Design rights in Europe


Alison Crofts
Dorsey & Whitney

In the quest to maximise shareholder value, ensuring the proper exploitation of a company’s asset base is key. IP rights are an increasingly important and valuable aspect of a company’s assets. An effective business strategy requires that those devising and implementing it are aware of a company’s IP rights, and understand how best to harness their potential and how to protect them.

Patents and trademarks are not the only IP rights a company may have. Recent expansion and harmonisation throughout the European Community have given the design right – historically underused – far greater potential commercial value. Any company doing business within Europe, especially one bringing new products to market, should ensure it does not miss out on the potential opportunities these changes present for enhancing its IP portfolio and adding value.

The Community design

The national design laws of the European member states have been harmonised and brought into line with Directive 98/71/EC to create a Community design.

A Community design automatically offers protection to a design across all member states, provided that the design fulfils the necessary criteria; this protection extends to any product or part of a product incorporating the design or a substantially similar design.

A Community design may be registered or unregistered. Either way, there are three essential prerequisites to obtaining and maintaining a Community design: the design must fall within the specific definition of a ‘design’, be new and have individual character.

Registered Community designs

To obtain a registered Community design, a proprietor must apply to register the design with the Office for Harmonisation in the Internal Market (OHIM) in Alicante, Spain, which processes and administers the application. OHIM takes around three months and quotes a fee of €350 to register one design. OHIM will conduct an examination to ensure compliance with certain formalities, but will not look at whether a design is new or has individual character.

A registered Community design provides the proprietor with an exclusive right to prevent infringement across the European Community. A single registration will give protection for an initial term of five years, capable of renewal for up to four further five-year periods – 25 years in total – on payment of renewal fees.

Proprietors can register several designs under a single application as long as they fall within the same class of the International Classification for Industrial Designs. A proprietor that has made a multiple registration will be able to treat each design as an individual right for licensing and infringement purposes.

Unregistered Community designs

An unregistered Community design right arises automatically. Provided the design satisfies the relevant criteria, there is no need to register the design or to notify OHIM for the right to accrue. The right confers protection on the design for a limited period of three years. There is no scope for renewal.

Where a new design is created in the European Community, any drawings, prototypes or other production evidence should be signed and dated by the author.

What constitutes a design?

A ‘design’ is defined as “the appearance of the whole or a part of a product resulting from the features of, in particular, the lines, contours, colours, shape, texture or materials of the product or its ornamentation”.

Almost every company will have created or will use some form of design capable of falling within this definition, which is very broad and now includes logos, graphic symbols and icons (more traditionally capable of protection as trademarks). The protection has widened from attaching to the product itself to attaching to the appearance or design incorporated into any product, and can apply to a whole product or to a part or feature of a product. The categories of product have also been extended to include any industrial or handicraft item and to include packaging and get-up.

Is it new?

For registered Community designs, to be ‘new’, the design must not have been made available to the public anywhere in the world (not just the European Community) prior to the date on which the application for registration was filed, unless the disclosure was made under confidentiality obligations. Being made available to the public includes the design being published or used in other products, exhibited or disclosed in some other way. For unregistered Community designs, to be novel the design must not have been made available to the public anywhere in the world before the date on which the design was first made available to the public by the proprietor.

However, registered Community designs are now subject to a grace period of 12 months from earliest disclosure to the public to application. Disclosure of the design to the public within this grace period will not preclude the design from being capable of registration. This is particularly helpful where a proprietor wants to trial a product or a design publicly or to exhibit it, to test its commercial market or viability prior to filing an application and incurring that expense.

Does it have individual character?

A design has ‘individual character’ if the overall impression it creates on the informed user is, in essence, that he or she has not seen it all before; that is, the impression created by this design or product differs from the overall impression produced on such a user by any design which has been made available to the public. In assessing the character, the extent to which the designer had free rein will be considered. Those features of a product which are dictated solely by the product’s technical function or which need to fit with other component parts cannot be considered designs capable of protection; but equally if those parameters leave little scope for individuality or significant difference between designs, the degree of individual character required for the design to pass the test will be lower. Aesthetic considerations and ‘eye appeal’ are no longer relevant; nor does the design have to be capable of industrial application.

