EEE - BRUSSELS 29. JAN 2016

Transcription

1 EEE - BRUSSELS 29. JAN 2016 Design Law Spare Parts and the Repair Clause, Germany President of CET-J, Circle of Europ TM Judges

2 Importance of the issue for economy It is a battlefield of the different economic stakeholders: Motor vehicle and other complex products industry versus Aftermarket = spare part producers Consumers.

3 Short Overview of the issue 1. The shape of a car as such or parts of it like a hood or a rear (a bonnet) etc. is in general (beside acquired distinctivenss by use) not registrable as a trademark. 2. But these shapes - spare parts of cars (products in general) may enjoy in principal protection by design law within all memberstates and at the OHIM as a Community-Design. Usually car producers are owners of those design rights and may claim for infringement if the right is violated by a producer of spare parts.

4 STATUS QUO AND BACKGROUND

5 Consultations and proposals in the 90ies in the process of harmonizing IP-law in specific creating a Design Directive

6 In the 90ies, the Commission made three proposals for harmonizing design law with a binding repair clause for all member states:

7 1993: a clear and defined limitation in time of the protection for the entire product after introduction to market. The European automobile industry rejected this proposal on the grounds that the time scope was too short to make up for the design costs. 1996: the free spare part dealers should be able to produce as soon as the original producer introduces the spare part to market, for a fair and reasonable fee. The automobile industry rejected the fee as insufficiently high. 1998: the now applicable directive entered into force

8 There is not foreseen a specific provision on a repair clause for spare parts. BUT One will find in art. 14, 18 Directive the Transitional Provision, called Freeze-In-Solution in accordance with Recital 19, 20.

9 Recital 19...Whereas the rapid adoption of this Directive has become a matter of urgency for a number of industrial sectors; whereas full-scale approximation of the laws of the Member States on the use of protected designs for the purpose of permitting the repair of a complex product so as to restore its original appearance, where the product incorporating the design or to which the design is applied constitutes a component part of a complex product upon whose appearance the protected design is dependent, cannot be introduced at the present stage;...

10 ...for this reason Member States should in the meantime maintain in force any provisions in conformity with the Treaty relating to the use of the design of a component part used for the purpose of the repair of a complex product so as to restore its original appearance, or, if they introduce any new provisions relating to such use, the purpose of these provisions should be only to liberalise the market in such parts; whereas those Member States which, on the date of entry into force of this Directive, do not provide for protection for designs of component parts are not required to introduce registration of designs for such parts;...

11 ...whereas three years after the implementation date the Commission should submit an analysis of the consequences of the provisions of this Directive for Community industry, for consumers, for competition and for the functioning of the internal market;...

12 Recital 20 of the Directive Whereas the transitional provision in Article 14 concerning the design of a component part used for the purpose of the repair of a complex product so as to restore its original appearance is in no case to be construed as constituting an obstacle to the free movement of a product which constitutes such a component part;

13 Art. 14 EC Directive 98/71 Transitional provision Until such time as amendments to this Directive are adopted on a proposal from the Commission in accordance with the provisions of Article 18, Member States shall maintain in force their existing legal provisions relating to the use of the design of a component part used for the purpose of the repair of a complex product so as to restore its original appearance and shall introduce changes to those provisions only if the purpose is to liberalise the market for such parts.

14 Art. 18 Directive Three years after the implementation date specified in Article 19, the Commission shall submit an analysis of the consequences of the provisions of this Directive for Community industry, in particular the industrial sectors which are most affected, particularly manufacturers of complex products and component parts, for consumers, for competition and for the functioning of the internal market. At the latest one year later the Commission shall propose to the European Parliament and the Council any changes to this Directive needed to complete the internal market in respect of component parts of complex products and any other changes which it considers necessary in light of its consultations with the parties most affected.

15 Due to the free market and free competition, the Commuity Design Directive (98/71) provides according to art. 14 Directive in art. 110 Regulation (6/2002) the so called repairs-clause. Therefore an infringement litigation cannot be filed against a Community Design assuming it is related to a part of a complex product and the part is dedicated to repair purposes only.

16 Regulation 6/2002, art. 110 Those spareparts which are an element of a complex product and which must match to the complex product to establish its original feature are allowed to be produced in the aftermarket. These producers do not underlay the provisions of design law.

17 According to this task new considerations of the Commission regarding the freeze in clause connected with the transitional provision were carried out

18 The Commissions proposal was based on a number of studies and research, especially focused on price comparisons and the econonomic impact generally and specifically in countries with or without a repair clause. One report concluded that in countries without a repair clause, most spare parts 10 out of 11 were significantly more expensive, by 6.4 to 10.3 %.

19 As a result, the EU commission at last proposed such a repairs clause as obligatory in the process of harmonizing design law throughout the EU in 2004, which was passed with few alterations by the EU Parliament in 2007.

