings
The Committee's Subcommittee on Courts and Intellectual
Property held one day of hearings on H.R. 2696 on October 23,
1997. Testimony was received from five witnesses representing
five organizations.
Committee Consideration
On February 26, 1998, the Subcommittee on Courts and
Intellectual Property met in open session and ordered reported
an amendment in the nature of a substitute to H.R. 2696 by
voice vote, a quorum being present. On March 3, 1998, the
Committee met in open session and ordered reported favorably
the amendment in the nature of a substitute to H.R. 2696,
without amendment by voice vote, a quorum being present.
Committee Oversight Findings
In compliance with clause 2(l)(3)(A) of rule XI of the
Rules of the House of Representatives, the Committee reports
that the findings and recommendations of the Committee, based
on oversight activities under clause 2(b)(l) of rule X of the
Rules of the House of Representatives, are incorporated in the
descriptive portions of this report.
Committee on Government Reform and Oversight Findings
No findings or recommendations of the Committee on
Government Reform and Oversight were received as referred to in
clause 2(1)(3)(D) of rule XI of the Rules of the House of
Representatives.
New Budget Authority and Tax Expenditures
Clause 2(1)(3)(B) of House Rule XI is inapplicable because
this legislation does not provide new budgetary authority or
increased tax expenditures.
Congressional Budget Office Estimate
U.S. Congress,
Congressional Budget Office,
Washington, DC, March 11, 1997.
Hon. Henry J. Hyde,
Chairman, Committee on the Judiciary,
House of Representatives, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for H.R. 2696, the Vessel
Hull Design Protection Act.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contacts are Kathleen
Gramp (for federal costs), who can be reached at 226-2860, and
Matthew Eyles (for the private-sector impact), who can be
reached at 226-2649.
Sincerely,
June E. O'Neill, Director.
Enclosure.
cc: Hon. John Conyers, Jr.
Ranking Minority Member
H.R. 2696--Vessel Hull Design Protection Act
H.R. 2696 would provide copyright protection to certain
vessel hull designs beginning one year after the enactment of
the bill. The bill would direct the Administrator of the U.S.
Copyright Office to establish a process for registering
copyrights of vessel designs and for hearing and arbitrating
disputes. The office also would be required to publish lists of
registered designs and make drawings or other representations
available to the public. Prospective applicants would be
required to pay fees set to cover most, if not all, of the
costs incurred by the agency to administer the program. The
bill provides remedies for infringements of registered designs
and specifies civil penalties for false representations or
labeling.
CBO estimates that enacting H.R. 2696 would have no
significant budgetary impact. Based on information from agency
and industry sources, CBO estimates that the Copyright Office
would spend about $200,000 in 1999 to establish the program and
another $200,000 each year thereafter to process registrations,
subject to appropriation of the necessary amounts. Offsetting
collections would increase by similar amounts beginning in
2000, the first year we would expect applicants for such
copyrights. CBO assumes that those collections would be
credited as an offset to annual appropriations.
Revenues from possible civil penalties are not expected to
be significant. Because this legislation would affect receipts,
pay-as-you-go procedures would apply. CBO estimates, however,
that the pay-as-you-go impact would be negligible.
H.R. 2696 would impose a new private-sector mandate, as
defined in the Unfunded Mandates Reform Act of 1995 (UMRA), by
creating new fees for firms and individuals who apply for
copyright protection of an original vessel hull design.
Copyright law and copyright fees are the exclusive domain of
the federal government. Therefore, an increase in existing
copyright fees or the imposition of new fees constitutes a new
enforceable duty and meets the definition of a private-sector
mandate in UMRA. Based on information from the Copyright
Office, CBO estimates that the direct costs of the new private-
sector mandate in the bill would be negligible and would fall
well below the $100 million statutory threshold in UMRA. The
bill contains no intergovernmental mandates as defined in UMRA,
and would not affect the budgets of state, local, or tribal
governments.
The CBO staff contacts for this estimate are Kathleen Gramp
(for federal costs), who can be reached at 226-2860, and
Matthew Eyles (for the private-sector impact), who can be
reached at 226-2649. This estimate was approved by Robert A.
Sunshine, Assistant Deputy Director for budget Analysis.
Constitutional Authority Statement
Pursuant to Rule XI, clause 2(1)(4) of the Rules of the
House of Representatives, the Committee finds the authority for
this legislation in Article I, clause 8, section 8 of the
Constitution.
Section-by-Section Analysis
Section 1. Title.
Section 1 creates the short title of the bill, the ``Vessel
Hull Design Protection Act of 1997.''
Section 2. Addition of Chapter 12 to Title 17 of the U.S. Code.
Designs Protected; Definitions (New Section 1201).
Subsection (a)(1) states that the ``. . . designer or other
owner of an original design of a `useful article' which makes
the article more attractive or distinctive in appearance to the
purchasing or using public may [receive protection under the
bill].'' A ``useful article'' is defined as a ``. . . vessel
hull . . ., including a plug or mold. . . .''
Subsection (a)(2) specifies that ``. . . the design of a
vessel hull . . ., including a plug or mold, is subject to
protection notwithstanding [the general utility exclusion set
forth in Section 1202(4)]. In other words, it is the intent of
the Committee that original designs of vessel hulls will be
subject to protection whether those designs are a function of
creative endeavor or utility.
Subsection (b)(1) specifies that a design is ``. . .
`original' if it is the result of the designer's creative
endeavor that provides a distinguishable variation over prior
work pertaining to similar articles which is more than merely
trivial and has not been copied from another source.''
Finally, since the problems of the marine manufacturing
industry giving rise to the legislation are directly related to
hull splashing, it is the intent of the Committee that this
activity is proscribed by the bill.
Designs not Subject to Protection (New Section 1202).
