Based on the case study from our intellectual property protection practice, we explain how to secure claims concerning Community designs in the territory of the European Union and how to use EU law instruments in effective protection of product design.
LSW recently represented a Client who is one of the largest manufacturers of household appliances and consumer electronics in the world. A third party – also a manufacturer of household appliances and RTV equipment – copied the design of one of the products offered by our Client. At the same time, the Client had protection rights to Community designs which presented the design of the disputed product. Pursuant to Article 90 (1) of the Regulation of 12 December 2001 on Community designs (hereinafter: the Regulation), we filed an application for protection to the Regional Court in Warsaw, XXII Division of the Court of European Union Trade Marks and Community Designs, which, under the Regulation, is a specialised court to hear cases concerning protection rights granted by the European Union Office for Intellectual Property (EUIPO).
The Court provided security in the form of, inter alia, a ban on offering and distributing the disputed products by the infringer in the territory of the European Union, as well as in the scope of seizure of the disputed products owned by the infringer in judicial proceedings. The court of second instance upheld the security granted in its entirety. The main proceedings in the case are currently pending.
What is an industrial design and a Community design?
In the simplest terms the concept of industrial design means product design. Regulations define a design as a new and individual form of a product or a part thereof, given to it in particular by the features of lines, contours, shapes, colours, structure or material of the product and by its ornamentation. A Community design is nothing more than an industrial design registered by EUIPO and covering the whole of the European Union.
Community design registration is a very effective and, at the same time, economical solution for entrepreneurs who want to protect the design of their product with a single registration in all Member States of the European Union. In the event of infringement of Community design rights by a third party, the rights holder may apply to the competent court for protection of their designs and, at the same time, for protection of his claims against the infringer for the duration of the litigation proceedings. It is then possible to obtain a ban on, among others, distribution of the disputed goods throughout the European Union with one court decision. This is an attractive solution both financially and in terms of the short waiting period (according to Article 737 of the Code of Civil Procedure, the court has one week to consider the application for security; in practice it takes little longer).
What’s going on in this case?
In proceedings for infringement of Community design rights, the court shall examine whether the design incorporated in the infringer’s product induces an equivalent overall impression on the informed user as the right-holder’s Community designs. The overall impression shall be understood as the visual impression produced by the design as a whole. However, the case law has developed a view that an informed user is a person between an expert in a given field and a consumer. In practice, this is often the average user of the products concerned, e.g. household appliances, but it may also be a specialist in the field of i,e. hinges or other invisible door parts, for which the informed user will be their fitter.
To put it simply, if an informed user looks at the registered Community design and the infringer’s product and considers them to be identical in terms of overall impression, this means that an infringement has been committed. While in the main proceedings it is necessary to prove that the overall impression concerning the registered Community design and the product is the same, in the proceedings for protection it is sufficient only to substantiate it with certainty and to demonstrate a legitimate interest in receiving protection. Therefore, the protection procedure is undoubtedly designed in a way that is favourable to the holder of the Community design protection rights.
If the security is provided, as a rule, the court serves the decision together with the enforcement title and its copy only on the right holder, without informing the infringer about it. The court only obtains information about the security granted at the moment of its delivery by the bailiff. This is aimed, among others, at preventing the infringer from emptying their warehouses of the disputed product, which would result in the bailiff’s actions being doomed to failure in advance. It is worth mentioning that the security is effective against the infringer when he or she is served by the bailiff. The infringer may, of course, file a motion with the complaint to suspend its enforceability until the second instance court has considered the complaint under Article 396 of the Code of Civil Procedure, but the first instance court is not obliged to consider it.
Benefits for the holder
The key question that needs to be answered is: What are the real benefits for a design claimant, who applies for security?
The mere registration of a design at Community level gives us protection in all Member States of the Community. One registration = (equals) protection throughout the EU. This is an extremely fast, efficient and economical solution that offers very wide protection and enables the applicant to avoid the need for filing applications in every Member State. In simple terms, at the time of an infringement of design rights in any EU country, the right holder has the possibility to lodge a suit/application for security in principle with the Member State where the infringement took place or where the infringer is established (Article 82 in conjunction with Article 83 of the Regulation). From a protection point of view it is much better to take action against the infringer in the state where they are domiciled, because then the court has the power to give a judgment that is effective throughout the EU. In the case of a claim or security claim in a country where only the infringement takes place and the infringer is not established, the court judgment has effect only in the territory of that EU Member State.
What does a security give?
If a judgment is obtained which is effective throughout the EU in a protective procedure, the infringer (depending on the content of the application and the scope of the security issued) loses the possibility to, inter alia, distribute, advertise, offer, or de facto any activity related to the disputed products by a single court order. It is therefore a procedure that quickly provides the right holder with protection until the decision in the main proceedings is delivered. Otherwise – taking into account that proceedings at both instances last even several years – the economic rationale for further enforcement of a claim for cessation of infringements could be questionable. Moreover, the activities of the right-holder in the overwhelming majority will have to take the remedial direction instead of the preventive one. At the same time, over the next few years the damage to the right holder will increase and, what is important, their unique design may be diluted.
Dilution – what is it about?
Let us therefore make it clear that it is not only the brand, that is to say the trademark, that can be diluted. A community/industrial design may also be subject to this phenomenon. Recipients of designs embodied in products such as the shape of a Volvo XC 60 car, a Chanel ‘Boy’ handbag, a SMEG kettle and a refrigerator, a Coca Cola glass bottle or an Iphone and an Apple computer mouse buy these products because of the positive brand impressions but also because of the appearance of these items. Brands do not become attractive on their own. It takes many years of work on their recognition and building customer trust. And what is a brand, if not a product or service that hides behind it? Very often the key to the success of a brand will be the characteristic and top design found in products. An example is the above mentioned Coca Cola glass bottle, which is so characteristic that it is not necessary to attach the brand logo to it for the recipient to easily associate it with the brand.
Why protect design at all?
Once designs embodied in products authorised by others are copied (usually to create a cheaper equivalent), protected designs will cease to be associated only with branded products, which is their power of thrust, but will also be associated with competitive products. As a consequence, the economic value of the right holder’s designs – their recognition in the market – will be lost. At the same time, it will destroy the efforts of design holders, who have probably invested in the unique design and innovation of their products and their protection. Undoubtedly, the entitled parties bear significant costs of development of their designs, their advertisement and registration in relevant offices. A position allowing for unpunished copying of protected design would put the sense of design registration under question, denying them independent – in relation to the brand – protection. The real possibility of dilution of designs was also confirmed by the Court of Appeal in Warsaw in the case referred to in this article.