Design Protection in Europe

www.bardehle.com 2 Content

5 1. Requirements for design protection in Europe 5 2. Overlap of design law and other IP rights 6 3. Design law in Germany and international design law 6 4. Design protection through registration or use 7 5. Procedure for obtaining registered design rights 8 6. Invalidity proceedings against registered Community or German designs 9 7. Enforcing design rights in Europe (main proceedings) 9 7.1 Competent courts and jurisdiction 11 7.2 Main procedural principles 11 7.3 Claims on the merits in proceedings 13 7.4 Length of proceedings and time limits 14 7.5 Costs 14 8. Enforcing design rights in Europe (preliminary proceedings) 14 8.1 General remarks 15 8.2 Specific procedural principles and timing 16 8.3 Preliminary injunctions and main actions

3 Introduction

A design is defined in the Community Designs Regulation and in the Designs Directive as the outward appearance of a product or a part of a product which results from the lines, contours, colours, shape, texture, materials and its ornamentation. In order to qualify for protection, designs must be new and must have individual character. Furthermore, a design shall not subsist in features of appearance of a product which are solely dictated by its technical function. Designs make a product attractive and appealing; hence they may add significantly to the commercial value of a product and increase its marketability. Design protection is a significant element of IP law. Designs as unique creations with individual character require and deserve protection against imitators just as copyrighted works or trademarks.

4 1. Requirements for design protection in contrast to trademark cases, where the average Europe consumer will compare the asserted mark with other marks he has in mind (“imperfect Design law in Europe consists of European recollection”), the comparison in design law is Key requirements Union design legislation providing for registered performed with the design to be examined and and unregistered Community designs, governed the other designs side by side. In this respect, by Council Regulation (EC) No. 6/2002 of the informed user is “particularly observant and December 12, 2001 on Community designs has some awareness of the state of the prior art, (Community Designs Regulation – CDR) and that is to say the previous designs relating to the national design laws in the 27 Member States product in question”, according to recent case of the European Union, as to a substantial law. degree harmonised by Directive 98/71/EC of the European Parliament and of the Council of October 13, 1998 on the legal protection 2. Overlap of design law and other IP of designs (Designs Directive). Registered rights Community designs are administered by the Office for Harmonization in the Internal Market A product design or an element of a product Protection under other IP rights (Trade Marks and Designs) (OHIM), located design may, at the same time, amount to both in Alicante, Spain, which also administers a design right and qualify for protection under the European Union’s trademark law. In this other IP rights, particularly under copyright presentation, we will cover European and and trademark law. For example, a device German design law. mark may also be registered as a design (if new and individual), and the three-dimensional Key requirements for design protection in appearance of a product, which can be protected Europe are “novelty” and “individual character” as a design, may also be registered as a trade- as established under Article 5 and Article 6 mark (provided it is distinctive). Likewise, CDR, and in the parallel provisions in the logos, in principle, can be protected as designs Designs Directive. For establishing novelty, and trademarks. the new design needs to vary in more then just “immaterial details” from other existing Designs may also be protected under copyright designs. Whether or not it has individual law. Whether they qualify depends on the character depends on whether the design, applicable laws of the Member States of the compared to earlier designs, creates overall the European Union. Contrary to design and same impression on the “informed user”. This trademark law, no European-wide copyright imaginary user is a person with knowledge of law exists and the requirements for copyright designs in the applicable field of activity. In protection have not been harmonised. As 5 a rule, for a design to constitute a “work” 4. Design protection through registration protected under copyright law, the design or use must be the result of a personal intellectual Community designs creation, containing the imprint of its author’s Rights in designs are acquired through personality. This, in principle, implies a higher registration and through use. Community standard of originality than the requirements of designs are protected as registered Community “individual character” for design protection. designs after filing at OHIM and registration, without examination as to the most relevant substantive conditions of protection (novelty, 3. Design law in Germany and interna- individual character). Protection through use tional design law for unregistered Community designs is acquired through the first publication or other use within Hague Agreement The German Designs Act (“Geschmacksmuster the European Union of a design fulfilling the gesetz”) of 2004 has implemented the Designs conditions of protection. First disclosure or Directive, as has been the case in all the 27 use outside of the European Union does not Member States of the European Union. create any rights in Europe. German design law provides for registration of designs. German At the international level, design protection is law does not recognize unregistered designs. Of available through the international registration course, unregistered Community designs are of designs pursuant to the Hague Agreement on also valid in Germany. the International Registration of Designs (the most recent version being that of the 1999 Geneva A registration gives the design proprietor the Act). The Hague Agreement is administered by exclusive right to use the design in the course the International Bureau of the World Intellectual of trade. Protection extends to any later design Property Organization (WIPO). Germany is a creating a substantially identical impression member of the Hague Agreement. The European on the informed user. Protection is available Union is, since 2008, also a member of the Hague regardless of the category of product in which Agreement. Thus, protection for the European the design is incorporated. Registered designs Union as a whole, as well as for all of its Member are protected against both deliberate copying States which belong to the Hague Agreement, may and the independent development of a similar be obtained through the registration of designs at design. Further advantages of a registered the International Bureau of WIPO. In addition, design compared to an unregistered design are the European Union as well as its Member States a longer term of protection (up to 25 instead of are members of the WTO and thus bound by the three years) and a stronger position in case of TRIPS Agreement, which contains minimum infringement litigation. 6 standards on design protection. up to a maximum of 25 years. Unregistered As with a trademark, there are inter- Community designs are protected for three national and national registration years from the date of disclosure of the design procedures for designs: to the public within the European Union.

