A Picture can speak thousand words – can that picture also protect thousand - if not more - (unregistered) designs?
In short – maybe!
In a game-changing decision, the German Federal Court of Justice (BGH) has recently decided, upon its referral to the Court of Justice European Union (CJEU), that publication of an image of an overall product can give rise to Unregistered Community Design (UCD) rights. This also applies to part(s) of that product provided that the part(s) of the product are clearly visible and identifiable in the image.
UCDs are a very useful form of protection for products, in the European Union (EU), especially against imitators. UCDs come into force automatically when a product is disclosed in the EU and such UCDs provide protection of the appearance of products from copying for the duration of 3 years from the first disclosure in the EU. The protection is, however, limited to against imitations only.
This decision arises from a legal dispute between Ferrari SpA ("Ferrari") and Mansory Design & Holding GmbH ("Mansory") of Germany.
According to Ferrari, its then-new FXX K model was presented in a press release in 2014 with two images (shown below and reproduced from the BGH decision) of the whole vehicle.
The images in the press release claim to include the appearance of the individual parts of the vehicle such as the V-shaped element on the front bonnet, the fin-like elements protruding from the center of that element, the two-piece front lip spoiler integrated into the bumper, and the central vertical bridge connecting the spoiler to the front bonnet.
Two years later at the Geneva motor show, Mansory marketed tuning kits for altering the appearance of Ferrari 488 GTB model to resemble FXX K model.
Regional and Higher Regional Court Decisions in Germany
Ferrari claimed that the disclosure of image gives rise to UCD rights to the appearance of the above individual parts. Based on these UCD rights resulting from the press release, Ferrari initiated proceedings in Germany alleging that Mansory’s marketing of tuning kits infringed on Ferrari’s UCD rights and claimed injunctive relief against Mansory’s activities. Besides, Ferrari based its claims on passing off protection on basis of the German Act against Unfair Competition (UWG) claiming that the tuning kit unreasonably exploits or impairs the good reputation of the FXX K model.
The first instance division in the Regional Court in Düsseldorf dismissed Ferrari’s allegation entirely (Decision 14c O 137/16 of July 20, 2017).
Ferrari’s appeal was also dismissed by the Higher Regional Court in Düsseldorf on the grounds that Ferrari has UCD rights only on the overall product (vehicle) published in the press release, and accordingly, the Higher Regional Court came to a conclusion that this overall design was not infringed by the distribution of the tuning kits by Mansory (Decision 20 U 124/17 of December 6, 2018).
With respect to the parts of the Ferrari FXX K design, the Regional and Higher Regional Courts decided that said parts lacked the minimum requirement of a certain autonomy and consistency of form and that it referred to an arbitrarily defined section.
German Federal Court of Justice (BGH) - Part 1
Ferrari subsequently appealed before the BGH, which then referred the case to the CJEU (Decision I ZR 1/19 – Decision of January 30, 2020).
In previous decisions, the BGH had held that a registered design that protects an entire product does not grant protection against the imitation of only a part or an element of such a design. Some background: The design registered for the whole product protects only the overall impression provided by the whole product. This opinion has been disputed in German legal literature.
BGH informed the CJEU that the Senate tends to consider that by disclosing the picture of the entire product only results in one UCD protecting the entire product, but not for UCDs protecting its parts.
Nonetheless, BGH asked the CJEU for clarification as to whether the disclosure of an appearance of an overall complex product can give rise to UCD rights within respect to individual parts of the complex product (interpretation of Regulation (EC) 6/2002). In particular, BGH asked the CJEU to decide upon the following questions:
- Can unregistered Community Designs in individual parts of a product arise as a result of disclosure of an overall image of a product?
- What legal criterion is to be applied for the purpose of assessing individual character when determining the overall impression of a component part which – as in the case of a part of a vehicle’s bodywork, for example – is to be incorporated into a complex product? In particular, can the criterion be whether the appearance of the component part, as viewed by an informed user, is not completely lost in the appearance of the complex product, but rather displays a certain autonomy and consistency of form such that it is possible to identify an aesthetic overall impression that is independent of the overall form?
The CJEU answered in affirmative (Decision C‑123/20 of October 28, 2021). That is, the CJEU answered that the disclosure of an appearance of an overall product can give rise to UCDs in respect to the individual parts of the product. However, the CJEU also added that it is important that the appearance of that individual part in which rights are claimed be clearly visible and recognizable when the design is made first available to the public. In other words, the individual parts must satisfy a certain autonomy and consistency of form and are clearly identifiable with certainty.
The CJEU recalled that the aim of the UCD system is to provide a simpler and faster way for designers to protect their designs that is balanced by a shorter term of protection when compared to the registered design regime. It was emphasized that insisting on registering each individual part of the product could go against this balance.
The CJEU, therefore, came to a conclusion that the disclosure of an image of an overall product can also give rise to UCD rights in individual parts of the product, provided that the appearance of those individual parts are clearly identifiable in the image.
German Federal Court of Justice (BGH) - Part 2
The BGH considered this case in view of the CJEU’s clarification, and decided to set aside the appeal decision from the Higher Regional Court in Düsseldorf (Decision I ZR 1/2019 of Match 10, 2022).
BGH upheld the rejection of the passing off claims of Ferrari but concluded on basis of the evaluation of the CJEU that Mansory may have infringed upon the UCD of Ferrari’s UCDs if the respective individual parts disclosed in the image satisfied the required criteria of clearness and autonomy.
The BGH referred the case back to the Higher Regional Court in Düsseldorf as further reviewing of the provided facts is necessary to decide whether Ferrari had actually acquired an UCD. Besides, the lower court need to decide on the applicable law for claims of information and damages.
How about UK?
Post Brexit, UK Courts are not bound by the CJEU decisions. However, it may not be ruled out that the UK Courts could follow the CJEU decision given that the objective of the unregistered design regime in the UK is also to balance the speed in obtaining protection and the duration of protection.
What are the take-aways?
The decisions of the CJEU and BGH are game changers. In contrast to registered designs, there is no obligation to separately publish the various parts of a product so as to obtain unregistered protection for these parts as long as the appearance of that part of the product is clearly recognizable when the image of the whole product is made available.
The lack of this obligation to separately publish individual parts of a product to claim protection for such parts through a UCD would certainly save time and costs, especially for products having shorter shelf life or in a rush to pre-date the imitators. This decision is therefore good news for the design owners but may not be good news, however, for imitators. This decision may benefit not only car manufacturers but also owners of other complex products in other sectors. The decision emphasizes the importance of the unregistered design right, which can be used and adapted to best match the potentially copied designs of your competitors. Designers wishing to rely on such UCD protection for individual parts of their product should now make sure that the relevant part is clearly identifiable when the product is made available (by using clear borders, boundaries, lines etc.).
On the other hand, Ferrari could have claimed damages from Mansory for infringement. However, the damages, given the shorter term of protection of the UCDs, are limited. Moreover, Ferrari may not stop Mansory from offering the tuning kit after the expiry of the protection. Claims on basis of passing off protection have been denied in all instances.
Besides, German case law denies UCD protection if the first publication was not made in the EU, for example in the UK.
Thus, while the UCDs are a very useful tool, entrepreneurs should still consider registering the important parts of their products to defend against the imitators given the substantially longer duration of protection for their registered designs (up to 25 years in comparison to the 3 years for UCDs). In the EU, this would be still possible even within a year after first publication (grace period) of the protected products.