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Court refers questions on first disclosure of designs to CJEU

Posted on 24 October 2019

Court refers questions on first disclosure of designs to CJEU

The Intellectual Property Enterprise Court (IPEC) has referred the important question of what counts as a first disclosure of a design for the purposes of qualification for Unregistered Community Design (UCD) to the EU Court of Justice (CJEU). The issue is as follows: must there be an event of disclosure which takes place in the territory of the EU, or is it sufficient that the event, wherever it takes place, could reasonably have become known to the relevant circles within the EU?

In Beverley Hills Teddy Bear Company v PMS International Group, HHJ Hacon has concluded that the issue is not clear cut and that, as a "matter of widespread interest", designers and others will benefit from an authoritative statement of the law, including parties who trade from (and will continue to do so post-Brexit) the UK. Of course, whether the CJEU will actually determine the issue may depend upon the status of the Brexit negotiations and whether there is any deal incorporating a transition period. Designers will still therefore need to prepare on the basis that simultaneous disclosure or registration of key designs is the safest way to proceed to protect their position in both the EU27 and the UK. 

Background

The Claimant first showed its soft toy designs at a trade fair in Hong Kong, and then subsequently showed them in Germany.  The Defendants accepted that the nature of the Hong Kong fair was that the design of the toys would have become known in the normal course of business to the circles specialising in the sector within the EU.  

However, the Defendants argued that the effect of Article 11 of the Design Regulation was that a design must have been first disclosed in the territory of the EU in order for UCD protection to arise.  The first disclosure in the EU on this basis was in Germany and therefore the designs, according to the Defendants, lacked novelty due to the earlier disclosure in Hong Kong. This is because the CJEU has previously determined that it is not necessary for an event of disclosure to take place in the EU when determining whether it has been made available to the public when assessing the novelty of the design.  Clearly this interpretation puts non-EU designers in a difficult position – if they first disclose their design outside of the territory of the EU, it will not qualify for UCD protection, but that first disclosure outside of the EU may also invalidate the design. 

Decision

There is no CJEU case law authority on whether the first disclosure for UCD protection must be in the territory of the EU, and so the judge considered the wording of the EU legislation, the German case law (which is in favour of requiring a first disclosure in the EU territory for UCD protection to arise), and the conflicting commentary in leading textbooks.  His view was that the German court's approach was correct i.e., that a first disclosure of a design must first take place in the EU to qualify a design for UCD protection.  However, he recognised that the issue is not clear, and therefore decided to refer questions to the CJEU.   A key factor in the Court's analysis was Article 110(a)(5) in the Design Regulation (a provision added to the Regulation in 2003 as part of the accession to the EU of new Member States). This provides that "a design which has not been made public within the territory of the [EU] shall not enjoy protection as an unregistered Community design".  It is not clear what led to the enactment of this provision, although the Judge suggested the intent was to clarify Article 11 rather than to amend it.

In summary, the Court is seeking guidance whether, for UCD protection to apply under Article 11 of the Design Regulation, there must be a disclosing event which takes place within the EU territory.  Alternatively, is it sufficient that the event disclosing the design, wherever it took place, could reasonably have become known in the normal course of business to the relevant circles in the EU?  A further, related issue, is whether novelty of a design for which UCD is claimed is to be assessed as at the date when UCD arises in accordance with Article 11, or at the date when an event of disclosure, regardless of where it took place, could first reasonably have become known in the normal course of business to the relevant circles in the EU.

A resolution of this issue will bring much needed certainty to designers, but it remains unclear whether the CJEU will, in fact, deal with the reference.  For now, designers should still consider dual registration and/or simultaneous disclosure in order to seek to ensure protection in both the UK and the EU27 in a No Deal Brexit.  Of course, the best outcome would be for an agreement on reciprocity between the UK and EU on the rules of first disclosure.

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