– national registration with the German Community design protection is a preferred Patent and Trademark Office in Munich method of obtaining protection in Europe – registration as a Community design with because it is easily accessible, relatively the OHIM in Alicante inexpensive, provides unitary protection – international registration with the Inter- throughout Europe and can be enforced national Bureau of WIPO in Geneva Community-wide in specially designated Community design courts.

The Hague System of international registration of industrial designs is applicable among the 5. Procedure for obtaining registered countries party to the Hague Agreement. At the design rights end of 2009, 56 countries were members of the Hague Agreement (important countries are not To register a Community or German design, Substantive requirements for members, such as the USA and China, but it is an application form must be filed, which has protection possible to designate the EU). An international to contain a representation of the design that registration produces the same effects in each is suited for publication and an indication of the designated countries as if the design had of at least one product in which the design been registered there directly, unless protection is intended to be incorporated or to which is refused by the competent office of that country. it is intended to be applied. The goods are To file an international application, no prior classified in accordance with an international national (basic) registration in a Member State classification system established by the of the Hague Agreement is required (contrary to Locarno Agreement, also administered by international trademark registrations under the WIPO. A multiplicity of designs can be included Madrid system). in one multiple application (German designs: up to 100; Community designs: no limit, up to 99 in The Community design gives the proprietor the case of online filing) provided that, in particular, exclusive right to prevent any third party from they have a common (main) class of goods. using an infringing design anywhere within the Filing multiple designs in a single application European Union. A single application grants helps saving fees. Since March 1, 2010 the protection for five years, and protection may German Patent and Trademark Office (GPTO) be renewed for additional periods of five years also offers online application, as does OHIM. 7 After filing the application form, the OHIM be filed online. The application must designate or GPTO examines whether or not the the members of the Hague Agreement in application contains formal defects, whether which the design is desired to be protected. or not the design applied for is eligible for The registration fee depends on the number design protection at all and whether the design of selected countries. Application forms are complies with public policy and accepted available in English and French. principles of morality. If these requirements are fulfilled, the design will be registered and published in the electronic designs gazette. 6. Invalidity proceedings against The first five-year term of protection starts registered Community or German from the date of this publication. If the design designs was filed in Germany and the publication Invalidity proceedings of the registration was the first disclosure Community and German designs are not of the design concerned, it is automatically examined for novelty and individual character protected as an unregistered Community prior to registration. Thus, the potential design for three years through the publication invalidity of an asserted design right is of of the registration of the German design in the utmost importance when it comes to litigation. designs gazette of the GPTO. Different from trademark cases, according to common practice, in more or less all design Substantive requirements for protection infringement cases the accused defendant like novelty and individual character are argues that the design-in-suit is invalid for lack not examined by the GPTO or OHIM. These of novelty or individual character. Even where requirements are examined only in case of validity of the design-in-suit is not challenged, a legal dispute. Requests for declaration of the infringement court is called to assess the invalidity of a registered Community design scope of protection of the asserted design right, may be filed directly at OHIM or