The European Court of Justice (ECJ) recently decided that licensees of Registered Community Designs can sue for infringement even if their licence is not registered. The decision came following a referral from a German court.
Where a case involves interpretation of European Union law, the court of a member state may refer questions to the ECJ on how the law is to be interpreted. This particular referral was made by a Higher Regional Court of Germany while hearing an appeal from a decision of a lower German court that a Registered Community Design for laundry balls had been infringed by Thomas Philipps GmbH & Co KG. The registered design was owned EMKER SA but its exclusive licensee for Germany – Grüne Welle Vertriebs – brought the action against Thomas Phillips. Thomas Phillips argued on appeal that Grüne Welle is not entitled to bring claims arising from the registered design.
The ECJ was asked to consider two questions, which can be summarised as:
- Can a licensee bring infringement proceedings for a Registered Community Design if the licence has not been entered in the register of Community designs?
- If the licensee can bring such proceedings, can an exclusive licensee, with consent of the registered design’s owner, bring proceedings claiming damages for its own loss, or can it only intervene in infringement proceedings brought by the registered design’s owner?
Regarding question (1), the key provision was Article 33(2) of the regulation governing Community designs. Article 33(2) states that legal acts including those concerning licensing of the registered design “shall only have effect vis-à-vis third parties in all the Member States after entry in the register”. The question was whether the “third parties” here included alleged infringers.
The ECJ considered the legal background and context in which the provision occurs, and decided that the “third parties” did not include alleged infringers. Instead, the provision was intended to cover parties who have acquired rights in the registered design as an object of property (eg an assignee or licensee).
To answer question (2), the ECJ again considered the legal background and context of the provisions of the regulation, including one of the stated objectives of the regulation which is to ensure that the rights granted by the Registered Community Design can be enforced in an efficient manner throughout the European Union. The ECJ then decided that the licensee could bring proceedings claiming damages for its own loss.
In making its decision, the ECJ seems to have taken a common-sense approach to answering the questions set before it, and the decision will be welcomed by right holders as it removes some uncertainty regarding enforcement by licensees.
However, it remains important to register licences to ensure effect vis-à-vis other parties acquiring rights (for example, to ensure effect as against a party granted a subsequent licence for the Registered Community Design).
It should be noted that the situation is different for assignments where the regulation makes clear that infringement proceedings cannot be brought by the assignee before the assignment is registered. Therefore it is important to register assignments of Registered Community Designs to ensure rights can be enforced.