Section 1202 enumerates five descriptive elements, any one of
which will disqualify a design from protection under (new)
Chapter 12. This includes any design which is:
1. not original;
2. staple or commonplace, such as a standard
geometric figure, familiar symbol, emblem, or motif, or
other shape, pattern, or configuration which has become
standard, common, prevalent, or ordinary;
3. different from a design excluded by the second
listed element only in insignificant details or in
attributes which are variants commonly used in the
relevant trades;
4. dictated solely by a utilitarian function of the
article that embodies it; or
5. embodied in a useful article that was made public
by the designer or owner in the United States or a
foreign country more than one year before the date of
application for registration under Chapter 12.
Revisions, Adaptions, and Rearrangements (New Section
1203). This section protects a design that is a ``. . .
substantial revision, adaptation, or rearrangement of . . .
subject matter [that is excluded from protection under Section
1202].'' Even so, the excluded subject matter itself does not
receive any additional protection under the Chapter.
Commencement of Protection (New Section 1204). Design
protection under Chapter 12 begins the earlier of the date or
publication [Section 1213(a)] or the date the design is first
made public [Section 1210(b)].
Term of Protection (New Section 1205). Term for an
appropriate vessel hull design is 10 years, with a term running
to the end of the calendar year in which it would otherwise
expire.
Design Notice (New Section 1206). This section requires the
owner of a protected design to mark it with a design notice
consisting of the words ``Protected Design'' (or a prescribed
abbreviation thereof), the year on which protection commenced,
and the name of the owner (or a prescribed abbreviation
thereof). The registration number (see Section 1214), once
acquired, is an appropriate substitute for the last two
requirements.
Effect of Omission of Notice (New Section 1207). In
general, failure to supply notice pursuant to Section 1206 will
not cause loss of protection or prevent recovery for
infringement against any person who, ``. . . after receiving
written notice of the design protection, begins an undertaking
leading to infringement. . . .''
Moreover, the owner of a protected design who has not
complied with the notice requirements of Section 1206 may still
bring an action against an infringer even if the latter has not
received written notice prior to his or her undertaking. Under
these circumstances, the owner may not obtain an injunction
with respect to the infringing activity until he or she has
reimbursed the infringer for reasonable expenses incurred
before receiving written notice of protection. The burden of
providing written notice is on the owner.
Exclusive Rights (New Section 1208). The owner of a
protected design for a vessel hull has the exclusive right to
make, have made, or import, for sale or for use in trade, any
vessel hull embodying the design. The owner may also sell or
distribute for sale or for use in trade any vessel hull
embodying the design.
Infringement (New Section 1209). In general, infringement
occurs when a third party other than the owner of the protected
design performs any of the activities set forth in Section
1208.
Pursuant to Subsections (b) (1) and (2), a seller or
distributor will only be held liable if he or she colluded with
a manufacturer or an importer to infringe; or if he or she
refused or failed, upon the owner's request, to disclose
promptly and fully the source of the infringing product, and
then proceeded to order or reorder infringing product after
receiving written notice of protection.
It is not an act of infringement for a person to make, have
made, import, sell, or distribute any article embodying a
design that was created without knowledge that it was copied
from a protected design.
Similarly, a person who incorporates into his or her
product of manufacture an infringing article acquired from a
third party in the ordinary course of business; or who, without
knowledge of protection, makes or processes an infringing
article for the use of another shall not be deemed to have
infringed except under a condition set forth in Subsections (b)
(1) or (2), id.
Paragraph (e) defines an ``infringing article'' as ``. . .
any article, the design of which has been copied from a design
protected under . . . [C]hapter 12], without the consent of the
owner. . . . Illustrations or pictures of a protected design in
a book, newspaper, magazine, broadcast, motion picture, or
``similar medium'' do not constitute infringing articles.
Further, a design that ``. . . is original and not
substantially similar in appearance to a protected design''
will be deemed not to have been copied from a protected design.
Paragraph (f) places the burden on that party asserting a
right of protection in an infringement action to establish the
originality of his or her design whenever the other party
introduces an earlier work that is identical or highly similar
to the design, thereby suggesting that the design was copied
from the work.
Paragraph (g) permits a third party ``. . . to reproduce
the design in a vessel hull or other form for the purpose of
teaching, analyzing, or evaluating the appearance, concepts, or
techniques embodied in the design. . . .''
Finally, it is the intent of the Committee that the
knowledge requirements set forth in Section 1209 may be
satisfied by actual or constructive knowledge. Registration of
a design should suffice to establish this level of knowledge. A
design notice that conforms to the requirements of Section 1206
should also suffice to establish this level of knowledge, or at
least raise a presumption of actual knowledge.
Application for Registration (New Section 1210). Section
1210 states that protection is lost if the application for
design registration is not made within one year after the date
the design is first made ``public'' (meaning, when a vessel
hull embodying the design is publicly exhibited, displayed, or
offered by sale with the owner's consent).
Paragraph (d) of this Section prescribes relevant
information that must appear on the application form, and notes
that it may include ``. . . a description setting forth the
salient features of the design. . . .'' Failure to include a
description, however, shall not preclude registration from
occurring.
Paragraph (e) requires the owner to submit a sworn
statement along with the application attesting, inter alia, to
the originality of the design and the identity of the
designer(s). Good faith errors contained in the statement will
not render it defective.
Benefit of Earlier Filing Date in a Foreign Country (New
Section 1211). A person who registers for design protection in
a foreign country that extends design protection (similar to
that contained in Chapter 12) to U.S. citizens shall receive
the benefit of the earlier filing date when applying for
registration in the United States.
Oaths and Acknowledgments (New Section 1212). This section
establishes the miscellaneous terms by which any oaths required
under the Act may be delivered, including by a written
declaration.