by way of a which corresponds with the design’s individual counterclaim in infringement proceedings. character (“concept of reciprocity”). Therefore, Challenges to registered German designs are the degree of individual character must be not dealt with by the GPTO, but may be brought determined in infringement proceedings and before a competent civil court directly or as a is often crucial when deciding whether the counterclaim to an action for infringement. asserted and accused designs produce the “same overall impression”. To register an international design, applications must be filed at the International Bureau of Registered Community designs may also be WIPO. A single application may contain up to challenged by bringing an invalidity action 8 100 separate designs. Applications may also before OHIM. As of 31 May 2010, more than 500 decisions have been issued and more than infringement applies, as a rule, to the entire 60 % of the contested Community designs have territory of the EU, because an infringement been invalidated by the Invalidity Division. committed anywhere in the European Union More than 100 decisions of OHIM’s Board of establishes, in principle, a risk of repeat in- Appeal have been issued so far and approx. fringement for the entire territory of the EU. 50 % of the appealed decisions of the Invalidity Division have been confirmed. Case law from the General Court is very rare to date (July 1, 7.1 Competent courts and jurisdiction 2010), with only three judgments upon appeal against decisions of the Board of Appeal (twice Remedies in cases of design infringement are Competent courts and reversing and once confirming the Board in practice primarily civil remedies (injunction, jurisdiction of Appeal). One case is pending before the damages, etc.), although penal remedies exist European Court of Justice. as well, as do administrative remedies such as border seizure. Although the General Court provided some early guidance on how to interpret, for instance, In Germany, organization of the courts is the requirement of individual character (Article a matter for the 16 German federal states 6 CDR), it will definitely take years before the (“Länder”). Thus, the degree of specialization European courts will have laid down a set of of the courts differs greatly from “Land” rules and principles which is reliable enough to to “Land”. In many infringement cases the navigate through the trials and tribulations of claimant has the choice of the court where European design law. proceedings are brought. He may choose the defendant’s domicile or, alternatively, any court where acts of infringement have 7. Enforcing design rights in Europe been committed or threatened (forum delicti (main proceedings) commissi). Design cases are heard in up to three instances: In first instance by the District While German design rights, as well as inter- Courts (“Landgericht”), in second instance by Main proceedings national design registration covering Germany, the Courts of Appeal (“Oberlandesgericht”) provide protection only in Germany, Community and in third instance by the Federal Supreme designs have “unitary character” and “equal Court (“Bundesgerichtshof”). On the basis of effect throughout the Community” (Article 1 [3] the functional competence within the court, CDR) and therefore cover all Member States of in first instance the case may be brought the EU. Accordingly, it is established case law to a commercial chamber sitting with one that a claim for cease-and-desist (injunctive professional judge and two lay judges. However, relief) on the grounds of a Community design practitioners often choose to file a complaint 9 with the civil chambers that sit with three appeal can be brought to the Federal Supreme professional judges. Court. Only a very small percentage of these motions are successful. If the motion is granted Most German states have concentrated the or the appeal has been allowed by the Court of jurisdiction for design matters on only one Appeal, the case will be taken to judgment by court in each state. Claimants have a tendency the Federal Supreme Court. This further appeal to go to the courts which are known for is for a review on issues of law only. The parties handling a large number of design cases, such have to be represented by a special attorney as the District Courts of Dusseldorf, Hamburg, admitted to act before the Federal Supreme Frankfurt, Mannheim and Munich. Court.

