The CJEU is due to answer a long-standing debate in connection with unregistered designs: What happens when the disclosure occurs outside the European Union? Does this prevent protection of the design because it lacks novelty?
The protection of unregistered Community designs (UCD) in the European Union is a very useful industrial property right which is often overlooked by the owners or designers themselves. UCDs must meet the same requirements as registered Community designs, namely novelty and individual character, to receive protection. But, as their actual name indicates, the protection of UCDs does not occur by registration, but rather automatically (and free of charge) by making the design available to the public, whereby it becomes known to the circles specialized in the sector concerned.
Consequently, when a design is considered to have been made “available to the public” is crucial. Doubts arise due to the apparent contradictions in the Community Design Regulation (CDR). On the one hand, Article 11(1) CDR states that the protection of UCDs starts “from the date on which the design was first made available to the public within the Community”, that is, within the EU. On the other hand, the protection of UCDs requires worldwide novelty, in that any disclosure, in any country, breaks the novelty of the design and prevents its protection, unless the design could not reasonably have become known in the normal course of business to the circles specialized in the sector concerned “operating within the Community”.
So what happens if I disclose a design outside the EU? Is it automatically barred from the protection afforded to UCDs because the required novelty has been broken? Surprisingly, up until now, the CJEU had not been asked for its opinion on the matter. However, in September 2019, the Intellectual Property Enterprise Court (IPEC, a British court specializing in intellectual property), submitted two questions for preliminary rulings on the matter in connection with a conflict between Beverley Hills Teddy Bear Company and PMS International Group due to infringement of the UCD Squeezamals, a famous range of animal-like toys.
The Squeezamals designs were first shown to the public for the first time in October 2017 at the Mega Show, an international trade fair in Hong Kong. However, they were not officially exhibited in the EU until January 2018, at the Nuremberg Toy Fair. That is the question: How should the disclosure in Hong Kong be interpreted? Does it trigger protection of these designs as UCDs? Does it break the novelty and prevent their protection as UCDs? The questions that were referred to the CJEU can be summarized as follows:
- Must the disclosure required to protect UCDs have taken place within the EU or is it sufficient for the design to have been accessible to the circles specialized in the sector concerned in the EU?
- What is the relevant date to determine the novelty of an unregistered community design? The date on which the design was disclosed for the first time within the EU? The date on which it became accessible to experts in the EU, irrespective of when the event took place? Is there a third option? What is the relevant date?
There are two predominant views of how the phrase “within the Community” should be interpreted when assessing the date on which protection of UCDs actually starts. The widespread view is that the key lies in when the public in the EU had access to the unregistered design, irrespective of where the disclosure occurred (e.g. access on the internet to a design disclosed in the US or at international fairs attended by Europeans).
Conversely, the strict or territorial interpretation requires the disclosure to have taken place “within the territory of the Community”, that is, within the EU. This is the interpretation that the national courts have traditionally followed, which considerably limits the scope of the right. Why? Because if the first disclosure takes place outside the EU, the possibility of obtaining protection via an unregistered design would be automatically invalidated because of lack of worldwide novelty. In addition, this interpretation would appear to discriminate against designers that operate outside the EU, because they are less likely to disclose their designs for the first time in Europe and would therefore lose the protection offered to UCDs.
In this case, if the CJEU chooses the “territorial” interpretation, it would mean that Squeezamals cannot be protected as UCDs because they have not been disclosed in the EU. That is, the disclosure in Hong Kong would have broken the novelty of the Squeezamals, preventing their possible protection in Europe as UCDs.
Although we will have to wait until the CJEU issues a ruling, it will be best to exercise caution and prepare very carefully the disclosure strategy of the designs we seek to protect without registration. We should also bear in mind that due to Brexit, soon disclosures in the UK may also break the novelty of designs that seek protection as UCDs. At present, the CJEU takes 15 months to rule on matters referred for a preliminary ruling. Therefore, paradoxically, before abandoning the European industrial property system once and for all, the UK may help to resolve one of its oldest debates.
Garrigues Intellectual Property Department