Issue or Refusal of Application for Registration (New
Section 1213). Section 1213 sets forth the process by which the
``Administrator'' in charge of registration (see Section 1231)
examines an application, registers a design, refuses to
register one, and reconsiders a rejected application.
Of special note is that language in Paragraph (a) which
directs the Administrator to determine whether or not an
application ``. . . relates to a design which on its face
appears to be subject to protection . . .,'' and if so, to
register the design. It is the intent of the Committee that
this directive does not oblige the Administrator to compare the
design with registered and other known designs.
Certification of Registration (New Section 1214). Section
1214 lists the duties of the Administrator when recording a
registration certificate, as well as the contents of the
certificate.
Publication of Announcements and Indexes (New Section
1215). Section 1215 confers upon the Administrator the
authority to publish lists and indexes of registered as well as
canceled designs, along with drawings or other pictorial
representations of registered designs for sale or distribution.
Such drawings and pictorial representations shall be filed and
available for public use. Online publication is permitted under
this Section.
Fees (New Section 1216). The Administrator, by regulation,
shall set reasonable fees for the filing of applications and
other administrative services under Chapter 12.
Regulations (New Section 1217). This Section authorizes the
Administrator to establish regulations for the administration
of Chapter 12.
Copies of Records (New Section 1218). Section 1218 enables
anyone, upon payment of a prescribed fee, to obtain certified
copies of official records kept by the Administrator.
Correction of Errors in Certificates (New Section 1219).
This section empowers the Administrator to correct errors in
registration made by the Copyright Office or by the applicant
(if the error is clerical in nature and made in good faith).
Ownership and Transfer (New Section 1220). Property rights
in a design registered with the Copyright Office shall vest in
the designer, his or her legal representative, the employer of
the designer (if the design was created within the regular
scope of the designer's employment), or a person to whom the
rights of the designer or the employer have been transferred.
The rights may be assigned, granted, conveyed, mortgaged,
or bequeathed. With the exception of a bequest, any such
transfer shall be void as against any subsequent purchaser or
mortgagee for valuable consideration, unless it is recorded by
the Administrator within three months after its date of
execution or before the date of such subsequent purchase or
mortgage.
Remedy for Infringement (New Section 1221). The owner of a
design may seek judicial review of a final refusal by the
Administrator to register the design by bringing a civil
action. Parties to a registration dispute may determine it by
arbitration.
Injunctions (New Section 1222). Any court having
jurisdiction over actions under Chapter 12 may grant injunctive
relief. At the same time, a seller or distributor who suffers
damage as a result of injunctive relief wrongfully granted may
bring a cause of action against the applicant for injunctive
relief, and may be awarded reasonable damages.
Recovery for Infringement (New Section 1223). A court of
jurisdiction may award adequate compensatory damages to a
claimant in an infringement action. In addition, the court may
increase the damages ``. . . to such amount, not exceeding
$50,000 or $1 per copy, whichever is greater, as the court
determines to be just.''
As an alternative to compensatory damages, the court may
award the claimant the infringer's profits resulting from the
sale of infringing copies ``. . . if the court finds that the .
. . sales are reasonably related to the use of the claimant's
design.''
Attorney's fees may also be awarded, and a court may order
any infringing articles destroyed.
No recovery may be had for an infringement committed more
than three years before the date on which the complaint is
filed.
Power of Court Over Registration (New Section 1224). This
section empowers a court with jurisdiction to order
registration or cancellation of a design.
Liability for Action on Registration Fraudulently Obtained
(New Section 1225). Any person who brings an infringement
action knowing that registration was obtained by false or
fraudulent representation materially affecting Chapter 12
rights shall be liable for $10,000 or less as a court of
jurisdiction may determine, and shall be awarded to the
defendant as compensation, along with costs and attorney's
fees.
Penalty for False Marketing (New Section 1226). Any person
who, for the purpose of deceiving the public, uses notice
(Section 1206) for a design not registered under Chapter 12
shall pay a civil fine of not more than $500 for each offense.
Any person may sue for and receive one-half of the fine
assessed; the remainder shall be awarded to the United States.
Penalty for False Representation (New Section 1227). Any
person who knowingly makes a false representation materially
affecting Chapter 12 rights for the purpose of obtaining
registration shall pay a penalty of not less than $500 but not
more than $1,000, and shall forfeit any rights or privileges he
or she may otherwise have in the relevant design.
Enforcement by Treasury and Postal Service (New Section
1228). The Secretary of the Treasury and the U.S. Postal
Service shall separately or jointly issue regulation for the
enforcement of Section 1208 rights with respect to importation.
Prescribed actions leading to the exclusion of imported
articles are established. Any article imported in violation of
Section 1208 rights are subject to seizure and forfeiture under
the customs laws.
Relation to Design Patent and Copyright Law (New Section
1229). The issuance of a design patent for an article of
manufacture or a copyright registration for an original design
shall terminate any protection of the original design under
Chapter 12.
Common Law and Other Rights Unaffected (New Section 1230).
Nothing in Chapter 12 annuls or limits common law or other
rights or remedies available to a person for a design not
registered, or any rights under trademark or unfair competition
statutes.
Administrator (New Section 1231). The ``Administrator'' and
``Office of the Administrator'' referred to in Chapter 12 are
the Register of Copyrights and the U.S. Copyright Office,
respectively.
It is the intent of the Committee that the Administrator
will possess wide discretion to perform his or her duties under
by the bill in a cost-efficient manner, including the right to
publish registrations exclusively online.
No Retroactive Effect (New Section 1232). Protection under
Chapter 12 is unavailable for any design not made public
pursuant to Section 1209 before the effective date set forth in
Section Four.
Section 3: Conforming Amendments.
This section makes appropriate conforming amendments to the
U.S. Code.