Judgments of the District Courts can be Very rarely, a case may be brought to the appealed to the Courts of Appeal. These courts Federal Constitutional Court (“Bundesver- of second instance basically evaluate whether fassungsgericht”) in Karlsruhe. The Constit- the first instance judgment correctly considered utional Court does not serve as a regular court the facts and evidence, and correctly applied of appeals from lower courts or the Federal the law. However, the appeal instance does not Supreme Court as a sort of “super appellate perform a full de novo trial. New facts may court” on any violation of federal laws. Its only be submitted under certain conditions, jurisdiction is limited to issues of constitutional eg, if the claimant or defendant did not act law, including fundamental individual rights negligently when failing to introduce these such as freedom of speech. facts in the first instance. Therefore, it is very important to assert all the relevant facts and Infringement of Community designs (whether defences already in the first instance. New registered or not) belongs to the competence of legal arguments may be submitted at any time, Community design courts. These are national including in the second instance. courts designated by the Member States to deal with Community design cases. In Germany, in A further appeal to the Federal Supreme principle, the same courts that are competent Court can be allowed by the Court of Appeal for hearing German design cases have also if the matter is of fundamental importance been designated as Community design courts. or can further develop the law. In practice, Community design courts have Community- these requirements are high and are often not wide competence when the case is brought considered to be fulfilled. In consequence, in the Member State where the defendant is only a few cases are heard in third instance. If domiciled or established, or, failing this, where the appeal has not been allowed by the Court the claimant is domiciled or established. If 10 of Appeal, a special motion for admitting the neither claimant nor defendant are domiciled or have an establishment in the European Discovery is generally not available in German Union, the Community design court in Alicante court proceedings. Any facts which cannot (the seat of OHIM) has Community-wide be proven by documentary evidence may be competence. In addition, actions may also dealt with in a taking of evidence by hearing be brought before the courts of a Member witnesses in oral testimony. Rarely, the courts State where acts of infringement have been may require a design expert for considering committed or are threatened. In that situation novelty or individual character of the asserted the competence of the court is limited to design; this may especially happen in case of the territory of the Member State where it is designs in densely occupied fields of design established (forum delicti commissi). where even the average observer with an open mind to questions of design will find it difficult to assess differences as against the existing 7.2 Main procedural principles design corpus, that it can be appropriate making use of an expert opinion. Many cases, however, An infringement case is usually started by are decided on the basis of written presentations Main Procedural Principles sending a warning letter with a cease-and-desist by the parties and in subsequent oral hearings declaration containing a contractual penalty in which the presiding judge explains the views in case of violation. Should the matter not be of the court and gives the parties an opportunity resolved as a result of such a warning letter, the to present their arguments and observations. proprietor of a trademark, design or copyright Formal taking of evidence is rather an exception will usually file proceedings for a preliminary in design infringement proceedings. injunction (see below).

A complaint must be filed at a competent District 7.3 Claims on the merits in proceedings Court. The parties must be represented in infringement proceedings by an attorney- The legal tools at the disposal of the claimant Claims for cease-and-desist at-law (“Rechtsanwalt”) admitted to a German in infringement proceedings include claims bar, optionally cooperating with a patent attorney for cease-and-desist (injunctive relief), for (“Patentanwalt”). Non-EU nationals who act as destruction of the infringing products and for claimants in proceedings brought before German detailed information and rendering of account courts must, upon application by the defendant, about infringement activities by the defendant, give security for costs and lawyers’ fees. as well as for damages which may be calculated The claimant has to present evidence of all facts based on the accounting rendered (account of which are relevant for finding infringement. sales, profits etc.).

11 calculation according to the infringer’s profit is Furthermore, and following the being applied more and more frequently, since implementation of the IP Rights the case law now allows the infringer to deduct Enforcement Directive (2004/48/EC) costs and expenses from the sales figures only if into German law, the German Design (and to the extent that) they can, in exceptional Law provides: cases, be directly attributed to the objects infringing the IP right. – claims for preservation of evidence; – claims for recall and definitive removal As a consequence, only the variable costs of the of infringing products from the channels manufacture and marketing of the product may of commerce; be deducted from the infringer’s amount of sales – claims for securing damages made. Additionally, in determining the amount (submission of bank, financial of profit made from the infringement, the or commercial documents) in certain infringing party cannot claim that such profit circumstances; is partly due to its own particular distribution – claims for the publication of judicial activities. This means that general overhead decisions; costs are no longer allowed to be used to reduce – claims for inspection; the infringer’s profits. However, the question – an extension of existing claims for remains whether the infringer‘s profits are destruction of counterfeit goods and caused by the design infringement or by other implements principally used in the circumstances, like good client relationships, a creation or manufacture of infringing dominant market position, effective advertising goods; and or good service. The same question arises if – an extension of existing claims for the design owner claims his lost profits, which information. would frequently permit the highest damages awards. Here, an additional obstacle occurs if the market included other competitors than the claimant and the defendant, so that a third As regards damages, the claimant may choose party could to some extent have replaced the between three alternatives for calculating infringing sales of the defendant in the absence damages: lost profits, infringer’s profits, or of defendant‘s infringing activities. reasonable royalty. Punitive damages are not awarded. While a reasonable royalty When actions for infringement of Community typically provides the least burdensome of designs are brought, Article 89 CDR provides these alternatives for calculating damages, the for the sanctions of injunctive relief, the 12 seizure of infringing products and the seizure The first instance proceedings start with the of materials and implements predominantly claimant filing a comprehensive complaint, used in order to make the infringing stating all relevant facts of the case. The products. In addition, the courts apply all defendant then has to reply within about the sanctions provided for in the law of the six to eight weeks. An oral hearing will be country where the infringement took place. If held within another one or two months. The a German Community design court deals with decision is typically rendered about one month infringements committed in Germany, the after the oral hearing. There is no automatic sanctions applicable in cases of infringement of enforcement of the decision if an appeal is German designs are applicable. lodged against it. A special order may authorize preliminary enforcement.

