On July 2, 2009 (Case C-32/08) the European Court of Justice had the opportunity for the first time to take a position on the interpretation of the Community Design Regulation (CDR) in a matter referred to it by a Spanish Court. The Spanish court specifically asked the ECJ for guidance concerning the question whether Art. 14 para. 3 CDR only concerns Community designs developed in the course of an employment relationship governed by an employment agreement or whether this provision can be interpreted more widely to also include service or project agreements containing the obligation to develop a particular design. Art. 14 para. 3 CDR provides that where a design is developed by an employee in the execution of his duties or following the instructions given by his employer the right to the Community design shall vest in the employer, unless otherwise agreed. The background of the litigation in Spain which led to the referral to the ECJ was that one company had asked another company as part of a project to develop a design for a fixed price.

The ECJ interpreted Art. 14 para. 3 CDR narrowly in accordance with its wording and pointed out that the Regulation consciously speaks of the “employer” and not the principal. Therefore, according to the court, Art. 14 para. 3 does not apply to Community designs developed as part of a commercial order. If a clear assignment of the design to the third party was not contractually agreed, the rights to the Community design will therefore vest in the designer according to Art. 14 para. 1 CDR. This means that with respect to commercial agreements, diligence is required to make sure that the rights to designs developed in the course of a commercial order will clearly be assigned contractually to the principal. If this is not the case, there is a serious risk that the designer will develop the design in accordance with the agreement, but will retain the (Community design) rights to it and may either ask for additional compensation for an assignment by the principal, or even use the design himself against the intention of the principal.