Main Features of the Harmonized European Design Law

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Main Features of the Harmonized European Design Law

MAIN FEATURES OF THE HARMONIZED EUROPEAN DESIGN LAW

Tibor Bezzegh

University of Miskolc Faculty of Law and Politics, Deák Ferenc Doctoral School

Trainee lawyer, Verőci, Ormai and Co. Attorney at Law Office

1122 Budapest, Maros u. 22. Hungary

Field of research: Legal protection of product trade dress

Abstract: Product design has basic importance in highly competitive markets. Well designed, aesthetic products are favoured by buyers. Thus design is considered a marketing tool most radically in the USA. It is obvious that companies and authors are interested in effective legal protection against illegal imitation. The International Chamber of Commerce (IIC) estimates that imitations and counterfeit products account for roughly 5-8 per cent of world trade and the direct and indirect damage could be as much as 60-100 billion US dollars per year. A sad consequence is also the 70.000 jobs that are lost each year.[1] By the end of the 19.th century countries recognized that design protection on a national level is incapable of stopping illegal activity. For this reason international agreements such as the Paris Convention in 1909 were signed. The need for harmonizing design law in Europe appeared in the 60’s. The European Court also faced the problem of market distortion caused by intellectual privilege in its practice. The European institutions issued the Design Directive in 1998 (98/71/EC) to harmonize the most substantial elements of national design laws throughout Europe after long theoretical debates. The task is current as the Commission may carry out an analysis within 3 years of the implementation deadline (28.10.2001.) and that expires this year. The Commission has already issued a proposal for an amendment on the Directive in September 2004 concerning spare parts.

I aim to give an outline of the main characteristics of the harmonization directive in my essay focusing on the definitions compared with the notions of former national design laws. I will also refer to the questions of copyright protection for designs since the relationship between the two forms of protection is regulated by the directive. However I will not examine in this article the Community Design Law (Regulation No 6/2002) what is based on the notions of the Directive but contains detailed ruling on the transfer of rights, procedure etc.

1. Protected subject matter

The most important part of any design law is the definition of the product or article that is protectible. Distinction can be made on the basis of the significant elements of the different notions. Some definitions require industrial applicability, no handicraft item can be subject of protection, or only visually recognizable features are accepted. The former Registered Design Act of the UK from 1949 is a good example of the old fashioned industrial-ornamental design law philosophy. Only visible features were under protection, which were also industrially applicable. The Directive follows the new trend by giving a very broad definition:

According to the EU Directive Art. 1. a) design is: “ .. the appearance of the whole or a part of a product resulting from the features of, in particular the lines, contours, colours, shape, texture and/or materials of the product itself and/or its ornamentation.” A product is defined as any industrial or handicraft item, including parts, packaging, get-up, graphic symbols but excludes computer programs (computer graphics and icons aren’t expressly excluded). No shape is registrable if its form dictated solely by technical functions.

The former German design law (Geschmackmustergesetz) used a very similar definition to the one cited above. A design is a two or three dimensional material form or structure. Features of a product which may be protected include its form, style, structure etc. The feature must be recognizable by human sense (including tactile sense).

The French intellectual property code (1992) Vol. 5. contains the rules of design protection. Protectible was any new three dimensional shape. Wide range definition is used by the French code. Industrial applicability is not a need but any shape dictated by its function and patentible designs are excluded.

The broad definition of the design directive only applies to a non taxative list of the protected subject matter which making it very flexible. Industrial applicability is not a need, also handicraft items are covered. Reproductability is not required though without technical ability to some kind of mass production may considered an article of fine arts which is protectible by other forms of legal protection (mainly by copyright). The lack of industrial applicability requirement is also a characteristic of the widely respected design definition of the ICSID[2]: The industrial design is such a creative activity which aims to define the design quality of the industrially produced goods. These formal qualities are not only external features but basically structural and functional connections that create a coherent integrated system from the view of both designers and users.

The WIPO Model Design Law /section 2(1)/ from 1971 also contained a quite wide scale definition on design[3]: “any composition of lines or colours or any three-dimensional form,... provided that such composition or form gives a special appearance to a product of industry or handycraft or can serve as a pattern for (such) a product.” The protected subject matter pursuant to this definition is the individual appearance of the product, so that only an eye-appeal test is required. Design is defined as an aesthetic creation. A technically functional element is protectible if it also has some aesthetic character and the same technical result could be reached by another shape.