7.4. Length of proceedings and time An appeal must be lodged within one month limits from the receipt of the written first instance decision. A comprehensive reasoning has to The length of proceedings in design be filed within a further month. The Court of infringement cases may differ from court to Appeal may extend this deadline. Typically, the court and may vary with the court‘s work load. appellee has a few months to respond to the Main proceedings for design infringement are appeal reasoning. A reply of the appellant is likely to take between six and nine months in then to be expected about two months later. An first instance, from filing of the complaint until oral hearing will be held about three months rendering of the judgment. Depending on the later. The decision is rendered within one more practice of the court, there may be one or two month. There is no automatic enforcement of hearings in a typical case. If the court orders the decision if a further (legal) appeal is lodged. the taking of evidence, there may be one further A preliminary enforcement of the decision may session of the court for hearing witnesses or be allowed, but its temporary execution usually experts, and in that case the proceedings will requires the deposit of a security. typically take another three months. Appeal proceedings are likely to take approximately A further appeal on points of law can be lodged nine to twelve months on average, with usually within one month from the notification of the only one court hearing. If evidence is taken second instance decision. A comprehensive at the appeal stage, approximately three reasoning has to be filed within one further months should be added. If a further appeal month. The Federal Supreme Court may extend to the Federal Supreme Court is admitted, the this deadline. proceedings before that Court would likely take one and a half to two years. 13 7.5 Costs 8. Enforcing design rights in Europe (preliminary proceedings) Costs The cost risk in design litigation usually Preliminary proceedings includes fees for both parties’ attorneys and Enforcing IP rights in Germany including (optional) patent attorneys, plus the court fees cross-border litigation has a long-standing and expenses for witnesses, travelling, etc. It is tradition, particularly by way of proceedings for difficult to give a general estimate for litigation a preliminary injunction. Notably the interim costs at first or second instance. To give an enforcement of registered rights is very popular idea of the order of magnitude of the litigation amongst rights owners. What follows applies costs, one should focus on statutory lawyer’s equally to the enforcement of German design fees, according to the German statutory fee rights and of Community design rights. regulation (“Rechtsanwaltsvergütungsgesetz”) and court fees only. These fees are calculated on the basis of the value in litigation, which 8.1 General remarks reflects the claimant’s interest in the disputed Preliminary injunction matter. The value in dispute is fixed at the German courts are prepared to grant a ex parte court’s discretion, but is essentially based on preliminary injunction ex parte if the petitioner the parties’ sales figures. A typical case may be shows evidence as to ownership and validity in the range of EUR 250,000. The sum of fees of his design right, sufficient likelihood of for both parties’ representatives plus the court infringement and urgency of the matter. The fees represents the statutory cost risk, because petitioner may file declarations (“affidavits”) as the losing party has to pay the costs of the evidence in the specific procedure. Moreover, winning party as well. The statutory cost risk is German courts also tend to grant preliminary approximately EUR 25,000 in first instance and injunctions on the grounds of unregistered approximately EUR 30,000 in second instance. rights if specific requirements are fulfilled. This applies, in particular, to the unregistered As most other firms in design and other IP Community design. matters, BARDEHLE PAGENBERG generally bills on an hourly basis, which can, depending The petitioner may assert claims for cease- on the actual work load, lead to attorney fees and-desist as well as for the disclosure of which may be higher than the attorney fees information about the infringing act and according to the statutory fee regulation. Since a preliminary seizure order. Following the the losing party only needs to reimburse the implementation of the IP Rights Enforcement statutory fees, the winning party may still incur Directive (2004/48/EC) into German law, an amount of costs which is not reimbursable. preliminary proceedings, in general, allow 14 to assert claims for preservation of evidence, Preliminary relief may be granted by the court inspection or securing damages (submission of ex parte without first holding a hearing to which bank, financial or commercial documents). the alleged defendant would be called as well. In practice, ex parte injunctions are common, This preliminary enforcement, however, renders and a hearing will be called primarily only when petitioners potentially liable for any damage the court considers that there may be elements suffered by the defendant as a consequence of that need to be discussed prior to issuing the the preliminary enforcement if the case is later preliminary order. Once the court’s order has decided against the petitioner. For this reason, been issued ex parte, the petitioner must serve the petitioner is sometimes ordered to provide the injunction within another month in order a bond (cash or bank guarantee) to cover this not to lose the rights flowing from the order. risk before the preliminary enforcement can Furthermore, as the preliminary injunction does take place. The amount of this bond will be not have permanent character, the petitioner is determined by the court, depending on the required to file for a main action if the defendant value in litigation and potential damages which does not accept the interim injunction as final. may be caused by preliminary enforcement. The potential defendant, who may be aware of an impending request for preliminary 8.2 Specific procedural principles and relief, for example as the result of having been timing served with a warning letter, may consider the option of filing a so-called protective brief In Germany, many contentious matters are (“Schutzschrift”) with the German courts. This Specific procedural principles decided in preliminary proceedings. Decisions may – and often will – cause the court to refuse and timing of the District Courts may be appealed to the to issue an injunction ex parte. Courts of Appeal. There is no further appeal in such cases to the Federal Supreme Court. Once a preliminary injunction has been issued by the court, the alleged infringer is A request for a preliminary injunction before obliged to comply with the injunction, but has an infringement court requires the matter to be the opportunity to file an objection with the considered “urgent”. Therefore the claimant must court having issued the injunction in order to request preliminary relief shortly after becoming achieve a review and possibly a revocation of aware of the allegedly infringing activity, one the preliminary injunction. The decision taken or two months at the utmost, calculated from on review as well as any preliminary judgment the time when the right holder first obtained issued after an oral hearing may be appealed to knowledge of all the relevant circumstances. the Court of Appeal. 15 8.3 Preliminary injunctions and main actions

