19

Generation and Development of the Structure of
Systematic Distinction between Design Law
and Copyright Law in Germany
Long-term Overseas Research Fellow: Masahiro Motoyama

For the purpose of exploring some of the significant aspects of the systematic distinction between industrial
property law and copyright law, this research examines the generation and development of the approach tosystematically distinguish between design law and copyright law by using German law as reference material.
Generally speaking, the research can be divided into three parts: the process of generation of the approach tosystematically distinguish between the two laws; the details and development of the distinction approach underthe 1876 Design Act; and the significance of the 2004 Design Act viewed from the development of the distinction
approach in recent years. The theoretical contents of the approach to distinguish between design law andcopyright law are founded on the “gradation theory,” which gradually distinguishes between the subject matter of
the two laws based on the aesthetic level of the subject matter. In this research, the generation and development of
this gradation theory is analyzed based on Supreme Court decisions, dominant academic theories, the “kleine
Münze” concerning demarcation of the subject matter of copyright, and the recent revision of the Copyright Act
in response to EU directives and recent trends of academic theories. The analysis results indicate that thedevelopment of discussions over the gradation theory had the effect of gradually diluting the distinction between
design law and copyright law as well as diluting the significance of systematic existence of design law. The
significance of the 2004 Design Act is examined in relationship with such developments of the systematic
distinction approach.

Preface

Ｉ History before the enactment of
the design act

Design law and copyright law are similar inthat they both protect aesthetic expressions ofthoughts. Therefore, as long as design law andcopyright law constitute separate legal systems,
the significance of the distinction between
industrial development and cultural development,
which are expressed in the purposes of therespective laws, or the distinction between
industrial protection law and copyright law that
may be discussed by scholars must be the factorsthat have to be questioned the most strictly withrespect to the systematic positions of the twolaws. Hence this research attempts to explore
some of the significant aspects of the approach tosystematically distinguish between industrial
property law and copyright law, using thedistinction between design law and copyright law
as the reference material. In addition, the German
design law and copyright law have historicallyshown an extremely close systematic relationshipwith each other, and the systematic distinction
between the two laws has always been keenly
recognized and discussed. This is the very reason
that this research intends to delve into thegeneration and development of the structure ofsystematic distinction between German design
law and copyright law.

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1

Origin of the discussion on the design
protection system

The discussion on the design protection
system in Germany was already part of the
discussion on the copyright system from the time
it emerged. The 1837 Prussian Copyright Act,
which was the first German copyright act in amodern format, excluded industrial designs fromthe subject matter of copyright as an exception to
the artistic copyright system, under Section 25.
The movement toward establishing a federallevel unified copyright system started in thesecond half of the 1860s, but Section 60(iv) of the
copyright bill submitted to the Reichstag at the
beginning of 1870 allowed use of artistic works as
industrial design, and a norm to exclude industrial
designs from the subject matter of copyright was
clearly stated. Recent studies have revealed thatthe theoretical ground for such approach to
exclude industrial designs from copyrightprotection can be sought in the free trade policyor the principle of freedom of industry at the time.
After all, the approach to exclude industrial
designs from copyright protection deriving fromthe free trade policy caused the artistic copyright● 158 ●

act to be repealed upon establishment of the first
German federal copyright act in 1870 (1870 LUG),
and caused division of the copyright system until
the German copyright law was reunified by thecurrent act of 1965. Nevertheless, the important
perspective in the awareness of issues in thisresearch is the fact that the approach to exclude
industrial designs from protection arose not froma context unrelated to the copyright system, but
as “an approach to exclude industrial designs
from the copyright protection system.” The
united relationship between the discussions on thedesign protection system and that on the copyrightsystem was also indicated by the presence of aprovision approving nondiscriminatory copyrightprotection for industrial designs and artistic
works in the Bundesrat’s preliminary bill, whichmarked the beginning of the legislative
deliberation of the 1870 LUG. The demand fordesign protection legislation was inseparable fromdiscussions on the copyright system from thestart.
2First sign of the distinction approach

