Katri Kiviniemi November 7 2022 Death of design rights? Bryn Aarflot AS | Intellectual Property - Norway Katri Kiviniemi Intellectual Property FactsBackgroundDecisionCommentIn June 2022, the Borgarting Court of Appeal in Oslo concluded that Starco Norge AS, when marketing and selling its Angel wheel rims, had not infringed Audi AG's rims, protected with registered designs and designed for the Audi RS6 Avant car. This judgment raises the question of how strict a line the Norwegian courts can adopt before design rights become illusory.FactsIn 2017, the Oslo Office of the City Recorder issued a preliminary injunction following a petition from Audi. The customs authority was ordered to withhold all items that could constitute an infringement of Audi's design and trademarks. As a result, the customs authority detained 32 of Starco's Angel rims. When Starco became aware of this, it petitioned for the preliminary injunction to be lifted.Audi brought a lawsuit before the Oslo District Court, demanding that Starco be prohibited from putting on the market, marketing and selling the Angel rims. In addition, Audi filed an invalidity action before the European Union Intellectual Property Office (EUIPO), demanding that the design registration of the Angel rim be declared invalid. Audi claimed that the Angel rims did not meet the requirement of individual character as set out in article 6 of the Community Design Regulation.The EUIPO's assessment in the invalidity action on the overall impression given by Starco's rim in comparison to Audi's was roughly the same as the Oslo District Court's, but the outcome was different. The Oslo District Court, in contrast to the EUIPO, did not find in favour of Audi. Audi appealed the first instance decision to the Borgarting Court of Appeal in Oslo, which upheld the Oslo District Court's verdict. In parallel, Starco appealed the EUIPO's decision (the appeal is pending before the EUIPO).BackgroundSection 9 of the Norwegian Design Act states that if a party uses a design which does not give the "informed user" a different overall impression to an earlier registered design, it constitutes an infringement of the design holder's exclusive right to the registered design in Norway.DecisionThe main question before the Borgarting Court of Appeal was whether the Angel rim gave the same overall impression as Audi's registered rim design. Hence, the Court needed to determine whether the impression given by the design to an informed user differed from the existing design corpus, considering the nature of the product, the particular industrial sector and the degree of freedom of the designer in developing the design.In accordance with the case law, the Court defined the informed user as a person with "a certain knowledge in car rims, a certain degree of knowledge about rim design and trends and what these usually include and a relatively high degree of attention". Such a fictive user should not be an expert on rims but would have more knowledge than an ordinary consumer.The Court assumed that the scope for rim design was limited, given that the design was largely governed by functional requirements. However, the Court pointed out that the designers still have a certain freedom to design the rim's appearance – for example, by choosing the number of spokes, the shape of the spokes and their colour.In this case, the number and colour of the spokes was the same, and the shape of the spokes was essentially the same, with some small differences. It seems that the Court attached limited importance to this.Figure 1 shows a selection of registered rim designs to exemplify the variety of possibilities, which may not be less limited as the Court assumed.Figure 1: selection of registered rim designs (each rim is shown twice, except for the two rims involved in this case, which are shown once each)The Court agreed with Starco's view that owing to the product density, the designer's freedom was limited and, consequently, not many differences were needed before the products were sufficiently different for there to be no infringement. The relevance of the high product density in the assessment is confirmed in EU case law, and in the EUIPO decision against Starco. This also aligns with the view that general trends do not limit designers' freedom but they can make the informed user more sensitive to details.The Court in this case emphasised that "the five-spoke trapezoid design [was] no longer modern", while "the fan-shaped expression" on both rims was a trend. The Court held that the informed user would focus more on the details that gave the rims a different overall impression. Further, the Court held that the impression given by Audi's rim design was not that different to the existing design corpus - a greater degree of difference would have afforded a wider scope of protection.The Court concluded its concrete assessment of design infringement by comparing the two rims. A comparison of design registration of Audi's rims and the rims sold by Starco shows that they are similar (Figure 2).Figure 2: in this image, the colours have been manipulated and the lid has been removed from the middle of one rim to provide the best possible basis for comparisonAccording to the Court, "the differences in the split or fork-shaped thin spokes and the cavities" were essential – the Court held that these gave the rims a different overall impression.In the assessment, the Court focused on the details, as it believed the informed user would do. However, if the whole designs are considered, as the EUIPO seems to do to a greater extent, it can be appreciated that both rims have five spokes and a trapezoid/fan design. The spokes are the same size, with very similar grey/silver details – the innermost spokes are completely grey/silver, while the outermost spokes with a break have a thin grey/silver stripe. The rims appear very similar when not actively looking for differences in the details. This is illustrated in Figure 3.Figure 3: Audi rim (left) and Angel rim (right)CommentThis case raises the question of whether the Norwegian view of the law is in harmony with EU law. In its assessment, the Court did not so much as mention the decision from the EUIPO, despite the fact that it reached a different result in an almost identical assessment. The threshold set by the Court for something to be characterised as a design infringement may be considered too high. The question remains – if this does not constitute a design infringement, what will? If this judgment is now final, there is a danger that design protection will be eroded. A possible consequence of this is that only almost identical copies will be protected by design law in Norway, which represents a contrast with Norway's neighbouring countries.Furthermore, the Court's use of Starco's "thorough" report in the assessment may be questioned. The judgment gives the impression that the report is a technical expert report with probative value, which is doubtful. It does not seem very balanced that Audi's report was not mentioned in the judgment.Based on the public information and the pictures that appear in the judgment, it is reasonable to think that there was sufficient similarity between Audi's and Starco's rims to be able to determine that Starco had infringed Audi's design registration. Contrary to what the Court decided, it is clear that, as stated by the EUIPO based on the evidence before it, the designer has a large degree of freedom when designing car rims.This decision may create further uncertainty for designers in general and be an obstacle to companies wanting to spend resources on design registration in Norway. In light of the verdict's many unresolved and unanswered questions, many in the industry both hoped and believed that the case would be taken up for consideration in the Supreme Court, and that a more thorough assessment may be handed down. Audi did not file for an appeal and, therefore, rights holders must now come to terms with the decision.This may be somewhat disappointing from right holders' perspective. However, it is worthwhile remembering that this decision, as all design cases, relied heavily on the facts and evidence as presented. It will be interesting to see whether the Boards of Appeal of the EUIPO will reverse the decision in the European Union. Design rights may thus live to see another day.For further information on this topic please contact Katri Kiviniemi at Bryn Aarflot by telephone (+47 46 90 30 00) or email ([email protected]). The Bryn Aarflot website can be accessed at baa.no.