As mentioned above the exclusion for any shape dictated by its (technical or other) functionality used to be a characteristic of all national laws already before harmonization. Sometimes it is hard for the courts to decide whether a feature is technically determined. Four methods of examination is are used in the legal practice of courts on the functionality problem[4]:

1. Multiplicité des formes test (France and Belgium) examines if the designer could have chosen another form.
2. Examination of the presumed intention of the designer (UK).
3. Examination whether alternative design would have been possible with the same function.
4. Examination of the presumed intention of buyers: why their decision to buy the article were made.

Pursuant to the Directive Art. 7. (2) an exception for mechanical connections is given. “A design right shall not subsist in features of appearance of a product which must neccessarily be reproduced in their exact form and dimensions in order to permit the product in which the design is incorporated or to which is applied to be mechanically connected to or placed in, around or against another product so that either product may perform its function.” It is kind of exclusion that was unknown in the continental regimes was borrowed from the UK’s Act of 1988. (Art. 213 (3) b) i.) In the English law terminology this exclusion is called the exclusion for “must fit features” that are clearly distinct from “must match features”.[5] The so called must match features are excluded effectively by the repair (or spare part) clause (Art 14. and 18.) of the Directive. The most debated part of the Directive is the so called “repair clause” exclusion for spare parts. A spare part is a component of a complex product (protectable under the Directive) the purpose of which is to repair the original appearance of the product “so as to restore its original appearance”. The neccesity to restrict the legal protection of such parts is originated from the fundamental idea of the EU to liberalise the movement of goods in the internal market. In the practice of the European Court of Justice it was ruled that the exercise of an exclusive right (design right) may be prohibited by the EC Treaty Art. 86. (Volvo and Renault cases)[6] The Art. 14. is called a “freeze plus formula” which stipulated that Member States may maintain existing laws, any change permitted only in the way of liberalisation of the spare part market.The European Policy Evaluation Consortium analized this issue for the DG Internal Market.[7] The EPEC set out four alternatives for future legislation: 1. Liberalization. No design protection of spare parts (at all). 2. A system seeking a short term of design protection, the usual term of protection could be reduced to 10 years. 3. A remuneration system for the use of protected designs, including the appropriate level for remuneration. The independent spare part producers may pay a resonable remuneration to the right holder. 4. Combination of the above mentioned systems. The Commission carried out an analysis according to Art. 18.[8] In most European countries remained design protection for spare parts. The Commission found that the prices of spare parts are lower where they are not design-protected. According to the proposal of amendment of the directive spare parts would be excluded from design protection. However for consumer protection purposes the MS-s shall ensure information is given to the buyers of the origin of spares. Experts expect enhancement of spare part market after liberalisation.

2. Conditions of registration:

Every local system required that a registrable design be novel and also required some originality. Distinction can be made between objective, subjective, absolute and relative novelty.[9] From the view of a creator, a design is new if it is not an imitation of existing forms known to him is called subjective novelty. It corresponds to a large extent, if not completely, to originality in copyright law, that is that the creator is protected even if the same creation had already been made by another person, unless creator was aware of the first creation. Some call this “copyright approach” because of the theoretical and effective similarities.

From the view of the public, novelty is objective if no identical design was made available to the public without limitations. This corresponds with a generally accepted definition of novelty in patent law, and one speaks therefore of a “patent approach.” However both approaches can have a number of variations: the search for previous products may be limited to the country where protection was required or worldwide. Such a creation may be limited by time, it may be also be limited in regard to manner in which a previous creation was made available to the public, these forms are called relative novelty. Everything which was available to the public no matter where, when and how is excluded from the protection and refers not only previously registered designs but includes all existing forms is named by experts as objective-absolute novelty. This kind of absolute novelty requirement was in force in most mediterranean and former communist countries and it was dictated by the above mentioned WIPO Model Design Law.

