Innovation and originality are key to success in jewellery business. While copying is not a new phenomenon in the trade, the issue of intellectual property rights (IPR) is seldom discussed. Having finished a lawsuit recently over patent infringement that lasted nearly six years, Rocky Wong, CEO of Hong Kong-based B K Jewellery shared his experience with Hong Kong Jewellery in the hope of raising the awareness of IPR in the trade.
The biggest lesson he learned from this case is the importance of respect for IPR, said Wong. “When I told my fellow jewellers this case, they were shocked and thought I was gutsy because the company (name undisclosed) I sued was one of the top diamond trading companies in the world,” he added.
According to Wong, they first spotted counterfeited merchandises that copied their globally-patented ‘Lady Dream’ setting in the United States. Their customers even informed them that another company was offering the same design which was claimed to be original. At first they just issued a reminder to the company but failed to receive any response. It left them with no choice but to start a civil lawsuit.
During the six years that the case lasted, the defending company had changed their lawyers repeatedly in order to delay the proceeding. The only defence was focused on invalidating the legitimacy of the global patent of ‘Lady Dream’ by downplaying the uniqueness of the design, which the judge rejected. The case finally ended in out-of-court settlement in favour of B K Jewellery. Despite the compensation, the case costed Wong’s company about US$2.5 million, not to mention the psychological turmoil they went through. “It is a lose-lose situation for both parties,” Wong commented.
As a matter of fact, it is not the first time they deal with intellectual property infringement cases. Most of the time they would not take legal actions so as not to damage the relationship with other companies. In Wong’s view, the level of awareness of IPR in the jewellery industry is low. It is not just about how to handle or avoid legal disputes but it calls for a genuine respect for others’ designs and a spirit to strive for originality, he explained. Perhaps copying is a means to short-term profits, but in the long run, only by focusing on one’s original products could a wider and further path be paved.
While creating an original, patented design requires immense input of resources, innovation is not a privilege of established companies. It could be as simple as employing a drafter to produce original designs, Wong said.
“It is the company owner’s responsibility to make sure that their products do not infringe the IPR of others. In the event of possible infringement, they should take the initiative to investigate into the matter and take responsibility for the consequences,” he continued.
When asked if he thinks a designer may unknowingly produce a work similar to an existing design, Wong ruled out the possibility because “the creator will always know whether the idea is original or ‘inspired’ by something else”. Ideally, each company should focus on developing designs and products that could constitute a distinct character and spirit of their own, which is not limited to brands. No doubt to form such a culture in the local jewellery industry will take a long time for companies to accumulate market experience and design expertise, he said.
Nevertheless, Wong frankly pointed out that efforts invested in R&D do not necessarily guarantee economic return. “It may sound illogical to focus on something that does not promise profit, but in the end it is how you could expand your business and achieve sustainable growth,” he added.
B K Jewellery’s ‘Lady Dream’ design, which now contributes to about one third of their sales, is born out of years of R&D. The design consists of nine special cut diamonds surrounding a full-cut stone to achieve the solitaire effect of a 1.5-carat diamond with less than 0.5 carats. “Sometimes an inspiration just comes into your mind, you can never be sure when it will happen,” he added.
As to how companies could protect themselves from copiers, Wong said one solution is to produce new designs regularly so that copycats could not catch up. With regard to patent and design registration, Wong suggests companies apply for patents in main markets, as global application is much more costly. While it does not necessarily fend off all copycats, it does provide an extra layer of protection for patented products.
According to the Intellectual Property Department of Hong Kong, even in the case where there is no registered design, trademark or patent, a product design (including jewellery) could still be protected against infringement of its copyright, although the term of protection enjoyed will be shorter (the maximum term of protection for registered designs is 25 years while unregistered artistic work will only enjoy copyright protection for 15 years from the date when the product is first marketed), so registration of designs could provide better protection.
For a design to be registered in Hong Kong, it should be new and has not been previously published or disclosed in Hong Kong or elsewhere. Disclosure of a design before filing an application may destroy its novelty and may consequently invalidate its registration. However, in the case of international exhibitions, the design will not lose its novelty if the application is made no later than six months after the opening of the exhibition.
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