20 Wording of the drafted repairs clause 1. There is no design protection for a part built into a product or design applied to it, which is a building part of a complex product and which, within the meaning of Art. 12(1) is only being used to repair the complex product and to restore its appearance. 2. Sec 1 is applicable if consumers are properly instructed about the provenance of the part being used for repair purposes by use of a sign a product of producer logo or in other suitable ways, so that they can choose in an informed fashion between the competing products for repair purposes.

21 A duty to compensate had failed in this system, since both sides were unable to agree on sums or even to name any. (Source: proposal for a directive of the European Parliament and of the Council amending Directive 98/71/EEC on legal protection of designs and models (SEC(2004) 1097).

22 Veto Due to vetos in the Council by France, Germany, Sweden, Czech Republic, Romania and Slowenia this clause not entered into force. Reasoning: The council should expand research whether such a repairs clause enhances free competition in other sectors like white-ware (home appliances), watches, furniture and should not focus only on car spare-parts. The commission withdrew its draft on 21. May 2014.

23 Status quo

24 Freeze in - solution There is no repairs clause and therefore a litigation for infringement can be filed against the aftermarket in Austria, Zyprus, Czeck Republic, Denmark, Estland, Finnland, France, Germany, Litauen, Malta, Poland, Portugal, Slowakia, Slowenia and Sweden. This clause is in force in Belgium, Hungary, Irland, Italy, Latvia, Luxemburg, Netherlands, Spain, United Kingdom, and for the Community Design.

25 Conclusion: In the latter countries car producers enjoy design protection for parts of their products, but their right is not enforceable as far as it concerns repairing purposes with an element which is a spare part of a complex product and necessary to establish the original feature of the product. In case law most of the European countries courts judge lightening rear bonnet (hood or front) bumper - wing wind screen (glass elements) as must-match elements but not wheels, in specific hubcap and wheel rim.

26 New consideration is being done by the commission revising the EU-design law. The process is under discussion. The reference FORD vs Wheeltrims from Italy addresses the above mentioned situation.

27 Two Studies are ordered by the commission

28 Result of the first study The first report s (The Economic Review of Industrial Design in Europe) result was: A repair clause is for the process of harmonization necessary, even it is not indispensable for legal reasons or has any negative consequences for free competition. The second study is not yet delivered.

29 Reference to and answer of CJEU in FORD vs Wheeltrims (C 500/14) The reference focused in its core points on overruling trademark protection by design law and its repair clause, which is provided in Italy.

30 Art. 241 of the Codice Proprieta Industriale Until EC Directive 98/71 of the European Parliament and of the Council of 13 October 1998, on the legal protection of designs and models, is modified on proposal by the Commission as set forth of Art. 18 of the same directive, the exclusive rights on components of a complex product may not be used to impede the manufacture and sale of the same components for the repair of a complex product, so as to restore the original appearance.

31 There are various different opinions in italian courts on the interpretation of art. 241 CPI Registered trade mark rights suffer no prejudice by the repairs clause The repairs clause applies only to a component part used for the purpose of the repair, but not also to optionals or to parts of the goods that does not have an obliged aspect, as car rims.

32 Further in question in Italy is the issue, if the repair clause applies only to the same model of the spare part that was installed on the original version of the sold car or it can be applied also to alternative spare parts produced by the car producer, but not installed on the original version of the sold car (e.g. special model of car rims; special model of rear-view mirrors etc.)

33 Facts of the case The company Wheeltrims is a producer of hubcaps and affixes various protected LOGOs of FORD on the hubcaps identical to the original as trademark registered Ford LOGO. Ford filed an infringement action based on its CTMs rights on the LOGOS FORD beside the design rights related to hubcaps. Wheeltrims argued: The LOGO is an ornamental part of the spare part and therefore it is necessary to fix it to establish the complex product. Insofar the repairs clause is applicable for trademarks.

34 Questions of the Tribunale di Torino 1. Is it compatible with [EU] law to interpret Article 14 of Directive 98/71 and Article 110 of Regulation (EC) No 6/2002 as conferring on producers of replacement parts and accessories the right to use trade marks registered by third parties in order to allow the end purchaser to restore the original appearance of a complex product and, therefore, also when the proprietor of the trade mark applies the distinctive sign in question to a replacement part or accessory intended to be mounted on the complex product in such a way that it is externally visible and thus contributes to the external appearance of the complex product?

