Important - The information in this article is provided subject to the disclaimer. The law may have changed since first publication and the reader is cautioned accordingly.
On the 24 September 1998, the Council of Ministers finally approved the joint text of the European Parliament and Council Directive for the legal protection of designs. This approval brings to a conclusion the five year long passage of the EC Designs Directive which was originally proposed by the European Commission back in 1993. The Directive was published in the Official Journal of the European Communities on 28 October 1998, and Member States are now required to bring into force laws necessary to comply with the directive not later than three years from this date, ie by 28 October 2001.
Background to the Directive
The primary purpose of the Designs Directive was, in accordance with general principles of EC law, to harmonise the law in member states with respect to the protection of designs in order to allow the free movement of such goods and hence ensure fair competition. In practice, however, the major hurdle to be overcome was the scope of protection to be granted with respect to spare parts for use in the repair of larger articles, particularly vehicles. The important political concerns regarding the protection of such spare parts were identified and highlighted by the European Parliament back in 1995, at the draft Directive's first reading.
At this time the European Parliament proposed a compromise "repair clause" which would enable third parties, such as independent spare parts manufacturers, to make use of a design for the purpose of repairing a larger item, such as a vehicle, on payment of a fair and reasonable amount by way of compensation to the vehicle manufacturer. It was not until June 1997 that a Common Position was adopted by the Council of Ministers in response to Parliament's proposals. However, Council rejected the "repairs clause" which had been proposed by the European Parliament in favour of what has been referred to a "free for all" clause allowing member states to deal with the issue of protection of spare parts under their own national law, for the time being.
Parliament were not willing to agree to Council's proposals and at the Directive's second reading, in October 1997, Parliament adopted 11 amendments to the common position adopted by Council. Not surprisingly, the most contentious amendments related to the "repair clause", which they proposed should be re-introduced. Council subsequently confirmed that they would not be able to accept all Parliament's amendments and therefore the formal Conciliation procedure was enabled in order to progress the draft Directive from this stalemate position.
The Agreed Text
The joint Parliament and Council Conciliation Committee met twice in June 1998. However, during the course of the conciliation process, it became clear that the "repairs clause" proposed by Parliament was doomed given the outright opposition of the Council to design protection based on the principle of compensation payable to the design right proprietor. Accordingly, whilst it was therefore going to be impossible to harmonise the law in respect of spare parts at this time, the delegation were concerned that the current legal position in Member States should at least be preserved. The compromise that was reached was based on a narrowing of Council's proposed "free for all" clause in order to create a temporary freeze of national laws relating to the design protection granted for such spare parts. Therefore, under the agreed provision (known as the "standstill plus"), Member States must maintain their present laws as they relate to the protection of such designs, although they are allowed to change their laws in this area insofar as such changes liberalise the market for such spare parts.
This temporary provision will remain in force until 2005 when the Commission is required to produce a new proposal to deal with harmonisation in this particular area. In the meantime, a consultation exercise will be coordinated by the Commission to involve the manufacturers of such "complex products" and their spare parts, in order to reach voluntary agreement on this issue.
In practice, whilst it is disappointing that the issue of protection of designs for spare parts is not dealt with conclusively in the new Directive, it should be remembered that the Directive does harmonise various important provisions relating to, for example, the definition of a design, the scope of protection to be granted and the term of protection of such design rights (which shall be one or more periods of five years from the date of filing, up to a total term of 25 years). A further important provision provides for a twelve month grace period prior to the filing of an application. This is intended to allow designers the opportunity to assess the commercial viability of their products since disclosure during this twelve month period cannot subsequently be raised to invalidate the registration. However, it is worth pointing out that this Directive only deals with registered design rights and does not affect any unregistered design right or copyright protection provisions that exist in Member States.
Given that many industries are unconcerned with the issue of spare parts and the debate that surrounds the protection to be granted to them, it is beneficial that the Directive has not been terminally affected by this issue. It is now up to those parties who are interested in the spare parts issue, notably those in the vehicle industry, to accept the invitation of the European Commission to thrash out their differences and reach an agreeable solution.
Additionally, now that this Directive has reached the end of its course, it may be possible for the Commission to resurrect the proposed legislation to deal with the creation of a unitary registered design right.