At the same time, while it is naturally notpossible to learn about the structure to
distinguish between the design protection systemand the copyright system that actually existed asconcrete legal systems, the first sign of theapproach to distinguish between the two systems
could already be observed in this period. It isbecause, when the provision on excluding
industrial designs from copyright protection was
criticized in the legislative deliberation on the1870 LUG, a path to simply avert such criticism
by approving nondiscriminatory protection forindustrial designs and artistic works was nottaken, but repeal of the entire artistic copyrightsystem was daringly chosen. The deliberations
did not clearly indicate the ground for the need to
distinguish between the design protection systemand the artistic copyright system by evensacrificing establishment of an artistic copyrightsystem. However, an important hint in finding out
such ground is that, in relation with other types ofworks, namely literary works and illustrative
works, influential scholars at the time had
focused on the qualitative differences in thesubject matter, such as the presence or absence of“an original expression of intellectual contents,” asthe ground for justifying discriminatory treatment
of industrial products within the copyrightsystem.

3

Summary

In this manner, in the history before theenactment of the design act, the discussions on
the design protection system occurred as part ofthe discussions on the copyright system, while
indicating a sign of the approach to distinguishbetween the design protection system and the
copyright system. When the design act is
eventually established, a substantive distinction
approach develops. The formation process of this
distinction approach is examined next.

Ⅱ Formation of the structure that
distinguishes between design
law and copyright law
1

Enactment of the 1876 Design Act andgeneration of the distinction structure

Germany’s first federal-level design act (the1876 Design Act) was established concurrently
with the artistic copyright act for protection ofartistic works (the 1876 KUG) in an organic
relationship with it. Section 5(3) of the 1876 KUG
included industrial use of artistic works within
the scope of copyright protection, and its Section
14 provided that once an artistic work is put toindustrial application, protection of the industrial
design will be left to the regulation under the1876 Design Act. Industrial designs gained afoothold for protection in a domain adjacent to the
copyright system, but at the same time, it meant
generation of the structure to distinguishbetween design law and copyright law. The
statement of legislative reasons sought the
ground for regulating protection of industrial
designs and artistic works separately by the 1876
Design Act and the 1876 KUG in the qualitativeevaluation of the subject matter. It referred to thesubject matter of the 1876 KUG as “high art(hohen Kunst),” which is a concept that implies
the qualitative level, and proposed an approach todistinguish between design law and copyright law
based on qualitative evaluation of the subject
matter. Section 14 of the 1876 KUG, bridging
between design law and copyright law, was a legal
technique type of system that divided the scopesof application of the two laws by using a formal
trigger, i.e. the presence or absence of industrial
application. The systematic reason for requiringsuch a legal technique was in the distinction of
the subject matter based on a qualitative criterion
or based on the level of aesthetic originality.

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2

Criticisms against Section 14 of the1876 KUG and the 1907 amendment of
the KUG

Section 14 of the 1876 KUG, which left theprotection of artistic works to design law basedon the trigger of industrial application,
immediately became subject to criticisms due toits failure to meet the demand of the modern arts
industry among other reasons. Thus, amendment
was made, and the 1907 KUG abolished Section
14 of the old act, while clarifying in Section 2(1)that productions of the arts industry are subject
matter of copyright as artistic works. This meantthat industrial designs expanded the scope of theirprotection to the copyright system. However,Section 2(1) did not approve copyright protectionof industrial designs unconditionally. The
statement of reasons for this provision clearlystated that qualitative differences should besought between the subject matter of design rightand that of copyright based on the presence orabsence of “an original and artistic achievement.”
In other words, the qualitative differences
between the subject matter of the two systems
limited the scope of protection of industrial
designs that had expanded to the copyrightsystem. At this point, the legal technique type
distinction system based on the presence orabsence of industrial application that Section 14 of
the 1876 KUG had relied on was abolishedformally as well, and the qualitative differences
between the subject matter of design right andthat of copyright came to the fore as thetheoretical ground supporting the structure of
distinction between design law and copyright law
and came to bear important significance.
3

Generation of the gradation theory

Later, the theoretical contents of the approachto distinguish between design law and copyrightlaw, which could be reduced solely to the
distinction approach based on the difference innature of the protectable subject matter, areconcretized by the gradation theory (Stufentheorie)that was developed through German case law andeventually gained the recognition of academic
theories.
Supreme Court decisions that indicatedfindings about the issue of distinction between
the subject matter of design right and that of
copyright under the 1907 KUG included theImperial Court decision of June 10, 1911 [Germanschool typeface case] as the first, followed by the