Section 4: Effective Date.
The amendments set forth in Sections Two and Three of the
bill shall take effect one year after the date of enactment.
H.L.C.
Changes in Existing Law Made by the Bill, as Reported
In compliance with clause 3 of rule XIII of the Rules of
the House of Representatives, changes in existing law made by
the bill, as reported, are shown as follows (new matter is
printed in italics and existing law in which no change is
proposed is shown in roman):
TITLE 17, UNITED STATES CODE
* * * * * * *
Chap. Sec.
Subject Matter and Scope of Copyright..........................101
* * * * * * *
Protection of Original Designs................................1201
* * * * * * *
CHAPTER 12--PROTECTION OF ORIGINAL DESIGNS
Sec.
1201. Designs protected.
1202. Designs not subject to protection.
1203. Revisions, adaptations, and rearrangements.
1204. Commencement of protection.
1205. Term of protection.
1206. Design notice.
1207. Effect of omission of notice.
1208. Exclusive rights.
1209. Infringement.
1210. Application for registration.
1211. Benefit of earlier filing date in foreign country.
1212. Oaths and acknowledgments.
1213. Examination of application and issue or refusal of registration.
1214. Certification of registration.
1215. Publication of announcements and indexes.
1216. Fees.
1217. Regulations.
1218. Copies of records.
1219. Correction of errors in certificates.
1220. Ownership and transfer.
1221. Remedy for infringement.
1222. Injunctions.
1223. Recovery for infringement.
1224. Power of court over registration.
1225. Liability for action on registration fraudulently obtained.
1226. Penalty for false marking.
1227. Penalty for false representation.
1228. Enforcement by Treasury and Postal Service .
1229. Relation to design patent and copyright law.
1230. Common law and other rights unaffected.
1231. Administrator.
1232. No retroactive effect.
Sec. 1201. Designs protected
(a) Designs Protected.--
(1) In general.--The designer or other owner of an
original design of a useful article which makes the
article attractive or distinctive in appearance to the
purchasing or using public may secure the protection
provided by this chapter upon complying with and
subject to this chapter.
(2) Vessel hulls or component parts thereof.--The
design of a vessel hull or component part of a vessel
hull, including a plug or mold, is subject to
protection under this chapter, notwithstanding section
1202(4).
(b) Definitions.--For the purpose of this chapter, the
following terms have the following meanings:
(1) A design is ``original'' if it is the result of
the designer's creative endeavor that provides a
distinguishable variation over prior work pertaining to
similar articles which is more than merely trivial and
has not been copied from another source.
(2) A ``useful article'' is a vessel hull or a
component part thereof, including a plug or mold, which
in normal use has an intrinsic utilitarian function
that is not merely to portray the appearance of the
article or to convey information. An article which
normally is part of a useful article shall be deemed to
be a useful article.
(3) A ``vessel'' is a craft, especially one larger
than a rowboat, designed to navigate on water.
(4) A ``hull'' is the frame or body of a vessel,
exclusive of masts, sails, yards, and rigging.
(5) A ``plug'' means a device or model used to make
a mold for the purpose of exact duplication, regardless
of whether the device or model has an intrinsic
utilitarian function that is not only to portray the
appearance of the product or to convey information.
(6) A ``mold'' means a matrix or form in which a
substance for material is used, regardless of whether
the matrix or form has an intrinsic utilitarian
function that is not only to portray the appearance of
the product or to convey information.
Sec. 1202. Designs not subject to protection
Protection under this chapter shall not be available for a
design that is--
(1) not original;
(2) staple or commonplace, such as a standard
geometric figure, familiar symbol, emblem, or motif, or
other shape, pattern, or configuration which has become
standard, common, prevalent, or ordinary;
(3) different from a design excluded by paragraph
(2) only in insignificant details or in elements which
are variants commonly used in the relevant trades;
(4) dictated solely by a utilitarian function of
the article that embodies it; or
(5) embodied in a useful article that was made
public by the designer or owner in the United States or
a foreign country more than 1 year before the date of
the application for registration under this chapter.
Sec. 1203. Revisions, adaptations, and rearrangements
Protection for a design under this chapter shall be
available notwithstanding the employment in the design of
subject matter excluded from protection under section 1202 if
the design is a substantial revision, adaptation, or
rearrangement of such subject matter. Such protection shall be
independent of any subsisting protection in subject matter
employed in the design, and shall not be construed as securing
any right to subject matter excluded from protection under this
chapter or as extending any subsisting protection under this
chapter.
Sec. 1204. Commencement of protection
The protection provided for a design under this chapter
shall commence upon the earlier of the date of publication of
the registration under section 1213(a) or the date the design
is first made public as defined by section 1210(b).
Sec. 1205. Term of protection
(a) In General.--Subject to subsection (b), the protection
provided under this chapter for a design shall continue for a
term of 10 years from the date of the commencement of
protection under section 1204.
(b) Expiration.--All terms of protection provided in this
section shall run to the end of the calendar year in which they
would otherwise expire.
(c) Termination of Rights.--Upon expiration or termination
of protection in a particular design under this chapter, all
rights under this chapter in the design shall terminate,
regardless of the number of different articles in which the
design may have been used during the term of its protection.
Sec. 1206. Design notice
(a) Contents of Design Notice.--(1) Whenever any design for
which protection is sought under this chapter is made public
under section 1210(b), the owner of the design shall, subject
to the provisions of section 1207, mark it or have it marked
legibly with a design notice consisting of--
(A) the words ``Protected Design'', the
abbreviation ``Prot'd Des.'', or the letter ``D'' with
a circle, or the symbol *D*;
(B) the year of the date on which protection for
the design commenced; and
(C) the name of the owner, an abbreviation by which
the name can be recognized, or a generally accepted
alternative designation of the owner.
