The German Federal High Court (Bundesgerichtshof – “BGH”) has asked the European Court of Justice (“CJEU”) to rule on the reach of the “repair clause” of Article 110 (1) of the European Design Regulation (EC) 6/2002 which bars the scope of design rights. According to this provision, “protection as a Community design shall not exist for a design which constitutes a component part of a complex product used … for the purpose of the repair of that complex product so as to restore its original appearance“. The referral by the highest German Civil Law Court to the Supreme Court of the European Union (file number I ZR 226/14) emerged against the background of the following case:

The Case
German car maker Porsche sued Italian manufacturer of motor vehicle rims Acacia in Germany for infringement of certain registered Community designs (“RCD”) because Acacia offered for sale in Germany replicas of the design right protected rims of Porsche. Acacia argued that its replicas would not infringe the designs of Porsche because it would profit from the bar to protection of the repair clause of Article 110 (1) of the Design Regulation.

In the first and second instance, Porsche prevailed. The BGH concluded that the outcome of the further appeal depends on interpretation of Article 110 (1) Design Regulation and therefore referred five questions to the CJEU for decision prior to rendering its judgment:

Questions to the CJEU and Comments of the BGH

With its central Question 1 the BGH wishes to know whether the repair clause is only applicable to fixed shape parts, that are parts with a shape that is inalterably determined by the appearance of the product as a whole and therefore cannot be selected freely by the customer. The BGH explains in detail why it tends towards affirming that the repair clause does not apply to parts which are not fixed shape parts and that such view is in line with the majority of German case law and legal literature but in contrast to the Corte di Appello di Napoli that wishes to apply the repair clause to rims.

The BGH refers in particular to the wording of the repair clause which makes a distinction between parts that allow for complete restoration of the original appearance of the complex product (and do not infringe design rights) and other parts which are not an inherent part of the original appearance (and may be infringing). The explicit reference of the repair clause to parts which are identical with the original part (“must-match-parts”) would show that the legislator did not intend to allow free use of design protected components for the repair of complex products.

Also, the purpose of the repair clause, that is to prevent that the secondary market for spare parts is monopolized by the owners of design rights, would not be impaired by refusing the repair clause exception to independent parts with an independent esthetical function such as rims. Competition on the market for rims would persist as competitors are free to develop and market new rim designs for Porsche cars.

Proper consideration and balance of the EU protected fundamental rights would also argue against application of the repair clause to rims. The economic aspects of designs rights expand to spare parts and are protected under the fundamental right to property. There would be no legitimate interests of independent rim manufacturers or consumers which justify that design rights shall not expand to rims. In particular, independent manufacturers such as Acacia would enjoy inappropriate advantages if they were allowed to exploit the design development work of the car manufacturer for their own business purposes without any investments of their own.

The further questions referred by the BGH to the CJEU are raised in case the CJEU does not share the view of the BGH and decides that the repair clause exception is not limited to parts restricted to a specific shape and therefore also applies to rims.

With Question 2, the BGH wishes to know whether in such case the repair clause would be applicable to identically designed products only that are products which are also identical in color and size with the original products. The BGH argues in favor of such limitation.

Against the specific background of the challenged judgment of the court of appeal, the BGH asks the CJEU with Question 3 whether the repair clause is only applicable where the vendor objectively ensures that the product is used for repair purposes only and not for other purposes such as tuning the complex product or giving it a more individual appearance. The BGH does not take ultimate position with regard to such objective requirement supplementing the subjective criteria of use of the part with the intention of repair but limits itself to stating that the wording of the repair clause would argue in favor of such additional objective criteria but putting it into practice may be difficult. Possibly, it may suffice that the vendor of the part bears the burden of proof for his offer being intended for repair purposes only.

With its final questions, the BGH asks the CJEU how the vendor can objectively ensure use of the part for repair purposes only but does not indicate its own view. It asks whether it would suffice to include in the sales brochure a note that the parts are sold for the purpose of the repair of the complex product only so as to restore its original appearance (Question 4a) or require that the vendor makes supply with the part subject to the customer (dealer and consumer) declaring in writing that the part at issue shall be used for repair purposes only (Question 4b).

Outlook
The referral of the BGH provides opportunity for the CJEU to clarify further how to draw the line between the protection of intellectual property rights on the one hand and the freedom of competition on the other. It remains to be seen whether it is taking sides with the comprehensively reasoned view of the BGH or the opposite view now taken not only by the Corte di Appello di Napoli but also by the Corte di Appello di Milano which has meanwhile referred similar questions to the ECJ (file number C 397/16). Both proceedings shall be joined.