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Imperial Court decision of April 17, 1929 [cutlery
set design case], the Imperial Court decision ofJune 12, 1937 [furniture fabric case], theImperial Court decision of September 12, 1939
[tableware set design case], the Federal Court ofJustice decision of January 22, 1952 [children’s
craftworker doll case], the Federal Court of Justicedecision of November 27, 1956 [Europapost title
typeface case], the Federal Court of Justicedecision of May 30, 1958 [Candida typeface case],and the Federal Court of Justice decision of
September 30, 1964 [food processor case]. As
clearly indicated in the statement of reasons forlegislation of the 1907 KUG, the qualitative
difference between the subject matter of design
right and that of copyright carried decisive
significance in distinguishing between design law
and copyright law, and through the accumulationof the court decisions, such qualitative difference
was made more concrete. As a result, a
proposition that “subject matter of design rightand that of artistic copyright do not differ in
essence in that they are both aesthetic creations,but they gradually differ in the level of theiraesthetic contents” was established as atheoretical proposition supporting the approach todistinguish between design law and copyright law.
In addition, consideration should be given to thetheoretical relationship between the fundamental
ground supporting the approach to distinguishbetween the two systems and the formal
differences between the two protection systems,
that is, the differences in the term of protection
and the protection method. As stated in the court
decision in the [Candida typeface case], theformal differences between the two protection
systems were not the basis for deriving the needfor distinguishing between the two systems, but
merely a factor that affected the level of thecriterion for the distinction. In other words,
discussion on the need for the distinction anddiscussion on the criterion for the distinction
were different, and the former discussion on theneed for the distinction was derived not by theformal differences between the two systems, butby the above theoretical proposition.
This theoretical proposition was also
accepted by academic theories. An influential
academic theory cited the court decisions that
had been rendered since the decision in the[school German typeface case], and emphasized
the difference in the level (Gradunterschied) thatexisted between the creative achievement
respectively required for the subject matter ofdesign right and that of copyright. Academic● 160 ●

theories called this theoretical proposition the“gradation theory (Stufentheorie).” In this theory,the difference between design right and copyrightwas construed to be merely a difference in thelevel (Grad) instead of an essential difference, andsubject matter protected by the two rights were
gradually distinguished by a criterion of the levelof aesthetic originality or the level of creativity(Gestaltungshöhe).
4

Development of arguments over thegraduation theory

The gradation theory is a theory fordemarcating the subject matter of design rightwithin the domain of industrial art in relationshipwith subject matter of copyright. Therefore, it hasa theoretical relationship with a generality on theprotection criterion for subject matter of
copyright, more specifically, the “kleine Münze”
argument over the protectability of practicalachievements that exist in the marginal domain of
the subject matter of copyright, which has been
discussed since the 1920s in German academic
theories on copyright law. The gradation theory
can be positioned as one of the “kleine Münze”
arguments in relationship with the category ofartistic works. Therefore, it was indispensable tounderstand the “kleine Münze” argument inexamining the development of discussions overthe gradation theory.
According to systematic research analyzing
court decisions and academic theories on the“kleine Münze” argument, the “kleine Münze”
argument showed a good contrast, under the 1901
LUG and the 1907 KUG, between works offormative art for which the gradation theory was
supported and “kleine Münze” was excluded from
copyright protection, and literary, scientific, andmusical works for which copyright protection of“kleine Münze” was basically approved. The
attitude to be taken against the presence of thistheoretical contrast has been an important issue
in discussions on copyright law and design law inGermany. At the time of legislation of the current
1965 Copyright Act, the “kleine Münze”
argument was consciously discussed by also
taking into view the systematic relationshipbetween design law and copyright law in the wakeof introduction of the first-ever unified concept onprotected works in German law. As a result,however, approval of copyright protection of“kleine Münze” was only stated in the statementof legislative reasons. In other words, in thefundamental amendment of the Copyright Act,neither the statute law nor the statement of
reasons gave a clear answer as to whether or not
the above-mentioned systematic contrast intreatment of “kleine Münze” will be corrected,that is, whether or not the systematic relationshipbetween design law and copyright law will be
reviewed. Later, under the current Copyright Act,
many academic theories on design law andcopyright law supported the distinction theory or
the gradation theory, which required a high levelof creativity (Gestaltungshöhe) for copyrightprotection of applied art and uses the level ofcreativity as the criterion for distinguishing
between the subject matter of design right andthat of copyright, while dividing opinions as toapproval of general copyright protection for“kleine Münze” of all types of works. On theother hand, there were also publications ofsystematic research proposing that generalapproval of copyright protection for “kleine
Münze” including applied art as well as thegradation theory would become unnecessary by
restructuring the criterion for copyright protection,
and also denying the significance of existence ofdesign law, with an intention to totally abandon
criteria for copyright protection that involve
arbitrary decisions. Meanwhile, court decisions
consistently supported the gradation theory by
distinguishing between subject matter of design
right and that of copyright, which have essential
commonality, based on the level of creativity(Gestaltungshöhe), from the standpoint ofunderstanding design law to be an industrial
protection law founded on copyright law.
5