Any distinctive identification of the owner may be used for
purposes of subparagraph (C) if it has been approved and
recorded by the Administrator before the design marked with
such identification is registered.
(2) After registration, the registration number may be used
instead of the elements specified in subparagraphs (B) and (C)
of paragraph (1).
(b) Location of Notice.--The design notice shall be so
located and applied as to give reasonable notice of design
protection while the vessel hull embodying the design is
passing through its normal channels of commerce.
(c) Subsequent Removal of Notice.--When the owner of a
design has complied with the provisions of this section,
protection under this chapter shall not be affected by the
removal, destruction, or obliteration by others of the design
notice on an article.
Sec. 1207. Effect of omission of notice
(a) Actions With Notice.--Except as provided in subsection
(b), the omission of the notice prescribed in section 1206
shall not cause loss of the protection under this chapter or
prevent recovery for infringement under this chapter against
any person who, after receiving written notice of the design
protection, begins an undertaking leading to infringement under
this chapter.
(b) Actions Without Notice.--The omission of the notice
prescribed in section 1406 shall prevent any recovery under
section 1223 against a person who began an undertaking leading
to infringement under this chapter before receiving written
notice of the design protection. No injunction shall be issued
under this chapter with respect to such undertaking unless the
owner of the design reimburses that person for any reasonable
expenditure or contractual obligation in connection with such
undertaking that was incurred before receiving written notice
of the design protection, as the court in its discretion
directs. The burden of providing written notice of design
protection shall be on the owner of the design.
Sec. 1208. Exclusive rights
The owner of a design protected under this chapter has the
exclusive right to--
(1) make, have made, or import, for sale or for use
in trade, any vessel hull embodying that design; and
(2) sell or distribute for sale or for use in trade
any vessel hull embodying that design.
Sec. 1209. Infringement
(a) Acts of Infringement.--Except as provided in subjection
(b), it shall be infringement of the exclusive rights in a
design protected under this chapter for any person, without the
consent of the owner of the design, within the United States
and during the term of such protection, to--
(1) make, have made, or import, for sale or for use
in trade, any infringing article as defined in
subsection (e); or
(2) sell or distribute for sale or for use in trade
any such infringing article.
(b) Acts of Sellers and Distributors.--A seller or
distributor of an infringing article who did not make or import
the vessel hull shall be deemed to have infringed on a design
protected under this chapter only if that person--
(1) induced or acted in collusion with a
manufacturer to make, or an importer to import such
article, except that merely purchasing or giving an
order to purchase a vessel hull in the ordinary course
of business shall not of itself constitute such
inducement or collusion; or
(2) refused or failed, upon the request of the
owner of the design, to make a prompt and full
disclosure of that person's source of such vessel hull,
and that person orders or reorders such article after
having receiving notice by registered or certified mail
of the protection subsisting in the design.
(c) Acts Without Knowledge.--It shall not be infringement
under this section to make, have made, import, sell, or
distribute, any vessel hull embodying a design which was
created without knowledge that a design was protected under
this chapter and was copied from such protected design.
(d) Acts in Ordinary Course of Business.--A person who
incorporates into that person's product of manufacture an
infringing article acquired from others in the ordinary course
of business, or who, without knowledge of the protected design
embodied in an infringing article, makes or processes the
infringing article for the account of another person in the
ordinary course of business, shall not be deemed to have
infringed the rights in that design under this chapter except
under a condition contained in paragraph (1) or (2) of
subsection (b). Accepting an order or reorder from the source
of the infringing article shall be deemed ordering or
reordering within the meaning of subsection (b)(2).
(e) Infringing Article Defined.--As used in this section,
an ``infringing article'' is any article the design of which
has been copied from a design protected under this chapter,
without the consent of the owner of the protected design. An
infringing article is not an illustration or picture of a
protected design in an advertisement, book, periodical,
newspaper, photograph, broadcast, motion picture, or similar
medium or an article that embodies, in common with the
protected design, only elements described in section 1202. A
design shall not be deemed to have been copied from a protected
design if it is original and not substantially similar in
appearance to a protected design.
(f) Establishing Originality.--The party to any action or
proceeding under this chapter who alleges rights under this
chapter in a design shall have the burden of establishing the
design's originality whenever the opposing party introduces an
earlier work which is identical to such design, or so similar
as to make prima facie showing that such design was copied from
such work.
(g) Reproduction for Teaching or Analysis.--It is not an
infringement of the exclusive rights of a design owner for a
person to reproduce the design in a vessel hull or in any other
form solely for the purpose of teaching, analyzing, or
evaluating the appearance, concepts, or techniques embodied in
the design, or the function of the vessel hull embodying the
design.
Sec. 1210. Application for registration
(a) Time Limit for Application for Registration.--
Protection under this chapter shall be lost if application for
registration of the design is not made within one year after
the date on which the design is first made public.
(b) When Design Is Made Public.--A design is made public
when an existing vessel hull embodying the design is anywhere
publicly exhibited, publicly distributed, or offered for sale
or sold to the public by the owner of the design or with the
owner's consent.
(c) Application by Owner of Design.--Application for
registration may be made by the owner of the design.
(d) Contents of Application.--The application for
registration shall be made to the Administrator and shall
state--
(1) the name and address of the designer or
designers of the design;
(2) the name and address of the owner if different
from the designer;
(3) the specific name of the vessel hull embodying
the design;
(4) the date, if any, that the design was first
made public, if such date was earlier than the date of
the application;
(5) affirmation that the design has been fixed in a
useful article; and
(6) such other information as may be required by
the Administrator.
The application for registration may include a description
setting forth the salient features of the design, but the
absence of such a description shall not prevent registration
under this chapter.
