Harmonised National Registered Design Right

07 December 2006

UK

1.1 Oakley v Animal [2005] EWCA Civ 1191

The case of Oakley Inc. v Animal Limited began as an ostensibly simple dispute concerning the Registered Designs Regulations 2001, but assumed such constitutional importance that the Secretary of State was joined to the proceedings (represented by the UK Attorney General himself).

The Regulations implemented Community Directive EC 98/71, providing for a harmonised law relating to registered designs across the Member States. It was incorporated into UK law by way of s2(2) European Communities Act 1972 which gives ministers the power to make regulations for the purpose of implementing Community laws. When transposing its provisions into national law, the Directive gave Member States an option to derogate and retain in force existing legislation on validity for all designs already registered under such legislation. The UK utilised this option so that all existing designs filed before 9 December 2001 would continue to be subject to the old law.

Oakley was the owner of a registered design for sunglasses which was registered before 9 December 2001 and so, according to the Regulations, was subject to the old law. Oakley attempted to assert its registered design rights against Animal, but discovered it had published one of the designs a month before it had been registered. Under the old law the design would be rendered invalid due to lack of novelty, but the new Regulations contained provisions which allowed a one year grace period where prior use of a design by its owners would not destroy the element of novelty. Oakley argued that the Article in the 2001 Regulations which maintained the old law for designs registered before December 2001 was ultra vires, since it amounted to a policy decision rather than an obligation required when implementing the Directive. As such it should have been made by way of primary legislation approved by Parliament, rather than by secondary legislation drawn up by the Secretary of State.

The Judge at first instance found in favour of Oakley, but his decision was overturned by the Court of Appeal. The Court of Appeal noted that the vast majority of Directives contained a discretionary element, and that it would be absurd if none of them could be implemented without an Act of Parliament. The Court of Appeal therefore ruled that the exercise of discretion was necessary for the purpose of implementing the Directive. The old UK law on validity therefore applies to national registered designs registered before 9 December 2001.

1.2 Woodhouse v Architectural Lighting Systems [2005] EWPCC (Des 25)

Woodhouse brought proceedings against the Defendants for the infringement of the registered design of an electrical lantern from its “Geo” range of street furniture. The range was comprised of units designed by different firms, on commission by Woodhouse. A company called Lifschutz Davidson designed the majority of the range, but the lantern relevant to the case had been designed by Creactive Design Ltd. When it came to register the designs, the entire Geo range was deliberately registered in the name of Lifschutz for reasons of ‘expediency and convenience’. Lifschutz then purported to assign the design to Woodhouse.

The Defendants, Architectural Systems, counterclaimed for cancellation of the registered design on the basis that Lifschutz had made a false claim to ownership. Woodhouse submitted that since they had commissioned the lantern design, they were the equitable owner of that design and the subsequent assignment from Lifschutz had perfected the title. Judge Fysh QC held that the test of whether a party was properly claiming to be the proprietor of a registered design was an objective one and at the time of registration Lifschutz had no claim to be the proprietor. As a consequence the assignment to Woodhouse was an empty document which had no effect and the registered design was invalid and therefore cancelled.

In case he was subsequently overruled on the validity issue, Judge Fysh also went on to consider whether there had been registered design infringement. The design consisted of a distinctive lantern, together with a more mundane bracket by which it was attached to a pole. Since the bracket was part of the design, Judge Fysh held that sale of a similar lantern alone did not infringe. Moreover, when the lantern was sold with an accompanying bracket, he was only prepared to find infringement where the Defendants had used a similar bracket to the one in the registered design.

1.3 UK Legislative Changes

On 1 October 2006 the Regulatory Reform (Registered Designs) Order 2006 (the “Designs Order”) and the Registered Designs Rules 2006 (the “Designs Rules”) came into effect. Their aim is to speed up and modernise the UK’s system for registering designs.

The Designs Order makes a number of substantial amendments to the Registered Designs Act 1949. Notably it provides for the abolition of examining new applications for novelty and individual character, and the Designs Registry will no longer compare applications with earlier design registrations to identify any conflicts. The order also allows for multiple designs for different types of product to be covered in a single application. If any of the individual applications are refused, it will not affect the admissibility of the remaining applications. There are further provisions which remove the restrictions on inspecting certain registered designs, and alter the provisions regarding the restoration of lapsed designs.

The Designs Rules update and simplify the forms required for registered design applications and also make it compulsory that the registrar publishes new designs in the journal (although applicants have an opportunity to defer publication for up to 12 months). A new electronic journal has been launched to complement the new system.