Subjective-relative novelty or local novelty was required by the German and Benelux design law. These countries applied an examination system from the view of the relevant local trade circles. A very similar subjective-relative criteria is used by the Design Directive. Art. 6. of the Directive makes clear that public availability means the knowledge of the specialised circles within the territory of the community. It is my opinion that today in the age of the internet, when every part of the world is connected, this kind of local knowledge is questionable. Moreover the specialized circle of designers is relatively small and designers keep close contact with each other in international organizations like ICSID. Under the Directive not only novelty but also individual character is required. This requirement is the copyright approach element of the law. This regime is similar to the former German and French law. Both German and French laws required originality that originates from copyright law. This kind of originality is different from the individual character requirement since it means only that any good must be a personal intellectual creation. According to the originality requirement a shape which is formed without human creativity is unprotectable. An example (of the practice of the Hungarian Supreme Court) can be the case of a tile pattern of which was formed by the production machine automatically due to technological reasons. The individual character in accordance with the Directive means some kind of distinctiveness. The Green Book on design harmonization in its original form suggested the use of the notion distinctive character in the new law instead of individual character because it would have been more straightforward.

The double criterion of novelty and individuallity was critized by some authors because of its controversary with international agreements and logical reason.[10] The TRIPS agreement Art. 25. requires only one criterion: novelty or individual characteristic/ originality is applicable. It seems that the definition of individual character is interpretable as the mere definition of novelty. Sometimes it is hardly imaginable that a feature which has individual character (in the meaning of the Directive) is not novel. However the two level examination does not cause problems in practice. The courts use a four level test to decide upon individuality:[11]

1. The judge examine the shape from the aspect of the relevant (it depends on the kind of product) circle of end users.
2. The judge estimates the probable level of the user’s knowledge.
3. Judge examines the cognizability level within the relevant territory.
4. The new design is compared with the formerly known shapes.

3. Duration of protection

The period of protection was ensured by national laws differed on a wide scale before harmonisation. At the lower end was Hungary where maximum duration was only 10 years while at the higher end, in France, 50 years of protection was awarded. The latest modification of the Hague Agreement declared 15 years as a minimum. The unified duration now in the EU countries according to the Directive is 25 years. There is still no accordance between the experts on the ideal length of protection. The optimal term depends mostly on the type of product. It’s obvious that a textile industry article does not need as long a protection as furniture. Problems occur on the market when the right owner take an unfair advantage of the long duration of exclusivity.

4. Design- copyright interface

Copyright is an equally important form of protection like specific design law. According to the opinion of some experts in some fields of production (e.g. textile industry) 99 per cent of designs which in practice have not been deposited are protected by copyright.[12] The advantages of copyright compared with registered design law are as follows: automatic and quick, runs form the creation without any formalities, broad scope protection (design protection is often restricted to a single product) copyright covers adaptations. Copyright provides a long term protection- 70 years post mortem auctoris[13], no novelty is required, and is available free of charge. The only unquestionable disadvantage of this form of protection the difficulty of proof of priority (time of creation). A unique solution exists for the latter problem in Hungary: the quasi registrability of artistic works. A board „jury” recognised by the state examines the goods and registrate them if the requirements are fullfilled. The cost of examination is approximately half of the design registration fee. This “quasi registration” often helps the authors to prove their priority before the courts.

The design directive sets the principle of total cumulation (or overlap) of design protection with national copyright. (Art. 17.) It means that a design may be eligible for copyright protection and so the shape is protectable on both grounds simultanously. Three slightly different systems emerged prior the Directive and two of them have remained different.[14] Total cumulation: in France and Benelux countries (and e.g. in Hungary). This system is based on the „unité de’l art” theory which means that fine arts and applied arts is indistinguishable. Partially cumulative protection exists in Germany where a higher level of originality and some artistic merit is required. Non-cumulative system was in force in Italy until the implementation of the Directive. Italy excluded designs from copyright protection since separability of artistic value and industrial character was required. The non harmonised originality threshold and other differences between Member States cause inequalities in the EU and distort the single market.[15] The problem occurs in the total cumulative countries where “unité del’ art” principle is followed because it is not unusual to claim copyright protection for spare parts. The spread of this formula in Europe can lead to the deprivation of the liberalisation of spare parts market, the new aim of the harmonized design doctrine.[16]

5. Summary

In my essay I have shown that the notion of design follows from the foregoing national definitions and in many aspects is similar to the ICSID definition of design. A broad scale of articles, also handicraft items, component parts and complex products are protectable under the Design Directive although any shape dictated solely by its technical function is excluded. I mentioned the so called spare part issue at relatively length since the Commission issued its proposal for the amendment of the Directive relating the spare parts this September. The proposal of the Commission would exclude from the protection the component parts which are produced for the purpose of restoring the original appearance of a complex product in order to liberalise the common market.