Development of European copyrightsystems and their impact on thegradation theory

The recent debate over the European
copyright system in response to the EU
directives and the various amendments to thecurrent Copyright Act had quite an impact on thecourse of development of the gradation theory. Aslong as assuming to secure compliance with the
EU copyright law system that requires
abandonment of a high-level copyright protection
criterion for works of computer programs, worksof databases, and photographic works, it would be
difficult to generally maintain the high-level
copyright protection criterion that supports thegradation theory, that is, an approach to exclude“kleine Münze” from protection under thecurrent Copyright Act. Also, the current
Copyright Act adopted a unified concept of works● 161 ●IIP Bulletin 2006

in its provisions, and the statement of its
legislative reasons had clearly mentioned
avoidance of discriminatory protection criterion
for different types of works. As a result, theinfluence of the gradation theory also decreased
from a systematic point of view. Influential
academic theories started off their inquiry fromsuch European copyright system of recent years,
and proposed to give up a high-level copyrightprotection criterion and to generally approve
copyright protection for “kleine Münze” as aresult, while suggesting views that deny the needfor or show doubts against the gradation theory inthe domain of applied art.
6

Summary

Already at the time of establishment of the1876 Design Act, the qualitative difference
between the subject matter of the two rights
carried important significance as a theoreticalground supporting the structure to distinguishbetween design law and copyright law. After theestablishment of the 1907 KUG, this qualitative
difference gained theoretical contents and became
the gradation theory through accumulation of
court decisions and approval by academic theories.
Then the gradation theory developed theoreticallycorrelating with the “kleine Münze” argument on
demarcation of subject matter of copyright under
the current Copyright Act. The dominant view inacademic theories and court decisions had
supported the gradation theory, but theabandonment of the high-level copyrightprotection criterion for specific types of works
based on the development of the European
copyright law system in recent years was not
irrelevant to the subsequent course of thegradation theory. Influential and convincing
opinions that also took into view European
copyright law system began to indicate doubts
against maintenance of the gradation theory.
Industrial designs gained a foothold forprotection in a domain adjacent to copyrightsystem with the establishment of the 1876
Design Act, and then, with the establishment of
the 1907 KUG, they expanded this domain into
the copyright system. The gradation theory had
provided limitation to such scope of protection ofindustrial designs within the copyright systemboth before and after the legislation of the current
Copyright Act. However, the gradation theory
recently faced an influential and convincing
approach that requires no gradation theory,
backed by development of the European law

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system. This approach that requires no gradation
theory implies an approach to deny the need forthe 1876 Design Act. It is because, just as theview generally approving copyright protection for“kleine Münze” proposed in the “kleine Münze”
argument, if full and unrestricted copyrightprotection is approved for industrial designs, the1876 Design Act will lose its significance ofexistence. Looking at the overall trend of thesystematic relationship between design law andcopyright law, the structure to distinguishbetween design law and copyright law hadbasically been heading toward dilution since theenactment of the 1876 Design Act, and thesignificance of existence of the 1876 Design Act
had also been heading toward dilution. Thus, thesignificance of the 2004 Design Act is exploredfrom the viewpoint of restructuring thesignificance of existence of the design law systemin the following part.

