Spare parts status – registered designs
We are pleased to inform that we have successfully completed two proceedings regarding the sale of aluminium rims by our client, in relation to which two big car companies claimed that it constitutes an infringement of Community design rights, as the rims corresponded to designs registered in favour of those companies.
From the very beginning in the court proceedings we presented a position that the rims are subject to the so-called repair clause, so their trading is legal. We believed that the distribution of rims corresponding to registered designs met all the requirements covered by the above-mentioned repair clause.
However, the jurisprudence of German courts determined that aluminium rims are not covered by Article 110 of the Regulation of 12 December 2001 on Community designs (“Regulation”), i.e. for a design which constitutes a component part of a complex product used for the purpose of the repair of that complex product so as to restore its original appearance.
The fundamental argument was that a rims’ design is not determined by the appearance of the whole vehicle, consequently it is not necessary to use a rim corresponding to the original design, as it is in the case of a lamp or a bumper. However we claimed the above limitation does not result from Article 110 of the Regulation, but could only be derived from the Preamble of the Regulation.
The CJEU finally looked into the interpretation of Article 110 of the Regulation. In the judgment of 20 December 2017, case no. C-397/16 and C-435/16, the Court ruled that car rims are covered by the repair clause. The Court emphasized that “the protection granted by Community designs may cause adverse effects (…). In that context, the purpose of the ‘repair’ clause is to avoid the creation of captive markets in certain spare parts and, in particular, to prevent a consumer who has bought a long lasting and perhaps expensive product from being indefinitely tied, for the purchase of external parts, to the manufacturer of the complex product” (point 50). The CJEU stated that the repair clause does not apply only to those parts whose design is conditioned by the appearance of the whole car (such as lamps, doors, etc.) (point 34 of the judgement).
Nevertheless, the applicability of the clause requires the existence of certain circumstances. Firstly, the design is identical to the design of the rim originally installed in the car by the manufacturer. The CJEU held that “the possibility of relying on the ‘repair’ clause requires that the use of the component part be necessary for the repair of a complex product that has become defective, inter alia due to the lack of the original part or damage caused to it” (point 69 of the judgement). However, “any use of a component part which is not for the purpose of restoring a complex product to the appearance it had when it was placed on the market” is excluded (point 77). The CJEU ruled, that “any use of a component part for reasons of preference or purely of convenience, such as, inter alia, the replacement of a part for aesthetic purposes or customisation of the complex product is therefore excluded from the ‘repair’ clause” (point 70).
The last part of the judgment is focused on the manufacturer’s and seller’s obligations concerning the use of rims. The CJEU noted that the manufacturer and seller are incapable of guaranteeing that the purpose of the use will be solely to repair and restore the original appearance of the car (point 85). Nevertheless, both are obliged to act with due diligence and “in particular, they must, first of all, inform the downstream user, through a clear and visible indication on the product, on its packaging, in the catalogues or in the sales documents, on the one hand, that the component part concerned incorporates a design of which they are not the holder and, on the other, that the part is intended exclusively to be used for the purpose of the repair of the complex product so as to restore its original appearance” (point 86). “Next, they must, through appropriate means, in particular contractual means, ensure that downstream users do not intend to use the component parts at issue in a way that does not comply with the conditions prescribed by Article 110(1) of Regulation No 6/2002” (point 87). “Finally, the manufacturer or seller must refrain from selling such a component part where they know or, in the light of all the relevant circumstances, ought reasonably to know that the part in question will not be used in accordance with the conditions laid down in Article 110(1) of Regulation No 6/2002” (point 88).
The CJEU’s judgement is certainly a significant step forward in the interpretation of the “repair clause”. Nevertheless, a number of details still need to be clarified. In our opinion, strict obligations imposed on the sellers of rims, which do not have a straight forward legal framework, are particularly questionable.
Last week a judgment regarding one of the most well-known trademarks in the sports industry was issued. It seems that the sign of three parallel stripes is known to almost every recipient regardless of age and interest. Despite this, EUIPO and now the General Court found that the trademark should be invalidated because it had no inherent distinctive character and the distinctiveness acquired through use was not proven by the right holder. The case will probably go to the CJEU, so the validity of the mark has probably not yet been decided on.
The judgment concerns EUTM 12442166 trade mark, presented below.
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