Registered Community design: unregistered exclusive licence

02 August 2016

Audrey Horton

The European Court of Justice (ECJ) has held that an exclusive licensee could bring proceedings for infringement of a registered Community design (RCD), even though the licence had not been registered.

Background

Licences of RCDs only have effect as against third parties after entry in the Community designs register. Before registration, those acts have effect on third parties who have acquired rights in the RCD after the date of that act but who knew of the act at the date on which the rights were acquired (Article 33(2), Community Designs Regulation (6/2002/EC)) (2002 Regulation) (Article 33(2)).

A licensee may intervene in an infringement action brought by the rights holder for the purpose of obtaining damages for its losses (Article 32(4), 2002 Regulation) (Article 32(4)).

In Youssef Hassan v Breiding Vertriebsgesellschaft mbH, the ECJ held that a licensee of an EU trade mark was not prevented from bringing an action for infringement even though the licence was unregistered (C 163/15).

Facts

G was the exclusive licensee in Germany for an RCD for laundry balls. The licence was not entered on the register of Community designs. Following G’s letter before action, T gave undertakings to stop selling balls which infringed the RCD.

The German court held that G was entitled to bring the action for damages in its own name. T appealed, arguing that G was not entitled to bring claims arising from the RCD.

The German court referred to the ECJ the question of whether G could bring infringement proceedings as licensee where the licence had not been registered.

Decision

The ECJ held that Article 33(2) was intended to protect a person who had rights in an RCD as an object of property, and therefore did not apply to a situation where the licensee of an RCD complained that a third party had infringed the rights conferred by the RCD. So it did not prevent a licensee from bringing proceedings for infringement of an RCD that was the subject of a licence that had not been registered.

A Community design licensee can also claim damages for its own loss in infringement proceedings brought by it in accordance with Article 32(3), which allows a licensee to bring infringement proceedings itself with the rights holder’s consent, or, in the case of an exclusive licence, where the rights holder fails to bring infringement proceedings within an appropriate period of having been given notice to do so. While a licensee could intervene in an action brought by the rights holder as provided for in Article 32(4), nothing prevented G from also seeking damages for its own losses where it brought the infringement proceedings itself under Article 32(3).

Comment

A similar conclusion regarding the effect of failure to register was reached in Youssef Hassan. However, it remains advisable for licensees of RCDs to protect themselves by registering against the grant of further licences or the sale of the RCD by the owner, or other conflicting interests.  Licensees continue to need the consent of the RCD owner before they can bring infringement proceedings, although an exclusive licensee can commence proceedings if the owner does not do so within an appropriate period after giving notice.

Case: Thomas Philipps GmbH & Co KG v Grüne Welle Vertriebs GmbH, C-419/15.

First published in the August 2016 issue of PLC Magazine and reproduced with the kind permission of the publishers. Subscription enquiries 020 7202 1200.

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