(e) Sworn Statement.--The application for registration
shall be accompanied by a statement under oath by the applicant
or the applicant's duly authorized agent or representative,
setting forth, to the best of the applicant's knowledge and
belief--
(1) that the design is original and was created by
the designer or designers named in the application;
(2) that the design has not previously been
registered on behalf of the applicant or the
applicant's predecessor in title; and
(3) that the applicant is the person entitled to
protection and to registration under this chapter.
If the design has been made public with the design notice
prescribed in section 1406, the statement shall also described
the exact form and position of the design notice.
(f) Effect of Errors.--(1) Error in any statement or
assertion as to the utility of the vessel hull named in the
application, the design of which is sought to be registered,
shall not affect the protection secured under this chapter.
(2) Errors in omitting a joint designer or in naming an
alleged joint designer shall not affect the validity of the
registration, or the actual ownership or the protection of the
design, unless it is shown that the error occurred with
deceptive intent.
(g) Design Made in Scope of Employment.--In a case in which
the design was made within the regular scope of the designer's
employment and individual authorship of the design is difficult
or impossible to ascribe and the application so states, the
name and address of the employer for whom the design was made
may be stated instead of that of the individual designer.
(h) Pictorial Representation of Design.--The application
for registration shall be accompanied by two copies of a
drawing or other pictorial representation of the vessel hull
having one or more views, adequate to show the design, in a
form and style suitable for reproduction, which shall be deemed
a part of the application.
(i) Design in More Than One Useful Article.--If the
distinguishing elements of a design are in substantially the
same form in different vessel hulls, the design shall be
protected as to all such vessel hulls when protected as to one
of them, but not more than one registration shall be required
for the design.
(j) Application for More Than One Design.--More than one
design may be included in the same application under such
conditions as may be prescribed by the Administrator. For each
design included in an application the fee prescribed for a
single design shall be paid.
Sec. 1211. Benefit of earlier filing date in foreign country
An application for registration of a design filed in the
United States by any person who has, or whose legal
representative or predecessor or successor in title has,
previously filed an application for registration of the same
design in a foreign country which extends to designs of owners
who are citizens of the United States, or to applications filed
under this chapter, similar protection to that provided under
this chapter shall have that same effect as if filed in the
United States on the date on which the applications as first
field in any such foreign country, if the application in the
United States is filed within 6 months after the earliest date
on which any such foreign application was filed.
Sec. 1212. Oaths and acknowledgments
(a) In General.--Oaths and acknowledgments required by this
chapter--
(1) may be made--
(A) before any person in the United States
authorized by law to administer oaths, or
(B) when made in a foreign country, before
any diplomatic or consular officer of the
United States authorized to administer oaths,
or before any official authorized to administer
oaths in the foreign country concerned, whose
authority shall be proved by a certificate of a
diplomatic or consular officer of the United
States, and
(2) shall be valid if they comply with the laws of
the State or country where made.
(b) Written Declaration in Lieu of Oath.--(1) The
Administrator may by rule prescribe that any document which is
to be filed under this chapter in the Office of the
Administrator and which is required by any law, rule, or other
regulation to be under oath, may be subscribed to by a written
declaration in such form as the Administrator may prescribe,
and such declaration shall be in lieu of the oath otherwise
required.
(2) Whenever a written declaration under paragraph (1) is
used, the document containing the declaration shall state that
willful false statements are punishable by fine or
imprisonment, or both, pursuant to section 1001 of title 18,
and may jeopardize the validity of the application or document
or a registration resulting therefrom.
Sec. 1213. Examination of application and issue or refusal of
registration
(a) Determination of Registrability of Design;
Registration.--Upon the filing of an application for
registration in proper form under section 1210, and upon
payment of the fee prescribed under section 1216, the
Administrator shall determine whether or not the application
relates to a design which on its face appears to be subject to
protection under this chapter, and, if so, the Register shall
register the design. Registration under this subsection shall
be announced by publication. The date of registration shall be
the date of publication.
(b) Refusal To Register; Reconsideration.--If, in the
judgment of the Administrator, the application for registration
relates to a design which on its face is not subject to
protection under this chapter, the Administrator shall send to
the applicant a notice of refusal to register and the grounds
for the refusal. Within 3 months after the date on which the
notice of refusal is sent, the applicant may, by written
request, seek reconsideration of the application. After
consideration of such a request, the Administrator shall either
register the design or send to the applicant a notice of final
refusal to register.
(c) Application To Cancel Registration.--Any person who
believes he or she is or will be damaged by a registration
under this chapter may, upon payment of the prescribed fee,
apply to the Administrator at any time to cancel the
registration on the ground that the design is not subject to
protection under this chapter, stating the reasons for the
request. Upon receipt of an application for cancellation, the
Administrator shall send to the owner of the design, as shown
in the records of the Office of the Administrator, a notice of
the application, and the owner shall have a period of 3 months
after the date on which such notice is mailed in which to
present arguments to the Administrator for support of the
validity of the registration. It shall also be within the
authority of the Administrator to establish, by regulation,
conditions under which the opposing parties may appear and be
heard in support of their arguments. If, after the periods
provided for the presentation of arguments have expired, the
Administrator determines that the applicant for cancellation
has established that the design is not subject to protection
under this chapter, the Administrator shall order the
registration stricken from the record. Cancellation under this
subsection shall be announced by publication, and notice of the
Administrator's final determination with respect to any
application for cancellation shall be sent to the applicant and
to the owner of record.
Sec. 1214. Certification of registration
Certificates of registration shall be issued in the name of
the United States under the seal of the Office of the Register
and shall be recorded in the official records of that office.
