On February 16, 2012, the European Court of Justice rendered a very important decision relating to European design law: this decision, like any other decision rendered by the European Court of Justice, binds all the national courts of the 27 European Union Member States.
You may have access to an English copy of this decision thanks to the following official website: http://curia.europa.eu (Case C‑488/10 Celaya Emparanza y Galdos Internacional SA v Proyectos Integrales de Balizamientos SL).
In this Case, the Court rules:
“Article 19(1) of Council Regulation (EC) No 6/2002 of 12 December 2001 on Community designs must be interpreted as meaning that, in a dispute relating to infringement of the exclusive right conferred by a registered Community design, the right to prevent use by third parties of the design extends to any third party who uses a design that does not produce on informed users a different overall impression, including the third party holder of a later registered Community design.”
The problem considered by the Court involves defining the ‘third parties’ against which, under European Union law currently in force, the holder of a registered design may bring infringement proceedings.
This case was for the Court the first occasion to establish whether the fact that the defendant independently registered its own design after the applicant’s design had been registered is irrelevant or whether, in fact, the applicant must first seek from OHIM (the Community Trademark and Design Office) a declaration that the defendant’s design is invalid before it can bring infringement proceedings.
1 – Legal context
The question referred for a preliminary ruling in this case concerns the interpretation of Regulation (EC) No 6/2002 (also ‘the Regulation’) on Community designs.
The purpose of the Regulation is to establish a system for registering designs that is as straightforward and simple as possible.
Article 19(1) of the Regulation sets out the rights that a registered design confers on its holder:
‘A registered design shall confer on its holder the exclusive right to use it and to prevent any third party not having his consent from using it. The aforementioned use shall cover, in particular, 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.’
Article 52 of the regulation provides that, as a rule, applications for a declaration of invalidity of a registered design are to be made to OHIM only. On the other hand, under Article 81, the (national) Community design courts (in France, it is the Tribunal de Grande Instance of Paris) have jurisdiction to hear infringement actions. However, Article 81 provides that the design courts also have jurisdiction to hear applications for a declaration of invalidity where such applications are made by way of counterclaims in infringement proceedings.
Article 85(1) of the regulation provides as follows:
‘In proceedings in respect of an infringement action or an action for threatened infringement of a registered Community design, the Community design court shall treat the Community design as valid. Validity may be challenged only with a counterclaim for a declaration of invalidity…’
2 – The facts, the main proceedings and the questions referred
On 26 October 2005, the applicant in the main proceedings, Celaya Emparanza y Galdos Internacional SA (also ‘CEGASA’), registered a Community design for road markers. These are objects, generally made of plastic, which are used as signs to indicate construction sites, roadworks etc. In late 2007, the defendant company, Proyectos Integrales de Balizamientos SL (also ‘PROYECTOS’) placed on the market a product which, according to CEGASA, infringes its registered design. CEGASA therefore served an extra-judicial demand on PROYECTOS calling upon it to cease marketing the product in question.
PROYECTOS refused to comply with CEGASA’s demand and, on 11 April 2008, registered a design for its own product with OHIM.
CEGASA therefore decided to bring infringement proceedings against PROYECTOS before the referring court. In those proceedings, PROYECTOS filed a counterclaim seeking a declaration of invalidity in relation to CEGASA’s design.
PROYECTOS considers itself in any event to be ‘protected’ by its own registered design and, therefore, takes the view that CEGASA cannot bring infringement proceedings until it has obtained from OHIM a declaration that PROYECTOS’s design is invalid. In its view, the action brought before the national court should, therefore, be dismissed as inadmissible or, in any event, dismissed without any examination as to the substance.
Against that background, the referring court stayed the proceedings and referred the following question to the European Court of Justice for a preliminary ruling:
“In proceedings for infringement of the exclusive right conferred by a registered Community design, does the right to prevent the use thereof by third parties provided for in Article 19(1) of … [the] Regulation … extend to any third party who uses another design that does not produce on informed users a different overall impression or, on the contrary, is a third party who uses a subsequent Community design registered in his name excluded until such time as that design is declared invalid?”
3 – Procedure before the Court
This is one of the first cases in which the Court has been asked to interpret Regulation No 6/2002, it being said that the Regulation doesn’t contain any rule which refers expressly to whether it is possible for the holder of an earlier registered Community design to bring infringement proceedings against the holder of a later registered Community design.
However the Court underlined that the wording of Article 19 (1) of the Regulation doesn’t make any distinction on the basis of whether the third party is the holder of a registered Community design or not.
To answer to the question asked by the referring Court, account must be taken of the substantive features of the procedure for the registration of Community designs set by the Regulation.
Indeed, the Court underlined that the procedures for registering designs are far simpler and more ‘expeditious’ than those governing the registration of trade marks. Two differences merit particular mention. Firstly, OHIM permits a design to be registered following a merely formal, but not a comprehensive, check of the application for registration. Secondly, in contrast to the procedure which applies to trade marks, in the case of designs, the Regulation does not provide for a stage between the filing of the application and registration itself during which other parties may raise objections to the registration.
