On June 6, 2017 Division 3 of the Federal Court of Appeals in Civil and Commercial Matters, in re “Dart Industries Inc. v. Crom S.R.L.” (case No. 3769/15/CA1) upheld the district court’s decision to reject the plaintiff’s request to dismiss the counterclaim filed by the defendant seeking to cancel the plaintiff’s industrial designs.
The plaintiff, Dart Industries, Inc., had sued Crom S.R.L. on the grounds of infringement of industrial designs Nos. 79,005 and 79,006. Defendant Crom S.R.L. counterclaimed, requesting the cancellation of plaintiff’s above-mentioned designs for lack of novelty.
When responding, Dart petitioned that Crom’s counterclaim be dismissed on the grounds that the statute of limitations had run out. The relevant statutory provision is section 18 of the Design Law, which provides for a five-year term from the design’s application date to request cancellation.
The district court rejected Dart’s request and ruled that the issue would be decided in the final decision because it was necessary to examine a number of facts on which the appropriate evidence would have to be submitted. On appeal, the plaintiff pointed out that no further evidence was needed as all the requisite facts had been incorporated into the file; namely the two design registrations with their filing date, so that it was only necessary to ascertain that the statutory five-year term had run out. Nonetheless, the court of appeals concurred, providing the same reason put forward by the lower court.
The controversy actually involves the interpretation of section 18 of the Design Law, specifically whether the five-year statute of limitations may be applied to an instance of absolute invalidity (such as a registration made in blatant bad faith). In a 1992 decision, the Supreme Court ruled that the aforesaid provision could be applied to all kinds of invalidity, including absolute invalidity (“D’Uva, Norberto Carlos v. Schirripa, Gaudencio y otro”, October 6, 1992). The difficulty posed by this interpretation is, of course, that the registration of a flagrant copy would be validated after five years from the registration date.
Dart argued that the Supreme Court ruling was not applicable because the case in question did not involve absolute invalidity but relative invalidity, specifically the alleged lack of novelty due to the existence of prior art.
As indicated above, both the district court and the court of appeals decided to defer treatment of whether section 18 was applicable to the case at hand until the final decision was delivered. In consequence, possibly in two or three years’ time –which is what an Argentine court usually takes to decide on a design infringement case– we may have a decision clarifying whether the statute of limitation is applicable to all instances of design invalidity or only to those involving an absolute invalidity.