In Bayerische Motoren Werke Aktiengesellschaft v Round and Metal Ltd and another  EWHC 2099 (Pat), 27 July 2012, the High Court of England and Wales has held that replica alloy wheels for BMW and MINI cars infringed BMW’s Community Registered Designs (CRD). The “spare parts” defence under Article 110(1) of the Community Designs Regulation (6/2002/EC) (CDR) did not apply. The Court held further that the defendant infringed BMW’s Community trade marks (CTM) by importing and selling replica wheels into the United Kingdom.
BMW owns a number of CRD for motor vehicle wheels. Round and Metal (R&M) imported into and sold in the United Kingdom replica alloy wheels that were essentially of the same appearance as four of the CRD. R&M did not deny that it was infringing the CRD, but argued that Article 110(1) of the CDR applied. Article 110(1) is a transitional provision that provides that until amendments to the CDR are made, there is no protection for a “design which constitutes a component part of a complex product … for the purpose and repair of that complex product so as to restore its original appearance.”
BMW also advanced subsidiary claims that R&M infringed five of its CTMs and committed passing off when supplying with the replica wheels logo stickers containing these marks and posting listings in R&M’s eBay store.
The principal issue concerned the interpretation of Article 110(1). Surveying legislative history, Arnold J found that the burden of proof lay on R&M to show that the exception applied.
Arnold J noted the discrepancy between the wording in Article 110(1) and the wording in Recital (13). Recital (13) refers to a component part of a complex product “upon whose appearance the design is dependent”, whereas this phrase does not appear in Article 110(1). Arnold J found that Article 110(1) should be interpreted as being restricted to component parts that are dependent on the appearance of the complex product. Noting that the purpose of exception is to ensure that original equipment manufacturers cannot monopolise the aftermarket, where the owner of the product has no realistic alternative to replacing the part, Arnold J found that the designs of alloy wheels of the kind at issue were not dependent on the appearance of the car, because it was clear from the evidence that replacement of wheels of one design with wheels of a different design was a perfectly realistic option.
Article 110(1) only applied to component parts “used for the repair of a complex product”. Arnold J agreed with BMW that it was necessary to examine how the component was normally used in practice: was it used to repair the complex product or for another purpose, such as upgrading it? The evidence showed that the replica wheels were sold in sets of four, that R&M did not sell replicas of BMW’s factory wheels but only larger designs, that R&M’s replicas differed in the width of the wheels and that many of R&M’s sales included logo stickers for attaching to the wheels that were not necessary where a damaged wheel was being replaced. Arnold J concluded that the wheels concerned were not normally used for the purpose of repairing cars, but rather for the purpose of upgrading them.
Arnold J noted that Article 110(1) only applied where a complex product was being restored to its original appearance as supplied by the manufacturer or its authorised dealer. This was not what R&M’s replica wheels were used for. Arnold J concluded therefore that R&M had infringed each of BMW’s CRDs.
Trade Marks and Passing Off
Finding that R&M infringed each of BMW’s CRDs, Arnold J turned his attention to the CTMs. He rejected R&M’s argument that purchasers would know that neither the stickers nor the wheels with the attached stickers emanated from BMW. Whilst he accepted that garages may not be confused as to the origin of the wheels, there was a real likelihood of confusion amongst subsequent purchasers of cars to which the wheels bearing the stickers were fitted. Such post-sale confusion could be relied upon to demonstrate a likelihood of confusion.
With respect to the eBay store, Arnold J found that there was a real likelihood of confusion, noting that the manner of use of the marks was such as to give the impression that the replica wheels were genuine BMW wheels.
Having found R&M had infringed BMW’s CTMs, Arnold J did not consider the passing off claim.