Ⅲ Development of the distinction
structure and the significance ofthe 2004 Design Act
1

Basic concept of the EU directive on
designs

The purpose of enactment of the 2004
Design Act was to integrate the EU directive on
designs, which was drafted in October 1998, into
national law. Therefore, accurate understanding of
the basic concept of the EU directive is importantas the premise for examining the significance ofthe 2004 Design Act. The key reference material
for understanding the basic concept of the EU
directive on designs was the Max Planck draft
drawn up in 1990.
Conventionally, there was a difference among
European countries in the understanding ofwhether design law should be considered adomain adjacent to patent law or copyright law.
This difference, symbolically expressed as the“patent approach” and the “copyright approach,”showed up as differences in the details of thenovelty requirement and the status of theoverlapped relationship with subject matter of
copyright with regard to the understanding of
subject matter of design right. The “design
approach” of the Max Planck draft was an idea torelease design law from such needless dilemma of
patent law versus copyright law, and to prepare an
original and independent position for design law
in the system of intellectual property law byrestructuring the subject matter of design from a● 162 ●

perspective specific to the design law system.
This idea started off by questioning thepeculiarities of the domain of protection, that is,
the realistic and economic functions of theprotected designs in the market. As a result, adesign was understood as a marketing instrument
and design law as a system for protecting designs
in their relationship with the actual market
function (Marktwirkung). At this point, distinction
between a functional design and an aesthetic
design was no longer relevant. A design was to beprotected as a marketing instrument under thedesign system as long as it could be distinguishedfrom publicly known designs.
The basic concept of this Max Planck draft
was passed on to the EU directive on designs.
Preamble 14 of the EU directive on designs
proclaims that the aesthetic quality (ästhetische
Gehalt) of subject matter is irrelevant toprotection of designs. In addition, the design
protection requirements – novelty and individual
character – which were concretized as legal
propositions, must also be read while bearing in
mind the basic concept underlying the EU
directive on designs. The novelty requirement is
not the absolute novelty that is required under
the patent system. It is objective, relative novelty.
Article 6(1) of the directive provides that even if adesign has been made available to the public at thetime when novelty is determined under Article 4,
it does not lose novelty as long as it has not
become known among circles specialized in the
sector, operating within the EU. Meanwhile, anissue that is decisively important with respect tothe individual character requirement is not theaesthetic originality, which is required under the
copyright system. As a matter of course, whether
or not the design at issue has an individual creative
character and exceeds the average skills of adesign creator is no longer questioned. The
individual character requirement derives from theeconomic market function of the design as amarketing instrument, and it requires a distinction(unterscheiden) from publicly known designs thatis recognized not from the viewpoint of the design
creator, but from the viewpoint of the informed
user (informierter Benutzer). It requires adifference (Deifferenzierung) from other similar
designs. What is indicated here is a determining
method that has the quality of competition law.
2

The 2004 Design Act and subject matterof design right
Since this research attempts to examine thesignificance of the 2004 Design Act in relation
with the development of the structure to
distinguish between design law and copyright law,
it is important to understand the subject matter ofdesign right under the 2004 Design Act. It isbecause, the gradation theory that hadtheoretically supported the distinction structure
was the very theory concerning qualitative
understanding of the subject matter of design
right, as already mentioned.
Section 2 of the 2004 Design Act mentions
two requirements for design protection, similar to
Section 1(2) of the 1876 Design Act: novelty andindividuality. Of these two requirements, theconcept of “individuality” was important as the
key concept that reflected the essential
commonality between design law and copyrightlaw, which was the basic quality of the 1876 Design
Act. However, the term “Eigentümlichkeit” usedin Section 1(2) of the 1876 Design Act was
replaced with “Eigenart” in Section 2 of the2004 Design Act for the same concept of“individuality.” There is already an academic
theory pointing out that change of the term forthe concept of individuality is found to imply not
only modernization of the legal term, but also thecompetition law-style restructuring of the designlaw.
Indeed, this concept of individuality(Eigenart) adopted by the new Design Act was aconcept that had been carefully separated by theSupreme Court as a competition law-like conceptfrom the concept of “Eigentümlichkeit” thatmeant “individuality” for justifying design
protection or copyright protection. The following
court decisions clearly indicated this point: theFederal Court of Justice decision of May 21, 1965
[ignition cap case]; the Federal Court of Justicedecision of January 23, 1981 [wheel stool case];
the Federal Court of Justice decision of April 4,1984 [Vitra series case]; Federal Court of Justicedecision of January 30, 1992 [pullover designcase]; and the Federal Court of Justice decision ofJuly 15, 2004 [metal bed case]. In relation to theconcept of individuality (Eigenart) undercompetition law, the question is whether or not
the design at issue has the function to indicate
the source or quality of the product associatedwith a specific company through distinction fromother existing designs. On the other hand, in
relation to the concept of individuality(Eigentümlichkeit) under creative law, that is,
copyright law or design law, the question iswhether or not the creative design at issue itself
has creative features.