35 2. Is the repair clause set out in Article 14 of Directive 98/71 and Article 110 of Regulation (EC) No 6/2002 to be interpreted as constituting a subjective right for thirdparty producers of replacement parts and accessories and, if so, does that subjective right include the right for such third parties to use the trade mark registered by another party in respect of replacement parts and accessories, by way of derogation from the rules laid down in Regulation No 207/ and Directive (EEC) 89/104 4 and, therefore, when the proprietor of the trade mark also applies the distinctive sign in question to a replacement part or accessory intended to be mounted on the complex product in such a way that it is externally visible and thus contributes to the external appearance of the complex product?

36 The Tribunale di Torino s reasoning simplified - in 4 points: The wording of Art. 241 CPI states refers to all exclusive rights The LOGO must be fixed on the spare part to establish its original feature. LOGOS of car producers as trademarks on spare parts are only seen as a decorative element by the consumer and therefore do not violate the trademark as such in its function as a sign of commercial origin. Italian jurisprudence is not consistent.

37 Answer of the CJEU (6. oct. 2015) Art. 14 of the Directive 98/71 and Art. 110 of Regulation 6/2002 (design law) should be interpreted to mean that they do not in deviation from stipulations of Directive 2008/95 and Regulation Nr. 207/2009 (trade mark law) give the producer of spare parts and hubcaps the right to affix a sign on their products, which is identical to one registered for such products by a car manufacturer, without the consent of the same, with the reasoning that the use of the trade mark is the only possibility to repair the vehicle in question and restore the original image of this complex product.

38 CONSIDERATIONS CONCERNING A DESIGN DIRECTIVE REFORM

39 Legal perspective

40 Car producer s side The original producers who oppose a repair clause point out that the exclusivity of legally allocated market positions is the essence of intellectual property protection. Such far-reaching exemptions, as the repair clauses are in their view not to be reconciled with the heart of intellectual property protection and would also be doubtful under international law. Furthermore, the deregulation of spare-parts production could bring about dangers for the quality and safety of spare parts as well as encouraging counterfeiting. If the lack of a special provision really did lead to risks to free competition, cartell law or European Competition Law should be applicable.

41 After-market side: Intellectual Property Law is dedicated to bringing about exclusivity, but it does presuppose the existence, in principle, of replaceable products, because this is the only way in which a marketable price can be established, which represents a real reward instead of an otherwise achieved monopolyreward. In this case, substitutes can only come about through a competition of copies.

42 Innovation competition, which most closely represents the spirit of intellectual property law, must be discounted at this point since and insofar as the intrinsic design of replacement parts is without alternative. This, however, will not detract from the incentive to innovate in designs, because the relevant investments are incurred at the level of the primary market and the reward can also reasonable be completely harvested there.

43 New Proposals - New Ideas? Might this be possible after such a long way...

44 Potential proposal based on the text approved by the EU Commission and Parliament as part of the legislative process including one additional point.

45 The rights from a design cannot be exercised via a third party using the design, provided that: the product into which the design is inserted or for which it is used, is structural element of a complex product the appearance of which, the protected design in dependent on and the design is used only with the aim and the purpose of enabling the repair of the complex product in such a way that its original appearance is restored, and

46 consumers are being properly informed about the provenance of the product being used for repairs, by using a sign for example a trade-mark or company logo or in another suitable way so that this knowledge enables them to choose between competing products for repair purposes and the one using the design for the purpose of repair informs the right-holder without undue delay of the envisaged use of the design and pays a fair and reasonable royalty/fee to the right-holder.

47 Expert Roundtable with opposites and academics (at Bucerius Law School Okt 2015) 1. The duty to inform and be transparent vis a vis consumers leads to a duty to inform: Replacement part is not produced by the producer of the original Naming the producer (as part of a chain?) stating any differences in quality Information on quality 2. Time-limit for effectiveness of the repair clause in relation to market entry of the product in question.

48 3. Statutory definition of spare-parts for cars 4. Adjacent measures for the enforcement of existing measures in criminal law. 5. Duty to pay royalties shifting costs (drawing parallels with patents?)

49 Discussion in the CET-J (Circle of European Trademark Judges) Repair clause but Annex to the Directive 2006/114/EC on misleading and comparative advertising in which it should laid down under which provisions the repair clause applies (concerning art. 2 to 4 and 8).

50 Further Ideas Compulsory Licence provided that the following points are fulfilled...(see different proposals before)

51 Via Antitrust Law and Unfair Competition Law A repair clause is not necessary as long as the issue is seen as in the ECJ s decisions in VOLVO (C-238/87) and Maxicar/Renault (C-53/87).

52 Proposal of ECTA To reduce the term of spare parts design protection to five years (no possibility of extension) and open the market for competition after such protection period.

53 Conclusions The problem lies in achieving a political consensus between the two opposites Property and the allowable reasonable and minimal incursion into limiting property rights. or Developing competition and the interests of the consumer in the EU. The repair clause helps to ensure this. Which one is given priority?

54 And how about your ideas...?

55 Thank you for listening