The recent case of Bayerische Motoren Werke Aktiengesellschaft ("BMW") v Round & Metal Limited and another has provided a useful interpretation of Article 110(1) of the Community Designs Regulation (the Regulation). The defendants sought to rely upon the provision as a defence to Community registered design infringement by arguing that it applies to spare parts for the purposes of repair. Mr Justice Arnold in the High Court found that the defence did not apply and BMW's Community registered designs and Community trade marks had been infringed by the importation and sale in the UK of replica alloy wheels. The judge made no finding on the passing off claim on the basis that BMW had won its trade mark infringement claim and because it raised additional issues which had not been explored in argument.
BMW is the registered proprietor of four registered Community designs for alloy wheels. Round & Metal (R&M) imports and sells replica alloy wheels for cars, including for Minis and BMWs. BMW sued R&M for design right and trade mark infringement, and for passing off. R&M denied infringement and in respect of the designs claims, argued that its activities were permitted under the "spare parts" exception (Article 110(1)) of the Regulation.
The law - Community registered designs
Article 110(1) of the Regulation is a transitional provision which provides that "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 repair of that complex product so as to restore its original appearance". A complex product is one composed of at least two replaceable component parts permitting disassembly and reassembly of the product, in this instance, a car.
The Regulation implements the EC Designs Directive (98/71/EC) aimed at harmonising the substantive requirements for registered design protection within the European Union. Proposals by the European Commission were published in 2004 to amend the Directive to introduce a "free repair clause" allowing designs for visible spare parts to be freely reproduced and marketed by third party manufacturers for the purposes of repair within the EU. The European Parliament voted in favour, subject to certain amendments, but the proposal has yet to be further considered by the European Council. Until such time, Article 110(1) is the relevant 'spare parts' defence for Community registered designs.
The design issues and decisions
BMW was successful in its claims; the spare parts defence did not apply in this case. In his judgment, Mr Justice Arnold identified and answered four key questions which provide useful guidance on the interpretation of Article 110(1):
- Is Article 110(1) an exclusion from Community design protection or a defence?
Decision: it is a defence and, as such, the onus of proof was on R&M to establish that the exception applied, rather than being on BMW to establish that it did not apply.
- Does Article 110(1) only apply where the design of the component part (the alloy wheel in this case) is dependent on the appearance of the complex product (the car)?
Decision: yes, it should be interpreted as being restricted to component parts which are dependent on the appearance of the complex product. Recital 13 of the Regulation refers to "a component part of a complex product upon whose appearance the design is dependent". Although the italicised words are not in Article 110(1) itself, the Article should be interpreted in accordance with Recital 13.
In this case, the requirement of dependency was not satisfied. The evidence clearly showed that replacement of wheels of one design with wheels of a different design was a "perfectly realistic" option. The position might be different in relation to other component parts for cars such as body panels, bumpers and windows which would be dependent upon the appearance of the car.
- How is the purpose of the component part determined?
Decision: the normal purpose of the part is considered. Is it normally used to repair the complex product when the part is broken, damaged or worn, or is it normally used for another purpose, such as upgrading the complex product or improving its appearance?
The 'purpose of repair' requirement was not satisfied. On the facts of this case, the replica wheels were not normally used for the purposes of repairing cars, but rather for upgrading them. Mr Justice Arnold highlighted various pieces of evidence which supported this, including the fact that most of R&M's wheels were sold in sets of four rather than singly or in pairs (front/back), indicating they were not purchased to replace one damaged BMW wheel. Further, R&M did not sell replicas of BMW's standard wheels, but only the designs with larger diameters, suggesting that they are considered to be upgrade, rather than replacement, parts.
- What is meant by the "original appearance" of the complex product?
Decision: the "original appearance" of a car is its appearance when sold by the manufacturer. It does not include parts fitted by previous owners, including upgrades.
For Article 110(1) to apply, the part must be used to restore the complex product to its original appearance. On the facts, this is not what R&M's wheels were used for.
Trade mark infringement and passing off claims
BMW also alleged that R&M was infringing a range of its Community trade marks by selling stickers, which were reproductions of the BMW logos, for attaching to the replica wheels. R&M argued that purchasers would know that neither the stickers nor the wheels with the stickers attached, emanated from BMW. The judge did not accept R&M's argument. He emphasised in particular that subsequent purchasers of the wheels might be confused as to their origin: "seeing wheels of BMW's design bearing BMW logos, they will naturally assume that the wheels are genuine BMW wheels" (at paragraph 107). In doing so, he referred to the decisions of the CJEU that such post-sale confusion could be relied upon in Arsenal Football Club plc v. Reed  ECR I-10273 and Anheuser-Busch Inc v. Budejovicky Budvar NP  ECR I-10989, which also involved identical marks used in relation to identical goods. He was also careful to reiterate his decision in Datacard v. Eagle  EWHC 244 (Pat) that in cases not involving double identity of marks and goods, such post-sale confusion can also be relied upon to demonstrate a likelihood of confusion.
Further, the judge found R&M to be liable for trade mark infringement for eBay listings which described the replica wheels as, for example, "BMW parallel wheels", noting that BMW had not raised any complaint about any listings which included the word style e.g. 'MINI mesh style wheels'.
As the judge had found in BMW's favour on trade mark infringement and because it raised additional issues which had not been explored in argument, he did not go on to consider the passing off claim.
The decision provides a useful interpretation of the spare parts defence under the Regulation and has clarified when it may be available. To be successful in asserting a spare parts defence, the design of the spare part must be dependent on the original appearance of the complex product and the part's normal purpose must be to repair the complex product as opposed to enhance or upgrade it. Where an alternative design of a component or spare part is a realistic option, the defence will not apply.