Litigating design disputes

Introduction

Designs are relevant to a wide range of products belonging to industry, fashion and crafts. As a result, counterfeiting no longer affects only trademarks, but is now increasingly affecting designs as well.

At EU level, design protection is governed by EU Regulation 6/2002 on Community Designs. The regulation, which applies directly to all 28 member states, provides Community-wide protection for all kinds of industrial design consisting of registered and unregistered designs.

Main procedures involving Community design rights

Competence

The regulation provides a two-tier competence depending on the type of procedure followed – or, in other words, on the intended goal of the party which initiates the procedure.

If the intended aim is the declaration of invalidity of registered Community designs, the EU Intellectual Property Office (EUIPO) has exclusive competence. The interested party can therefore file a design invalidity application with the EUIPO.

If the intended goal is the declaration of invalidity of an unregistered Community design or the infringement of a Community design, the national courts of the member states have exclusive competence. In such cases, an action must be brought before the national court which has been designated by the single member states according to the regulation for such purpose.

The specialist courts have exclusive competence for:

• Infringement actions and, when allowed by national legislation, actions concerning a threat of infringement of Community designs;
• actions to ascertain that no infringement of the Community design has occurred (negative declaratory judgment) when allowed by national law;
• invalidity actions regarding unregistered Community designs, since unregistered Community designs, unlike registered designs, need not be annulled and cancelled from the registry, this kind of action is rare and usually occurs in the form of negative declaratory judgments or as counterclaims in infringement proceedings; and
• invalidity counterclaims regarding Community designs proposed in proceedings.

Consequently, the specific procedural law and the cost of such proceedings depend on the respective place of jurisdiction.

According to Article 82 of the regulation, actions may be brought in the courts of the member state in which the defendant is domiciled or has a plant or, if neither apply, in which the plaintiff is domiciled or has a plant.

According to Article 82(5), infringement proceedings may also be brought in the courts of the member state in which the act of infringement was committed or threatened.

This provision opened the door to so-called ‘forum shopping’, namely the selection of the most favourable forum. In this regard, it must be kept in mind that some of the penalties that a Community design court can order in respect of design infringement (eg, damages, costs orders and destruction of the infringing goods) depend on the national law of the member state in which the act of infringement has occurred. Which national law applies is never a straightforward question where the IP infringement is online and the website is accessible in multiple countries of the European Union. In Cases C-24/16 and C-25/16, the European Court of Justice has given some helpful guidance and stated that the relevant national law would be the place where the process of putting the offer for sale online by the operator of the website was activated.

Invalidity of registered Community designs

To request the invalidity of a registered Community design the interested party must file a design invalidity application with the EUIPO. Where the contested Community designs are part of a multiple registration, each one must be contested individually and identified by reference to their full registration number.

Moreover, it should be kept in mind that a Community design can also be invalidated after it has expired or has been renounced.

Invalidity grounds: Apart from some exceptions, any interested party may file an invalidity request against a registered Community design with the EUIPO.

The application must be based on the following grounds:

• The design lacks the requirements of novelty and/or individual character – the application must contain a representation of the earlier design that could form an obstacle to the novelty or individual character of the contested Community design, as well as documents proving the disclosure of the earlier design.
• The design does not correspond to the definition under Article 3(a) of the regulation – this would be the case where the views of the Community design are inconsistent and represent different products or where the graphical representation consists of mere representations of nature (eg, landscapes, fruits or animals) that are not products within the meaning of Article 3(1)(b).
• The appearance of the design has been dictated solely by its technical function.
• The owner does not have the right to the Community design or the holder of the design registration is not the real designer – the application must contain particulars showing that the applicant is entitled to the contested Community design by virtue of a court decision.
• The design is contrary to public policy or morality.
• The design has been disclosed to the public after the filing date of the application for registration, or after the priority date of the Community design if priority is claimed, and which is protected starting from a prior date by means of registration of a Community design or by an application for registration of said design, or by the registration of a design in a member state, or an application to obtain the relative right – the application must contain a representation and particulars identifying the prior design, as well as evidence proving that the applicant is the holder of the prior design as grounds for invalidity.
• A design contains a prior distinctive sign and the law of the European Union or law of the member state governing that sign confers on the holder the right to prohibit such use – the application must contain a representation and particulars of the distinctive sign and evidence proving that the applicant is the holder of the earlier right in question.
• The design constitutes an unauthorised use of a work protected under the copyright law of a member state – the application must contain a representation and particulars of the work protected by copyright and evidence proving that the applicant is the holder of the earlier right in question.
• The design constitutes an abusive use of the emblems listed in Article 6ter of the Paris Convention for the protection of intellectual property – the application must contain a representation and particulars of the relevant item and particulars showing that the application is filed by the person or entity affected by the improper use.
• According to a legal decision, the owner does not have the right on the Community design – this ground can be invoked only by the design owner.

The application for invalidity filed before the EUIPO Invalidity Division must include the indication of one of the aforementioned grounds together with a reasoned statement presenting the facts, evidence and arguments in support of those grounds. The EUIPO provides a specific form, which may be used for filing the invalidity application. The use thereof is not obligatory but is highly recommended in order to avoid deficiencies which could exclude the application’s admissibility.