The Netherlands

1.4 Lederhose (President in interlocutory proceedings District Court Almelo, 1 June 2006, LJN: AX6495)

In the run up to the Fifa World Cup 2006 a large amount of merchandise appeared on the Dutch market including a traditional German garment, the so called ‘lederhose’ (literally: leather trousers), which was registered in the colour orange as a Benelux national registered design. The Court considered that since this is a traditional garment, the design cannot be regarded as new. Furthermore, the Court decided that filing a registration for this garment in the colour orange did not give a distinctive character to the article. This is because the colour orange had been used for decades by the Dutch team and its supporters. For those reasons the Court considered that the design of the orange ‘lederhose’ was therefore likely to be invalid.

France

1.5 Jeantet v Slymag Super U (4 July 2006)

The French Supreme Court (“Cour de Cassation”) gave a decision confirming the Lyon Court of Appeal’s decision of 27 May 2004 on the application of the law on priority regarding drawings and design rights.

French law relating to drawings and design rights was significantly modified by the Ordinance dated 25 July 2001, in particular implementing Directive EC 98/71. The new regime applies separate validity and legal protection conditions. How should the courts apply these new legal provisions?

The holder of a French registered design in respect of used battery containers which was registered in 1997 filed a claim for infringement against a company using the same design. The owner of the rights to the purportedly infringing design was joined to the proceedings by the Defendant, and claimed that the registered design right should be held to be invalid as it was registered after the publication of the purportedly infringing design. The Court of Appeal allowed the appeal, holding that the validity of the registration of a design is to be assessed on the date at which the rights are created. It is therefore appropriate to apply the law applicable at that date (i.e. in 1997): the 2001 Ordinance only governs infringements which occur after its entry into force, and not before. This decision was contrary to a number of decisions by various French courts and has caused uncertainty as regards this issue in France. If the infringement is post-2001 but the registration pre-2001, the new law applies in order to assess the design infringement, and the old law in order to assess the validity of the design registered

Germany

1.6 Handtuchklemmen (Judgment of 24.3.2005 - I ZR 131/02, GRUR 2005, 600, 603)

The Bundesgerichtshof gave important guidance on the assessment of the subject matter and extent of the protection afforded under the harmonised German Design Act. The case involved devices into which kitchen towels are to be squeezed for the purpose of hanging them up (a “towel-squeezer”). The Claimant’s towel squeezer was the subject of a German registered design (left) whereas the Defendant started distributing similar towel squeezers (right):

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The essential question was how the predominantly utility-serving character of features (e.g. the shape of the opening into which the towels were squeezed, the bulging front part and the rectangular wall plate) influenced the scope of protection of the Claimant’s towel squeezer. The Bundesgerichtshof denied claims under unfair competition law as that does not afford protection against the adoption of design features which are state of the art and which, considering the purpose of the product, serve the solution of a technical problem. In contrast, the Bundesgerichtshof held, protection under the Design Act may be available in this case, as it is only excluded if the appearance is objectively and exclusively technically dictated. This decision highlights an important advantage of genuine design protection over unfair competition protection: due to the narrow interpretation of the exemption from design protection of features which are solely technically dictated, design rights can protect designs where unfair competition claims cannot be asserted.

1.7 Catwalk (Judgment of 23.6.2005 - I ZR 263/02, GRUR 2006, 143, 144)

In another decision the Bundesgerichtshof gave important guidance on the calculation of the amount of damages the infringer must pay following a design right infringement. The Defendant had offered for sale fake ladies’ Baume & Mercier “Catwalk” wrist watches in his catalogue. The essential issue was whether the Claimant was entitled to damages for the mere offering for sale of the infringing products in the Defendant’s catalogue in addition to damages in consequence of actual sales. Traditionally, in Germany the amount of damages recoverable in cases of IP right infringement may, at the rights holder’s discretion, be calculated on the basis of hypothetical licence fees for the infringing act. The Bundesgerichtshof decided that the mere offering of an infringing product entitles the rights holder to such hypothetical licence fees. The court reasoned that using images of the product for sales purposes constitutes an act which a “real” licensor would not have permitted without remuneration. The simple use of an image of an infringing product may be difficult to include in one of the other two methods of calculating damages: account of profits or compensation for the rights holder’s loss of profits. Therefore, this decision further increases the attractiveness of calculating damages according to the hypothetical licence fee method.