For many years there has been a question mark over whether a design must be first published in the geographical territory of the European Union in order for it to attract protection as an unregistered Community design. However, a recent case brought before the Intellectual Property and Enterprise Court (IPEC) in the UK has prompted the court to seek clarification on precisely this issue, and the court has referred the matter to the Court of Justice of the European Union (CJEU) for guidance. The CJEU’s decision will be highly significant to designers in the UK who will find themselves outside of the EU’s unregistered designs regime following Brexit, and could pave the way for continued protection in the EU for designs first disclosed in the UK.
The Issue at Hand
Designs are protectable EU-wide as either registered or unregistered Community designs. Article 11 of the Community Designs Regulation (CDR) states that a design is protected as an unregistered design for a period of three years after it is first disclosed in such a way that the design would have become known in the normal course of business to the sector concerned practicing in the EU.
However, according to Articles 5 and 6 of the Regulation, in order to enjoy unregistered Community design protection, the design must be novel and possess individual character at the date on which protection is claimed – i.e. the design must not be identical to any other designs that had been made available to the public prior to the relevant date, and the design must also produce on the informed user a different overall impression from other designs that had been made available to the public prior to the relevant date. Articles 5 to 7 of the Regulation set out that the relevant date for determining the validity of the unregistered design is the date the design is first disclosed under corresponding conditions to those of Article 11.
The wording of Article 11 does not mention the geographical location of the disclosure, and appears to leave open the possibility that a design can be protected if the disclosure originates outside the EU. This would seem fair in the context of Articles 5 to 7, which allow for non-EU prior art disclosures to invalidate a Community design, provided they have become known in the EU.
However, Article 110a of the Regulation states that any design which has not been made available to the public within the territory of the EU does not enjoy protection as an unregistered Community design. Opinion is divided as to the precise meaning of this provision. On the one hand, Article 110a could be interpreted as removing the “wooly edges” of Article 11 and thereby preventing unregistered protection for non-EU disclosures. On the other hand, Article 110a could be read as merely delaying unregistered protection until the design is disclosed in the territory of the EU. Should unregistered Community design protection not exist until the design is disclosed in the territory of the EU, then it is possible that unregistered Community design protection will never exist for the design – by the time unregistered Community design protection comes into existence, the design may no longer be new (and therefore protectable) due to the design having been made public elsewhere in the world. The ambiguity arises because Article 110a makes no explicit mention of where the first worldwide disclosure of the design must be made.
The German Federal Supreme Court has previously considered the effect of Article 110a and decided that the first worldwide disclosure of the design must take place in the territory of the EU for unregistered Community design protection to exist. To many, the law on this point has therefore been settled, and I have personally encountered a number of European colleagues who struggle to understand what all the fuss is about! However, the German decision does not have effect EU-wide, and so there is still no definitive EU authority on the question of first disclosure.
The referral from IPEC concerns a dispute between the Beverly Hills Teddy Bear Company and PMS International Group Plc (the latter of which already has some notable contributions to the body of Community designs case law here and here). Beverly claims infringement of unregistered community design right in a collection of soft toys known as “Squeezeamals”, which were first disclosed at a trade fair in Hong Kong, and some months later at a similar even in Nuremberg.
Both parties agree that the Hong Kong disclosure would have become known in the EU. Beverly argues that their toys are therefore protected under Article 11 CDR from the date of the Hong Kong disclosure. PMS argues that the toys are only protected from the date of the Nuremberg disclosure, and that consequently the Hong Kong disclosure is novelty-destroying prior art. In response, Beverly argues it is unfair that a disclosure can become known in the EU for the purpose of forming part of the prior art but not give rise to unregistered protection, and further proposes a “split date” in which protection comes into being from the date of the Nuremberg disclosure, but for which the prior art is assessed based on the Hong Kong disclosure. The CJEU has therefore been asked to clarify, in respect of unregistered designs, whether the first worldwide disclosure of the design must take place in the EU and which date should be used for determining the validity of an unregistered design.
Effect on Brexit
The outcome of the referral will be of significant interest to UK designers who, depending upon the evolving political picture in the UK, can expect to find themselves outside of the Community designs regime in the near future. Following Brexit, a new “supplementary unregistered design” right will be created mirroring the current unregistered Community design, but with effect only in the UK. The UK Intellectual Property Office (UKIPO) has published guidance on the new supplementary unregistered designs, which states that these new rights will only come into effect for designs that are first disclosed in either the UK or a small number of qualifying territories, but at present the EU is not included within such qualifying territories. Interestingly, the list of qualifying territories includes Hong Kong, and so Beverly may not have found itself in its current predicament post-Brexit insofar as UK supplementary unregistered design right is concerned.
The UKIPO’s position appears to be based on the theory that the corresponding EU right requires first disclosure in the EU, and consequently it would not be beneficial for the UK to extend protection to designs first disclosed in the EU without some form of reciprocal agreement. It will be interesting to see whether the UKIPO will amend their advice if the CJEU decides that first disclosure is not required in the EU.
If the CJEU decides that first disclosure must occur in the territory of the EU this is potentially bad news for UK designers, who will need to carefully consider how best to disclose their designs to give rise to both the EU and UK unregistered rights post-Brexit. Furthermore, this could have an effect on the willingness of EU designers to first disclose their products at UK events, and may see the UK taking a diminished role as a venue for launching products in consumer goods or design-led sectors. However, if first disclosure in the EU is not required to initiate unregistered protection, for many industries it will be “business as usual” post Brexit. Furthermore, from a public policy perspective, a decision in Beverly’s favour would effectively remove the need for an official reciprocal arrangement between the UK and EU regarding unregistered designs in the future. The CJEU’s decision will therefore have a significant impact on unregistered design protection in the UK and the EU post-Brexit.