Business

Copied and undercut – a designer's nightmare

DesignByThem learned the value of registering their designs the hard way. But they say IP protections in Australia don't go far enough.

When Sarah Gibson co-founded her furniture and homewares business, DesignByThem, the goal was simple:  to give Australian designers a bigger platform in an industry where European designs tend to dominate.

So it came as a shock when she found one of her best-selling products - a letterbox - had been copied, causing sales to dry up.

"We use to sell 75 a month and it dropped to 25 a month,” she says.

At a retail price of $330 dollars each (at the time), it was a huge loss of revenue.

The knockoff, meanwhile, had been priced at $89 and was selling through a major retailer.

It was such a good copy that Sarah says the only noticeable difference was the use of a metal rivet instead of a nylon pivot.

She says the experience left her feeling robbed.

The nylon pivot used in DesignByThem's original letter box (above), compared to the metal rivet in the copy (below).
The nylon pivot used in DesignByThem's original letter box (above), compared to the metal rivet in the copy (below).
Supplied

But Sarah's story isn't an uncommon one.

Noel Kim, a trademark attorney at Sydney law firm HH Lawyers, says the furniture and fashion industries are particularly vulnerable to copying because their products have a relatively short life cycle.

"Most small businesses cannot afford to register every single design," he says.

That's because the registration process costs hundreds of dollars.

It's part of the reason DesignByThem never actually registered their letterbox.

"When we first started, there was reputation in the industry that you didn't need to register designs, that someone was probably going to change it by 15 per cent and copy it anyways," Sarah says.

"It was very naive, but it was one our first products and we learned the lesson very quickly."

Luckily, a cease and desist letter managed to do the trick in this case, and the letterbox copy eventually disappeared from the shelves.

DesignByThem has since spent tens of thousands of dollars registering all of their subsequent designs.

But Sarah says there's still a flaw in the system: designs are only protected for a maximum of 10 years in Australia.

DesignByThem co-founder Sarah Gibson.
DesignByThem co-founder Sarah Gibson.
Supplied

She feels that isn’t good enough when compared to protection terms of 15 years in the US, and 25 years in the UK.

"So say we produce a product and ten years later the IP expires - someone else can go and make that design and sell it. When we're investing in new development, how much do you invest when you can only sell it for ten years?"

Protection policy

Celia Poole from IP Australia - the government agency that administers intellectual property rights - says there’s a good rational for not extending protection terms beyond ten years here.

"Every jurisdiction has its own factors and considerations at play. One of the things we're really conscious of is 62 per cent of the design rights in Australia actually originate overseas. So we may, in fact, be benefiting people who are based overseas, more than consumers and designers in Australia."

Celia says Canada, like Australia, also has protection terms of ten years at the moment.

Lesson learned

Despite their copycat experience, DesignByThem’s letterbox is still one of their more popular products, and Sarah’s managed to find a silver lining out of the ordeal too.

"The lesson we learned was if someone can produce something way cheaper than [us], maybe we should consider that. And so we made our product more competitive - we now make it overseas, more people can afford it, and it’s still authentically designed. So that was a good lesson to learn actually."

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