Concept of enforcing IP rights The concept of enforcing IP rights in Germany by way of proceedings for a preliminary injunction is, for obvious reasons, very attractive for the rights holder, as demonstrated by numerous decisions taken by German courts of first instance and the appeal courts. How, then, does a preliminary injunction compare to a main action? The fundamental conceptual difference between the two proceedings is that main proceedings provide for a conclusive and final resolution of the matter (including information on account of profits and damages), whereas, in contrast, the preliminary injunction focuses on a preliminary and selected result with the consequence that infringements are stopped immediately. In broad terms, a preliminary injunction does not require extensive evidence (such as hearing of witnesses), while complex cases should be brought to court by way of a main action.

All rights reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means, mechanical, photocopying, recording or otherwise, without prior per- mission of the publishers.

Nothing in this publication constitutes legal advice. BARDEHLE PAGENBERG assumes no responsibility for information contained in this publication or on the website www.bardehle.com and 16 disclaims all liability with respect to such information. 17 Contact

München Galileiplatz 1 81679 München T +49.(0)89.928 05-0 F +49.(0)89.928 05-444 [email protected]

Düsseldorf Breite Straße 27 40213 Düsseldorf T +49.(0)211.478 13-0 F +49.(0)211.478 13-31 [email protected]

Paris 10 Boulevard Haussmann 75009 Paris T +33.(0)1.53 05 15-00 F +33.(0)1.53 05 15-05 [email protected]

Barcelona Avenida Diagonal 420, 1º, 1ª 08037 Barcelona T +34.93.4 57 61 94 F +34.93.4 57 62 05 [email protected]