Participation in invalidation proceedings of alleged infringer: Until a decision has been issued on the application for invalidity, any third person who provides proof of having been summoned in a case for infringement of the same design can participate in the invalidity proceedings, provided that he or she presents a request to do so within three months of the date on which the application for invalidity was filed.

The same applies for any third person who provides proof that the owner of the Community design has requested him or her to cease the actions of alleged infringement of the design, and proof that the third person asked a court to declare that such actions do not constitute an infringement of the Community design.

Procedure and decision: The invalidity proceedings before the EUIPO are written procedures. The parties may also request an oral hearing, which the EUIPO may grant at its discretion.

The invalidity of the Community design may be pronounced for all or part of the design and has retroactive character as to the design application filing date or the date on which the right came into force.

In the event of a decision declaring the partial invalidity of a Community design, the protection will be maintained for the modified design. After publication of the declaration of invalidity of the Community design, the effects of the invalidity extend to the entire European Union.

As a general rule, the losing party bears the costs of the invalidity procedure.

The declaration of invalidity may be appealed before the EUIPO’s Board of Appeal, which may render a final decision or remit the case for further prosecution to the EUIPO’s Invalidity Division.

Infringement proceedings

The infringement of (registered or unregistered) Community designs can be enforced before the specialist Community design courts of the member states, provided that the designs present the necessary protection requirements (novelty and individual character).

Infringement test: Before bringing an infringement action to court, the rights holder should verify whether the alleged infringing product does or does not “produce on the informed user a different overall impression” (so-called ‘infringement test’).

The Community Design Regulation does not provide a definition for the term ‘informed user’. According to case law, the concept of the informed user “must be understood as lying somewhere between that of the average consumer, applicable in trademark matters, who need not have any specific knowledge and who, as a rule, makes no direct comparison between the trademarks in conflict, and the sectoral expert, who is an expert with detailed technical expertise. Thus, the concept of the informed user may be understood as referring, not to a user of average attention, but to a particularly observant one, either because of his personal experience or his extensive knowledge of the sector in question.” (20 October 2011, C-281/10 P, Metal wrappers, EU:C:2011:679).

Scope of protection of Community designs: Regarding the rights conferred by designs, a distinction must be made between registered and unregistered Community designs.

A registered Community design confers the exclusive right to:

• use any design for which the overall impression produced on the informed user, considering the degree of freedom of the designer, is the same as that produced by the protected design; and
• prevent any third party from using the same without the rights holder’s consent.

The use comprises a range of actions (eg, the creation, offer, marketing, import, export and stocking of a product incorporating the identical protected design or creating the same overall impression).

The unregistered Community design confers on its holder the right to prevent any third party from using a copy of the protected design.

The use cannot be contested if it is the result of an independent work of creativity made by an inventor who, it might be reasonably assumed, did not know the design disclosed by the holder.

This important difference between registered and unregistered Community designs explains why the enforcement of the registered design, which does not require the proof of copying having taken place, is often easier than the enforcement of the unregistered design.

Presumption of validity of registered Community designs: A further advantage of the registered design over the unregistered Community design is the presumption of validity of the registered right. According to Article 85 of the regulation, as long as the registered Community design has not been invalidated (as a consequence of the invalidity declaration) and the court is obliged to consider the design as valid, and provided that the plaintiff has presented proof of the existing design registration (registration certificate and proof of the payment of the maintenance fees). Apart from a separate invalidity application before the EUIPO, the defendant in the infringement proceedings can contest the validity by filing an invalidity counterclaim. Instead of deciding itself on the counterclaim, on request of the plaintiff, the court may stay the proceedings and oblige the defendant to file the invalidity application with the EUIPO within a determined time limit. If the application is not made within the time limit, the proceedings continue and the counterclaim is deemed withdrawn.

An invalidity counterclaim is not admissible if there is a final decision by the EUIPO regarding the same subject matter.

Apart from the counterclaim, the defendant can defend himself or herself by presenting a plea based on the argument that the registered Community design could be declared invalid on account of the defendant’s earlier national design right, within the meaning of Article 25(1)(d).

In contrast, in infringement proceedings based on unregistered Community designs the special court considers the Community design valid only if the owner of the unregistered Community design demonstrates that it meets all the requirements for design protection, namely that the design was novel and possessed an individual character on the date on which it was disclosed to the public for the first time.

Penalties in infringement actions: The plaintiff may request the following orders set down by Article 89 of the regulation and the law of the member state in which the acts of infringement or threatened infringement are committed:

• an order prohibiting the defendant from proceeding with the acts which have infringed or would infringe the Community design (so-called ‘injunctive relief’) – since Community designs have equal effect throughout the European Union due to their unitary character, the injunctive relief applies, as a rule, to the entire territory of the European Union;
• an order to seize the infringing products or, if provided for by the applicable national law, to destroy the infringing products;
• an order to seize materials and implements predominantly used in order to manufacture the infringing goods, if the owner knew the effect for which such use was intended or if such effect would have been obvious in the circumstances;
• an order for detailed information and rendering of account regarding the infringing activities (eg, account of sales and profits), if provided for by the applicable national law; and
• an order for damages, if provided for by the applicable national law (punitive damages are not awarded).