Advantages of a registered Community design

There are certainly advantages to having a registered Community design rather than an unregistered Community design, particularly where the design is intended to have a degree of longevity or is to be market tested before being used or marketed. A registered Community design gives protection to the design for up to 25 years compared to three years for an unregistered design, and a registered design has the benefit of the 12-month grace period for public disclosure before an application is made.

A registered Community design gives an exclusive right, across all member states, in relation to infringement. An unregistered design merely gives a right to prevent copying and, as there is no registration requirement, is harder to police and defend. So if a third party has conceived of an identical design acting independently, it will not have infringed the design as there has been no copying of it.

A registered Community design has advantages over national protection schemes as it allows for one Europe-wide system of application with a central administrative body (OHIM), with filings at a designated cost and in a single language. It is also important to bear in mind that it is the design which is capable of registration, so it is no longer necessary to make separate registrations for each product to which the design will be applied. There is also the possibility of filing several designs under one application and of filing the application but deferring publication for up to 30 months to avoid disclosure to competitors.

In relation to both registered and unregistered Community designs, when it comes to infringement there is a degree of latitude in selecting the forum in which to bring an action, with pan-European enforcement and protection measures available, including interim injunctive relief.

Protection

To be fully effective, any strategy that seeks to exploit the opportunities offered by the wider scope of these design rights should also provide for taking measures to protect them.

Each member state has designated a specialist court to hear cases relating to Community designs. The Community design court in any given member state has jurisdiction over infringing actions anywhere in the European Community and may grant interim injunctions, damages, delivery up and other protective measures in any other member state. Mattel took advantage of these provisions in successfully obtaining damages and a pan-European injunction from the English courts for infringement of its unregistered Community design in a new range of Barbie dolls – Mattel Inc v Woolbro (Distributors) Limited (October 24 2003).

Jurisdiction is determined by reference to domicile or establishment within the European Community; failing that, the Spanish courts will take jurisdiction (as the domicile of OHIM). However, the rules offer some scope for (legitimate) forum shopping. Considerations for the claimant as to which jurisdiction to seek to invoke will include the cost of proceedings in that jurisdiction, the ability to recover legal costs if successful, speed of action and whether one member state’s design court appears to be more favourable to design right proprietors than another. Claimants will need to select a court with the right kind of experience in relevant issues and may want to avoid a court on the basis of how it has dealt with similar cases.

An infringement action can still be brought in the civil courts of the member state in which the infringement is committed or threatened. This may seem attractive – but one note of caution, when considering what action to be taken and where, is that this type of infringement action will be limited to the particular member state, and if other member states are involved additional actions will need to be filed in those countries. Member states will continue to offer national protection – for example, in Germany, certain classes of products are protected through the Unfair Competition Law Act, which protects designs with competitive originality. Third parties are prohibited from taking advantage of a reputation built up in another’s design or design confusingly similar to another’s design.

In the United Kingdom, design protection is available in a number of overlapping guises. An artistic design capable of being used in an industrial application may benefit from a maximum of 25 years’ protection as a registered design. If a registration is not obtained, a design owner may still be able to rely on national copyright laws to obtain a maximum of 70 years’ protection or an unregistered design right which lasts for 10 years from the end of the first year of exploitation. The latter is considerably longer than the three years on offer to an unregistered Community design. Therefore, some local actions and forms of protection are likely to continue to hold value.

Community designs offer greater protection for design rights than used to exist. This is starkly illustrated by a recent decision of the English courts – Oakley Inc v Animal Ltd [2006] EWHC 210 Ch (February 17 2006), a cautionary tale on the transition between design law before and after implementation of Directive 98/71/EC. In September 2002 Oakley started an action for infringement of three registered designs for sunglasses. The design which was most commercial had been published in the United Kingdom one month before Oakley applied to register the design. This, under the then current law, meant the design was invalid. Just before trial the new directive, with its grace period on disclosure before an application is filed, came into force. Oakley argued that the new law should apply, which would have made the design valid. The court took the view that the relevant old law should be maintained for validity purposes and Oakley’s argument failed.

Conclusion

In assessing and reviewing a company’s portfolio and developing strategies for the protection of IP rights, the full range of assets and options must be considered, but the previously humble design right ought now to feature a little more prominently within that programme.

Community designs are not a replacement for other Community rights and national protection, but their existence can add value to a qualifying design, and can allow that value to be more readily quantified and exploited across an expanding European market in a relatively inexpensive and cost-effective manner.

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