The certificate shall state the name of the useful article, the
date of filing of the application, the date of registration,
and the date the design was made public, if earlier than the
date of filing of the application, and shall contain a
reproduction of the drawing or other pictorial representation
of the design. If a description of the salient features of the
design appears in the application, this description shall also
appear in the certificate. A certificate of registration shall
be admitted in any court as prima facie evidence of the facts
stated in the certificate.
Sec. 1215. Publication of announcements and indexes
(a) Publications of the Administrator.--The Administrator
shall publish lists and indexes of registered designs and
cancellations of designs and may also publish the drawings or
other pictorial representations of registered designs for sale
or other distribution.
(b) File of Representatives of Registered Designs.--The
Administrator shall establish and maintain a file of the
drawings or other pictorial representations of registered
designs. The file shall be available for use by the public
under such conditions as the Administrator may prescribe.
Sec. 1216. Fees
The Administrator shall by regulation set reasonable fees
for the filing of applications to register designs under this
chapter and for other services relating to the administration
of this chapter, taking into consideration the cost of
providing these services and the benefit of a public record.
Sec. 1217. Regulations
The Administrator may establish regulations for the
administration of this chapter.
Sec. 1218. Copies of records
Upon payment of the prescribed fee, any person may obtain a
certified copy of any official record of the Office of the
Administrator that relates to this chapter. That copy shall be
admissible in evidence with the same effect as the original.
Sec. 1219. Correction of errors in certificates
The Register may, by a certificate of correction under
seal, correct any error in a registration incurred through the
fault of the Office, or, upon payment of the required fee, any
error of a clerical or typographical nature occurring in good
faith but not through the fault of the Office. Such
registration, together with the certificate, shall thereafter
have the same effect as if it had been originally issued in
such corrected form.
Sec. 1220. Ownership and transfer
(a) Property Right in Design.--The property right in a
design subject to protection under this chapter shall vest in
the designer, the legal representatives of a deceased designer
or of one under legal incapacity, the employer for whom the
designer created the design in the case of a design made within
the regular scope of the designer's employment, or a person to
whom the rights of the designer or of such employer have been
transferred. The person in whom the property right is vested
shall be considered the owner of the design.
(b) Transfer of Property Right.--The property right in a
registered design, or a design for which an application for
registration has been or may be filed, may be assigned,
granted, conveyed, or mortgaged by an instrument in writing,
signed by the owner, or may be bequeathed by will.
(c) Oath or Affirmation of Transfer.--An acknowledgment
under section 1212 shall be prima facie evidence of the
execution of an assignment, grant, conveyance, or mortgage
under subsection (b).
(d) Recordation of Transfer.--An assignment, grant,
conveyance, or mortgage under subsection (b) shall be void as
against any subsequent purchaser or mortgagee for a valuable
consideration, unless it is recorded in the Office of the
Administrator within 3 months after its date of execution or
before the date of such subsequent purchase or mortgage.
Sec. 1221. Remedy for infringement
(a) In General.--The owner of a design is entitled, after
issuance of a certificate of registration of the design under
this chapter, to institute an action for any infringement of
the design.
(b) Review of Refusal To Register.--(1) Subject to
paragraph (2), the owner of a design may seek judicial review
of a final refusal of the Administrator to register the design
under this chapter by bringing a civil action, and may in the
same action, if the court adjudges the design subject to
protection under this chapter, enforce the rights in that
design under this chapter.
(2) The owner of a design may seek judicial review under
this section if--
(A) the owner has previously duly filed and
prosecuted to final refusal an application in proper
form for registration of the design;
(B) the owner causes a copy of the complaint in the
action to be delivered to the Administrator within 10
days after the commencement of the action; and
(C) the defendant has committed acts in respect to
the design which would constitute infringement with
respect to a design protected under this chapter.
(c) Administrator as Party to Action.--The Administrator
may at the Administrator's option, become a party to the action
with respect to the issue of registrability of the design claim
by entering an appearance within 60 days after being served
with the complaint, but the Register's failure to become a
party shall not deprive the court of jurisdiction to determine
that issue.
(d) Use of Arbitration To Resolve Dispute.--The parties to
an infringement dispute under this chapter, within such time as
may be specified by the Administrator by regulation, may
determine the dispute, or any aspect of the dispute, by
arbitration. Arbitration shall be governed by title 9. The
parties shall give notice of any arbitration award to the
Administrator, and such award shall, as between the parties to
the arbitration, be dispositive of the issues to which it
relates. The arbitration award shall be unenforceable until
such notice is given. Nothing in this subsection shall preclude
the Administrator from determining whether a design is subject
to registration in a cancellation proceeding under section
1213(c).
Sec. 1222. Injunctions
(a) In General.--A court having jurisdiction over actions
under this chapter may grant injunctions in accordance with the
principles of equity to prevent infringement, including, in its
discretion, prompt relief by temporary restraining orders and
preliminary injunctions.
(b) Damages for Injunctive Relief Wrongfully Obtained.--A
seller or distributor who suffers damage by reason of
injunctive relief wrongfully obtained under this section has a
cause of action against the applicant for such injunctive
relief and may recover such relief as may be appropriate,
including damages for lost profits, cost of materials, loss of
good will, and punitive damages in instances where the
injunctive relief was sought in bade faiths, and, unless the
court finds extenuating circumstances, to recover a reasonable
attorney's fee.
Sec. 1223. Recovery for infringement
(a) Damages.--Upon a finding for the claimant in an action
for infringement under this chapter, the court shall award the
claimant damages adequate to compensate for the infringement.
In addition, the court may increase the damages to such amount,
not exceeding $50,000 or $1 per copy, whichever is greater, as
the court determines to be just. The damages awarded shall
constitute compensation and not a penalty. The court may
receive expert testimony as an aid to the determination of
damages.