In other words, according to the Court and indeed to the practice of OHIM, the registration of designs takes place almost automatically.
The facts of the case in the main proceedings provide a very clear illustration of this. PROYECTOS was able to register its own design without any difficulty after CEGASA had taken extra-judicial steps to halt the marketing of PROYECTOS’ product. If the procedure for registering designs allowed for objections to the registration to be raised, CEGASA would in all likelihood have objected, and OHIM would, therefore, have been able to adopt a position on the matter, and either register or refuse to register the PROYECTOS’ design.
In those circumstances, only an interpretation of the term “any third party” within the meaning of Article 19 (1) of the Regulation as encompassing the third party holder of a later registered Community design is, according to the European Court of Justice, capable of ensuring attainment of the objective of effective protection of registered Community designs pursued by the Regulation, as well as the effectiveness of infringement proceedings.
The Advocate General in his opinion also noted that the fact that designs can be easily and swiftly registered goes hand in hand with a particularly high risk of abuse, which is certainly greater than in the case of trade marks.
The considerations of the Court set out below should, therefore, be strictly confined to the design sector and cannot be regarded as also being automatically applicable to trade marks.
4 – The question referred: whether it is possible to bring infringement proceedings without first obtaining a declaration of invalidity in relation to the later design
The answer of the European Court of Justice is yes.
By the question referred, the Court was asked to clarify whether the holder of a registered design may bring infringement proceedings directly against the holder of a later registered design or whether, in fact, it may do so only after obtaining a declaration of invalidity in relation to the second design.
Two aspects of the principle of legal certainty were at issue in this matter, it being said that in both cases, a registered design does not ultimately confer complete protection on its holder. In the first case, if it is necessary to obtain a prior declaration of invalidity in relation to the later design, the status of applicant’s design is undermined, even though it was registered first. In the second case, if the holder of the earlier design is allowed to bring proceedings directly, the level of protection of the later designed is diminished, even though it was properly registered. Therefore, the choice of one or other interpretation is a choice between two essentially equivalent rights.
What seemed to the Court to be decisive for the purpose of arriving at a conclusion was the fact that there would be a risk that the system could be seriously compromised if the holder of a registered design were required to seek a declaration of invalidity in relation to another design that was registered subsequently before he could bring infringement proceedings against the holder of the latter design.
Indeed as pointed out above, unlike a trademark or patent, a design is registered without any review of the substance of the application. In other words, hypothetically, when faced with the threat of the instigation of infringement proceedings by the holder of a registered design, a person who, in bad faith, had engaged in acts of infringement without having registered any design could always proceed immediately to register a design, thereby compelling the holder of the first design to obtain a declaration of invalidity in relation to the latter design before being able to bring infringement proceedings. Indeed, the second design could even be registered after infringement proceedings had been initiated. Furthermore, even after the ‘defensive’ design had been declared invalid, there would, in principle, be nothing to prevent the infringer from registering a new design which differed marginally from its predecessor and using it to continue marketing a product that was fundamentally the same.
It was, therefore, clear for the Court that requiring an action for a declaration of invalidity to precede the instigation of infringement proceedings could enable a person acting in bad faith to take advantage of the system, by employing delaying tactics and actually impeding the effective protection of registered designs. In that case, the effectiveness of European Union design legislation would be seriously undermined. It should also be borne in mind that legal actions such as those designed to bring to an end acts of infringement must, by their very nature, be capable of being concluded particularly swiftly.
Based on these considerations, the Court interpreted Article 19(1) of the Regulation as permitting the holder of a registered design to enforce his own rights, including in relation to a person who uses his own later registered design, without first being required to obtain a declaration of invalidity in relation to the second design.
5 – The problem of the legal position of the infringer’s registered design
It must be acknowledged that the interpretation of the Regulation given by the Court gives also rise to an unresolved problem.
Indeed, if the holder of the earlier design is successful in infringement proceedings against the holder of a later design, but then decides not to seek a declaration of invalidity in respect of that later design, the legal position of the later design remains, so to speak, equivocal.
On the one hand, the product in question can no longer be marketed. On the other, since the national court has not declared the later design invalid, as it has no jurisdiction to do so, that design remains valid from a formal point of view, and, in theory, its holder could use it, albeit no longer to market the relevant product, at least to bring proceedings against other manufacturers and/or holders of registered designs.
However, this is more an apparent than a real problem.
In the first place, it is unlikely that the holder of the later design would use it, after being unsuccessful in infringement proceedings, for the sole purpose of damaging other economic operators. Since his product could no longer, in any event, be marketed, a person in that position would have no interest in instigating legal actions of that nature and claiming for damages.
Moreover, if there was in fact a substantial similarity between the infringer’s design and that of a third party, the likelihood is that there would also be a similarity with that of the holder of the earlier design, who was the applicant in the original infringement proceedings. In those circumstances, it is far more likely that the latter would take action against the third party, as he would have a very real interest in doing so.