Legal background

The CD Regulation provides that a design will be protected as a Community Design to the extent that it is "new" and has "individual character". A design will be considered to be new if no identical design has been made available to the public (in the case of a registered Community design) before the date of filing of the application for registration of the design for which protection is claimed, or, if priority is claimed, the date of priority. Designs will be deemed to be identical if their features differ only in immaterial details. A design will be considered to have an individual character if the overall impression it produces on an informed user differs from the overall impression produced on such a user by any design which has been made available to the public (in the case of a registered Community Design) before the date of filing the application for registration or, if a priority is claimed, the date of priority.

Facts of the Case

On 9 September 2003, PepsiCo filed an application with OHIM (Office for Harmonisation in the Internal Market) for the registration of a Community Design pursuant to the CD Regulation. Grupo Promer then claimed priority for its Spanish design No 157156, which had been filed on 23 July 2003 and which application was published on 16 November 2003. Both registrations concern the design for "pogs" or "tazos": promotional items in the form of plastic or metal discs that are often included in food packaging and are intended mainly for children.

Grupo Promer started an invalidation action before OHIM against PepsiCo's design application, arguing (i) that PepsiCo's design lacked novelty and individual character (on the basis of Article 25(1)(b)) because of Grupo's Promer's earlier Community Design for metal promotional plate(s) for games; and (ii) that PepsiCo's design was "in conflict" with Grupo Promer's prior design (pursuant to Article 25(1)(d)).

Grupo Promer's first argument failed because its earlier Community Design had not yet been published at the time of PepsiCo's application, and thus could not be taken into account as a prior design for the purposes of Article 25(1)(b). However the Invalidity Division of OHIM invalidated PepsiCo's Community Design on the grounds that it was in conflict with the prior design, holding that PepsiCo had a great degree of freedom in choosing which type of promotional toy to include in its packaging, and that PepsiCo’s pogs unnecessarily produced the same overall impression as those of Grupo Promer.

On appeal by Pepsico, the Board of Appeal overturned the invalidation decision, holding that in assessing the degree of freedom within the category of pogs, Pepsico's degree of freedom was severely restricted and small differences were enough to produce a different overall impression. Grupo Promer then appealed to the EU General Court. The General Court overturned the Board’s decision, ruling that even though the designer’s freedom was severely restricted, the differences between the two designs were too insignificant to create a different overall impression. Further, it found that certain aspects of the design, namely the circular shape in the centre of the pog, were not technically necessary and thus could have been avoided.

PepsiCo then appealed to the ECJ on the grounds that the General Court had incorrectly interpreted and applied Article 25(1)(d) CD Regulation (conflict with prior design). The Advocate General urged that the appeal be dismissed, noting that a significant number of the grounds of appeal actually concerned findings of fact, and these are not suitable for appeal to the ECJ.

ECJ's Findings

Designer’s Degree of Freedom

PepsiCo argued that the General Court had failed to take into account the constraints on the designer's freedom in respect of the products in question. Whereas the General Court had found that the central circular shape, the raised edge and the similar dimensions of the designs at issue were not the result of a constraint on the designer’s freedom, PepsiCo contended that those elements of similarity were necessary if the goods at issue were to fulfil their function. According to PepsiCo, that led the General Court to incorrectly assess the overall impression produced by each of the designs in conflict.

The ECJ dismissed this ground of appeal, holding that it called for an appraisal of the General Court's factual findings, without a clear showing of how the evidence had been distorted. This went beyond the ECJ's powers of review in an appeal.

The Informed User

PepsiCo also argued that the General Court had incorrectly interpreted the concept of "informed user". The ECJ acknowledged that the CD Regulation does not define this concept and followed the Advocate General in holding that the concept "must be understood as lying somewhere between that of the average consumer, applicable in trade mark matters, who need not have any specific knowledge and who, as a rule, makes no direct comparison between the trade marks in conflict, and the sectoral expert, who is an expert with detailed technical expertise". Therefore, an informed user is not a user of average attention but a particularly observant one, either because of his personal experience or his extensive knowledge of the sector in question.

PepsiCo further argued that the informed user must be assumed to be in a position to compare the designs side by side and, in contrast to the position in trade mark law, does not have to rely on an "imperfect recollection". The ECJ held that while the very nature of the informed user means that, where possible, he will make a direct comparison between the designs at issue, it cannot be ruled out that such a comparison may be impracticable or uncommon in the sector concerned. In the absence of any precise indications to that effect in the CD Regulation, the European Union legislature cannot be regarded as having intended to limit the assessment of potential designs to a direct comparison. Therefore, the General Court did not err in assessing the overall impression produced by the designs in conflict without starting from the premise that an informed user would in all likelihood make a direct comparison of those designs.

Level of Attention

As to an informed user's level of attention, PepsiCo argued that he will not only consider the "most visible surfaces" of a design and focus on "easily perceived" elements but will have a chance to consider the design as a whole in more detail, and compare it to earlier designs, taking into account the designer’s freedom. However, the ECJ ruled that although the informed user is not the well-informed and reasonably observant and circumspect average consumer who normally perceives a design as a whole and does not proceed to analyse its various details (as in trademark law), he is also not an expert or specialist capable of observing in detail the minimal differences that may exist between the designs in conflict.

Comparison between the registered designs or the physical goods?

PepsiCo further argued that the conflicting designs should not have been assessed on the basis of the actual products in which the designs were expressed, and that that the General Court’s review was too focused on the physical goods rather than the designs as registered.

The ECJ rejected this argument, holding that the General Court had based its assessments on the designs as registered and had referred to the physical goods only to confirm the conclusion reached in those assessments. According to the ECJ, since in design matters the person making the comparison is an informed user, who is different from the ordinary average consumer, it was not erroneous, in the assessment of the overall impression of the designs at issue, to take account of the goods actually marketed which correspond to those designs.

Comments

This is the ECJ's first judgment on Community Design rights. Although it dismissed a number of the grounds of appeal because they required factual appraisals, the decision nevertheless provides a welcome clarification of a number of legal concepts in the Community Design Regulation.

According to the ECJ, the concept of the "informed user" in design right conflicts is an intermediate category between an "ordinary average consumer" (who need not have any specific knowledge) and a sectoral expert (with detailed technical expertise). As regards his level of attention, the ECJ characterises an informed user as being not a user of average attention, but a particularly observant one, either because of his personal experience or his extensive knowledge of the sector in question.

As to the comparison of potentially conflicting registered Community Designs for assessing their overall impression, however, it seems that the ECJ has taken the view that in principle the comparison should still be made between the designs as expressed in the underlying registrations but that a comparison of the physical goods may be used to confirm the assessment.