Design rights, registered designs and uncertainty

European design law considers the novelty and character of a design by observing prior designs. Prior designs are to be disregarded, if it could have become reasonably known in the normal course of business to the circles specialised in the sector concerned operating within the European Union within the meaning of Article 11(2) of Council Regulation (EC) No 6/2002. This case causes ambiguity on what does and does not, on the facts, amount to a disclosure which is sufficient to become known.

The claimant, Münchener Boulevard Möbel Joseph Duna GmbH (M), and the defendant, Gautzsch Großhandel GmbH & Co KG (G), traded in garden furniture. M designed and marketed gazebos in Germany. G then began marketing its own gazebo. M claimed, inter alia, that G’s gazebo was a copy of their design exhibited in their product brochures which had been distributed to the sector’s largest furniture and garden furniture retailers. M brought an action for infringement against G before the Regional Court in Düsseldorf, claiming the protection afforded to unregistered Community designs under Regulation (EC) No 6/2002. Additionally M sought further orders against G, specifically that they: ceased to use the gazebos in question; surrendered the infringing products; disclosed information relating to their activities; and a requirement to pay compensation for any damage resulting from those activities. G opposed the action. They contended that their gazebo had been made by a Chinese manufacture, presented to European customers in showrooms in China and that a Belgian company had received a model. G argued that M’s rights to unregistered design protection had become extinct over time and subsequently their right to bring an action was time-barred.

Following numerous appeals G appealed to the Federal Court of Justice (Bundesgerichtshof) which in turn referred to the European Court of Justice (ECJ) questions on the interpretation of articles 7(1), 11(2), 19(2) and 89(1)(a) and (d) of Council Regulation (EC) No 6/2002. The ECJ made the following observations.

• An unregistered design could reasonably have become known in the normal course of business to the “circles specialised in the sector concerned” operating within the European Union, within the meaning of article 11(2) of Council Regulation (EC) No 6/2002, if images of the design were distributed to traders operating in that sector. Thus, depending on the facts, distribution of images of a design could amount to disclosure and seeing the real thing was not a requirement.
• An unregistered design might not reasonably have become known in the normal course of business to the circles specialised in the sector concerned, operating within the European Union, even though it was disclosed to third parties without any explicit or implicit conditions of confidentiality if it had been made available to only one undertaking in that sector or had been presented only in the showrooms of an undertaking outside the European Union within the meaning of article 7(1) of the Regulation.
• It was the holder of the protected design had the burden of proving that the contested use resulted from copying their design under Article 19(2). Although, where a Community Design Court finds that this evidence was likely to prove unfeasible or difficult to produce, to ensure observance of the principle of effectiveness, it was possible to use procedures available to it under national law including rules which provided for the burden of proof to be adjusted.
• The defences of extinction of rights over time and an action of time-barring could be raised against an action brought on the basis of articles 19(2) and 89(1)(a) according to national law, which had to be applied in a manner that observed the principles of equivalence and effectiveness
• When considering sanctions in actions for infringement under article 89(1)(d)  claims for the destruction of infringing products were governed by the law of the member state in which the infringing acts had been committed. Compensation for damage resulting from such activities was to be determined based of the extent of damage and evidence of such by the national law of the court hearing the proceedings.

This decision could create uncertainty and increase the willingness to fight a case on novelty and individual character because it opens a range of arguments on what would and would not amount to a disclosure which is sufficient to become known. Even though Community design law provides a 12 month period for disclosure of a design before the opportunity to obtain registered protection is lost, self-destruction remains a possibility through disclosure of similar designs. It should therefore be noted that disclosure should be made contrary to obligations of confidentiality to prevent this. Furthermore, designers should consider registration of their design prior to placing their product on the market.

Rachel Pellatt