Protecting Intellectual Property A Succesful Case Study

DECO Australia is a rapidly growing supplier of innovative aluminium building products, including cladding, decking, battens and flooring. Most of these products are sold with the well-known and trusted DecoWood® woodgrain powder coating. All of DECO’s products are innovative, being designed and developed by DECO, and most are protected by patents.

There is a lot of mythology in the aluminium extrusion industry regarding protecting designs of profiles. Comments are often made that you can’t protect the intellectual property of aluminium extrusions, because ‘it has all been done before’ and that ‘you only have to change a design slightly to get around and patents’.

DECO has proven that this is not correct, and you can successfully protect the design of your aluminium extrusions when it comes to building products. This article discusses some of the issues involved with Intellectual Property (IP) protection and how DECO has successfully defended its IP.

Five Imperatives of Protecting Intellectual Property

Before embarking on seeking protection for IP, there are several factors to consider. The first is that a Patent, Trademark or Design Registration is only worth what you are prepared to defend it with. You can spend a lot of money with Patent and Trademark Attorneys, but this investment will be wasted, if you are not willing to defend the IP. If you are not willing to defend the IP, then don’t waste money protecting it.

Second, defending IP is expensive, so you’ll need to have finances set aside to pursue an infringement. In addition, during a case the other side will ask the court for a security of their costs, in the event that you lose. This effectively doubles the financial outlay you will need to provide.

Third, it is important to approach the defence of IP like you do with any other business investment decision. This means not reacting emotionally about someone ‘stealing your design’. You need to consider the market size, what it is worth to you, how much market share you are losing to an infringer and to quantify this in terms of lost revenue. This needs to be balanced against the investment cost of pursuing an infringer through legal means, what is the risk of winning or losing, and what the likely return on investment will be in the case that you win.

The fourth key issue relates to human resources. You need a senior person to manage and run a defence, and this is very time consuming. It is a mistake to think that you can run a ‘business as usual’ and find the time to deal with the many issues arising from a legal case.

The fifth issue is that intellectual property protection is complex and makes your head hurt trying to understand it. The key issue here is that you need to engage a Patent or Trademark Attorney and specialist IP Solicitor who you can trust as being competent, and who will act in your best interests.

Case Study: Aluminium Cladding Patent Infringement Case - DECO Australia v Aliwood

The case study cited in this article is DECO Australia v Aliwood Pty Ltd [2021] FCA 1159, which proceeded in the Federal Court of Australia. Aliwood is an importer of finished aluminium building products, and DECO alleged that Aliwood directly copied the design of DECO’s DecoClad® aluminium cladding board. There is a lot of legal complexity and cost involved with preparing for such a case, and this is where the issues of cost and management time come to the fore.

The usual processes of mediation took place but was unsuccessful, so a trial date was set by the judge. Following several inadequate settlement offers by Aliwood, on the day before the trial, a settlement was reached where Aliwood agreed to take the alleged infringing cladding off the market, dispose of any stock and to pay DECO a considerable sum of money.

Subsequently, DECO experienced an immediate surge in orders for projects where DecoClad® had been specified but had previously been lost to Aliwood who would say that ‘this is the same as DecoClad® but is 20% less’. This returns us to the issue of being able to quantify the return on investment.