(b) Infringer's Profits.--As an alternative to the remedies
provided in subsection (a), the court may award the claimant
the infringer's profits resulting from the sale of the copies
if the court finds that the infringer's sales are reasonably
related to the use of the claimant's design. In such a case,
the claimant shall be required to prove only the amount of the
infringer's sales and the infringer shall be required to prove
its expenses against such sales.
(c) Statute of Limitations.--No recovery under subsection
(a) or (b) shall be had for any infringement committed more
than 3 years before the date on which the complaint is filed.
(d) Attorney's Fees.--In an action for infringement under
this chapter, the court may award reasonable attorney's fees to
the prevailing party.
(e) Disposition of Infringing and Other Articles.--The
court may order that all infringing articles, and any plates,
molds, patterns, models, or other means specifically adapted
for making the articles, be delivered up for destruction or
other disposition as the court may direct.
Sec. 1224. Power of court over registration
In any action involving the protection of a design under
this chapter, the court, when appropriate, may order
registration of a design under this chapter or the cancellation
of such a registration. Any such order shall be certified by
the court to the Administrator, who shall make an appropriate
entry upon the record.
Sec. 1225. Liability for action on registration fraudulently obtained
Any person who brings an action for infringement knowing
that registration of the design was obtained by a false or
fraudulent representation materially affecting the rights under
this chapter, shall be liable in the sum of $10,000, or such
part of that amount as the court may determine. That amount
shall be to compensate the defendant and shall be charged
against the plaintiff and paid to the defendant, in addition to
such costs and attorney's fees of the defendant as may be
assessed by the court.
Sec. 1226. Penalty for false marking
(a) In General.--Whoever, for the purpose of deceiving the
public, marks upon, applies to, or uses in advertising in
connection with an article made, used, distributed, or sold, a
design which is not protected under this chapter, a design
notice specified in section 1206, or any other words or symbols
importing that the design is protected under this chapter,
knowing that the design is not so protected, shall pay a civil
fine of not more than $500 for each such offense.
(b) Suit by Private Persons.--Any person may sue for the
penalty established by subsection (a), in which event one-half
of the penalty shall be awarded to the person suing and the
remainder shall be awarded to the United States.
Sec. 1227. Penalty for false representation
Whoever knowingly makes a false representation materially
affecting the rights obtainable under this chapter for the
purpose of obtaining registration of a design under this
chapter shall pay a penalty of not less than $500 and not more
than $1,000, and any rights or privileges that individual may
have in the design under this chapter shall be forfeited.
Sec. 1228. Enforcement by Treasury and Postal Service
(a) Regulations.--The Secretary of the Treasury and the
United States Postal Service shall separately or jointly issue
regulations for the enforcement of the rights set forth in
section 1208 with respect to importation. These regulations may
require, as a condition for the exclusion of articles from the
United States, that the person seeking exclusion take any one
or more of the following actions:
(1) Obtain a court order enjoining, or an order of
the International Trade Commission under section 337 of
the Tariff Act of 1930 excluding, importation of the
articles.
(2) Furnish proof that the design involved is
protected under this chapter and that the importation
of the articles would infringe the rights in the design
under this chapter.
(3) Post a surety bond for any injury that may
result if the detention or exclusion of the articles
proves to be unjustified.
(b) Seizure and Forfeiture.--Articles imported in violation
of the rights set forth in section 1208 are subject to seizure
and forfeiture in the same manner as property imported in
violation of the customs laws. Any such forfeited articles
shall be destroyed as directed by the Secretary of the Treasury
or the court, as the case may be, except that the articles may
be returned to the country of export whenever it is shown to
the satisfaction of the Secretary of the Treasury that the
importer had no reasonable grounds for believing that his or
her acts constituted a violation of the law.
Sec. 1229. Relation to design patent and copyright law
The issuance of a design patent under title 35 for an
original design for an article of manufacture, or the issuance
of a copyright registration under title 17 for an original
design, shall terminate any protection of the original design
under this chapter.
Sec. 1230. Common law and other rights unaffected
Nothing in this chapter shall annul or limit--
(1) common law or other rights or remedies, if any,
available to or held by any person with respect to a
design which has not been registered under this
chapter; or
(2) any right under the trademark laws or any right
protected against unfair competition.
Sec. 1231. Administrator
The Administrator and Office of the Administrator referred
to in this chapter shall be the Register of Copyrights and the
Copyrights Office of the Library of Congress, respectively.
Sec. 1232. No retroactive effect
Protection under this chapter shall not be available for
any design that has been made public under section 1209(b)
before the effective date of this chapter.
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TITLE 28, UNITED STATES CODE
* * * * * * *
PART IV--JURISDICTION AND VENUE
* * * * * * *
CHAPTER 85--DISTRICT COURTS; JURISDICTION
Sec.
1330. Actions against foreign states.
* * * * * * *
1338. Patents, plant variety protection, copyrights, mask works,
designs, trade-marks, and unfair competition.
* * * * * * *
Sec. 1338. Patents, plant variety protection, copyrights, mask works,
designs, trade-marks, and unfair competition
(a) * * *
* * * * * * *
(c) Subsections (a) and (b) apply to exclusive rights in
mask works under chapter 9 of title 17, and to exclusive rights
in designs under chapter 12 of title 17, to the same extent as
such subsections apply to copyrights.
* * * * * * *
Sec. 1400. Patents and copyrights
(a) Civil actions, suits, or proceedings arising under any
Act of Congress relating to copyrights in mask works or designs
may be instituted in the district in which the defendant or his
agent resides or may be found.
* * * * * * *
Sec. 1498. Patent and copyrights cases
(a) * * *
* * * * * * *
(e) Subsections (b) and (c) of this section apply to
exclusive rights in mask words under chapter 9 of title 17, and
to exclusive rights in designs under chapter 12 of title 17, to
the same extent as such subsections apply to copyrights.
* * * * * * *