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If we were to premise an understanding
compliant with such a case law principle, it would
mean that the 2004 Design Act has intentionallyadopted the concept of competition law-like
individuality (Eigenart) that questions thepresence or absence of the function to indicate
the source of goods or the function to distinguishgoods from other goods, instead of the presenceor absence of creativity in the subject matter. In
this regard, the replacement of the term can beconsidered to imply competition law-like
restructuring of design law, similar to theindication in the earlier academic theory.
3

Significance of the 2004 Design Act

If an attempt were to be made to understandthe significance of the 2004 Design Act in a waythat is at least theoretically compliant with thebasic concept of the EU directive on designs andthe subject matter of design right expressed in
the concrete legal proposition, it would be a breakaway from the basic nature of the 1876 Design
Act and conversion of quality into competition
law-like design law. The statement of reasons forthe draft clearly states that the new Design Act
has broken away from the conventional close
relationship with copyright law, and has secured
an independent position in industrial protection
law. The presence of the aesthetic contents(ästhetische Gehalt) that had constituted anessential element of a design under the 1876
Design Act no longer need to be taken into
consideration when protecting designs under the2004 Design Act. The remaining option for the2004 Design Act, which has cut loose from its
relationship with copyright law, would becompetition law-like restructuring, if the basic
concept of the EU directive on designs were to bepremised.
Taking a look at the general trend of thesystematic relationship between design law andcopyright law, the structure to distinguishbetween design law and copyright law has beenheading toward dilution and the significance ofexistence of the 1876 Design Act has also beenheading toward dilution since the enactment of
the 1876 Design Act. Such basic tendency wasinseparable from the basic nature of the 1876
Design Act – “industrial protection law based on
copyright law” – which was the starting point of
the gradation theory. The 2004 Design Act
secured its own significance of existence bybreaking away from the basic nature of the 1876
Design Act and qualitatively converting into a

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competition law-like design law. In facing themodern situation where design law was at a riskof losing its own significance of existence due toits close systematic relationship with copyrightlaw, it tried to secure its own significance ofexistence by breaking away from the systematic
relationship with such copyright law – the author
thinks it is possible to find one significant aspectof the 2004 Design Act in this point.

Closing remarks
It can be said that, under the 2004 German
Design Act, which broke away from the basic
nature of “industrial protection law founded on
copyright law” and converted into a competition
law-like system, the significance of distinction
between industrial property law and copyright
law has decreased in the systematic relationshipbetween design law and copyright law. It issimilar to the fact that the distinction frameworkof industrial law and cultural law is not so
decisively significant in distinguishing between
the domains of patent law and copyright law dueto the difference in the subject matter of the twosystems. If design law and copyright law havedifferent subject matter, the two laws will secure
separate systematic positions.
Then, what kind of function does the distinction
framework of industrial property law andcopyright law actually have in the intellectual
property law system? There is a legal reality thatthe systematic position of the copyright law
cannot be simply explained by such words ascultural or non-industrial. Exploration of thetheoretical and practical significance of the
distinction between industrial property law andcopyright law will continue to be the author’s
important research theme in the future.

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