The Court of Justice of the European Union (CJEU) published its decision in the joined Acacia cases at the end of 2017, providing guidance on how to interpret the Design Regulation’s repair clause. The central question was whether (car) manufacturers could act against the sale of replica spare parts, such as wheel rims, on the basis of a Registered Community Design.
The decision concerns the joined cases bought by Audi and Porsche against Acacia (an Italian car manufacturer of wheel rims). Audi and Porsche had alleged that Acacia had infringed several of their community designs for wheel rims and wheels by producing and selling replica wheel rims. In defence, Acacia invoked the Design Regulation’s repair clause (Article 110(1) of the Community Design Regulation).
What is the repair clause?
As we have written previously, the Community Design Regulation includes a ‘repair clause’ that excludes replacement parts and accessories from design protection. This repair clause was designed to enable independent manufacturers to provide customers with spare parts for repair purposes at cost-effective prices by freeing them from potential infringement claims.
Unsurprisingly, many car manufacturers are unhappy at what they consider to be a weakening of their IP rights. In addition, it has been a matter of some debate which elements of a car are even covered by the clause; for example, does it include accessories, such as wheel rims? This was one of the preliminary questions referred to the CJEU for ruling.
In its decision, the CJEU found that the scope of the repair clause is not limited to components whose shape is determined by the appearance of the complex product (such as headlamps). That means that the repair clause covers all spare parts without any form of limitations, regardless the shape.
However, it added that the clause is only applicable when the repair serves to restore the original appearance. In addition, the concept of ‘use’ should be interpreted broadly and includes all forms of use of a part for repair purposes, such as: “the making, offering, putting on the market, importing, exporting or using of a product in which the design is incorporated or to which it is applied, or stocking such a product for those purposes”.
According to the CJEU, the repair clause is only applicable to replacement component parts of a complex product that is visually identical to the original parts. This follows from the finding that the repair should be carried out in order to restore the original appearance of the complex product, i.e. the original appearance of the product when placed on the market. Using parts that differ too much from the design, colour or dimensions of the original appearance for repair purposes is thus not allowed.
‘A duty of care’
Lastly, the court stated that a person who invokes the repair clause is under a duty of care to ensure that ‘downstream users’ act in compliance with the requirements of the repair clause. The manufacturer or seller of a component of a complex product is not obliged, however, to objectively guarantee that end users ultimately act in complete compliance with the outlined conditions.
This duty of diligence towards downstream users requires the following:
- Downstream users need to be informed that the replacement part is exclusively used for repair purposes in order to restore its original appearance and to inform that the replacement part incorporates a design of which they are not the holder;
- Producers or sellers of spare parts need to ensure that downstream users do not have the intention to use the parts in a way that does not comply with the repair clause;
- Producers or sellers of spare parts cannot sell parts when they know or ought reasonably to know that downstream users have the intention to use the spare parts for purposes other than repair purposes.
What does that all mean in practice?
According to the CJEU, the repair clause needs to be interpreted broadly and includes all spare parts, providing that the reparation is with the purpose to restore the original appearance.
The case will now be passed back to the national courts to judge whether Acacia can invoke the repair clause and legitimately use the replica wheel rims. However, this decision is not only relevant to the automotives industry, but also applies to all spare part industries, provided that the requirements are met.