Ipr In Valuation Of Industrial Design Ip.
1. Introduction
Industrial designs refer to the aesthetic or visual features of a product, including:
Shape
Configuration
Pattern
Ornamentation
Industrial design protection is a form of intellectual property right (IPR) aimed at safeguarding the appearance of a product, rather than its functional or technical aspects.
Valuation of industrial design IP involves determining the monetary value of the design, typically for:
Licensing agreements
Mergers and acquisitions
Collateral for financing
Royalty calculation
Litigation and infringement damages
Valuation methods often include:
Cost-based approach: Investment made in design creation
Market-based approach: Price paid for similar designs in the market
Income-based approach: Projected revenue or cost savings attributable to the design
2. Legal Framework for Industrial Design IPR
India: Designs Act, 2000
USA: 35 U.S.C. § 171 (Design patents)
Europe: Community Design Regulation
Key features for valuation:
Registration status: Registered designs have higher value
Scope of protection: Wider protection increases commercial potential
Market demand: Influence revenue-based valuation
3. Case Law Analysis – Valuation and Enforcement of Industrial Design IP
Case 1: Apple Inc. v. Samsung Electronics Co. (2012, USA)
Facts:
Apple sued Samsung for infringement of iPhone design patents and trade dress (shape, icons, front face).
Legal Issue:
Valuation of damages for infringement of industrial designs.
Judgment:
Jury awarded Apple $1.05 billion initially for design and utility patent infringement.
Court emphasized that design patents can be valued based on the total profit attributable to the infringing design, not just manufacturing cost.
Valuation Insight:
Highlights “total profit approach” where the value of the design IP is assessed by considering the revenue impact on infringer and market significance.
Case 2: L.A. Gear, Inc. v. Thom McAn Shoe Co. (1989, USA)
Facts:
L.A. Gear sued Thom McAn for copying sneaker designs.
Legal Issue:
How to quantify damages for industrial design infringement.
Judgment:
Court allowed recovery based on lost profits, reasonable royalties, and price erosion due to design copying.
Valuation Insight:
Introduces the income-based approach, linking IP value to commercial advantage and profitability.
Case 3: Kohler Co. v. Moen Inc. (1990, USA)
Facts:
Kohler alleged Moen copied its faucet designs.
Legal Issue:
Determining monetary value of industrial design in damages.
Judgment:
Court considered market surveys, licensing agreements, and consumer perception to quantify design value.
Valuation Insight:
External market factors and licensing benchmarks play a key role in design IP valuation.
Case 4: Peugeot Citroën Automobiles SA v. Krieger (2014, Europe)
Facts:
Dispute over the design of car dashboards.
Legal Issue:
Monetary compensation for industrial design infringement in Europe.
Judgment:
Court emphasized economic value of design as differentiator in competitive market.
Damages included projected lost sales due to design imitation.
Valuation Insight:
Shows relevance of market share and product differentiation in valuing industrial design IP.
Case 5: Indian Case – Bajaj Auto Ltd. v. TVS Motor Company (2010, India)
Facts:
Bajaj claimed TVS copied the design of Pulsar motorcycle tank.
Legal Issue:
Assessing infringement and damages under Indian Designs Act.
Judgment:
Court noted the design was registered and distinctive, making TVS liable.
Compensation assessed using license fee analogy: what a willing licensee would pay.
Valuation Insight:
Registration status boosts valuation.
Hypothetical licensing fees provide a practical basis for assessing design IP value.
Case 6: Steelcase Inc. v. Haworth, Inc. (2000, USA)
Facts:
Dispute over office furniture design.
Legal Issue:
Valuation of design IP for damages.
Judgment:
Court adopted combination of market-based and income-based valuation, considering design’s role in customer preference.
Valuation Insight:
Multi-factor valuation improves accuracy for industrial design IP.
4. Methods of Valuation Illustrated by Case Laws
| Method | Case Reference | Key Takeaways |
|---|---|---|
| Income-Based | L.A. Gear v. Thom McAn | Value linked to lost profits and market impact |
| Market-Based | Steelcase v. Haworth | Comparative sales/licensing data used |
| Cost-Based | Kohler v. Moen | Original cost of design creation considered |
| License-Based | Bajaj Auto v. TVS | Hypothetical royalties for fair valuation |
| Profit Attribution | Apple v. Samsung | Total profits attributable to the design |
5. Challenges in Valuation of Industrial Design IP
Quantifying aesthetic contribution – difficult to assign monetary value to appearance alone.
Separating design from functionality – valuation must isolate aesthetic advantage.
Market volatility – popularity trends affect valuation.
Cross-border enforcement – different laws affect compensation.
Joint ownership or collaborations – complicates licensing and revenue calculation.
6. Best Practices for Corporate and Legal Valuation
Maintain registered design portfolios
Track licensing and royalty agreements
Conduct market research for consumer preference
Use multi-method valuation (cost, market, income)
Include risk-adjusted future revenue projections
7. Conclusion
Valuation of industrial design IP is critical for corporate strategy, licensing, mergers, and litigation. Case laws demonstrate that courts consider:
Revenue impact
Licensing potential
Market differentiation
Registration status
Consumer perception
An effective valuation integrates legal, commercial, and economic factors to assign a reliable monetary value to industrial design IP.
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