Opinion on:

- the proposal for a European Parliament and Council Regulation (EEC) on the Community design, and

- the proposal for a European Parliament and Council Directive on the legal protection of designs

(95/C 110/05)

On 30 May 1994 the Economic and Social Committee, acting under the second paragraph of Rule 23 of its Rules of Procedure, decided to draw up an Opinion on the abovementioned proposals.

The Section for Industry, Commerce, Crafts and Services, which was responsible for preparing the Committee's work on the subject, adopted its Opinion on 3 February 1995. The Rapporteur was Mr Pardon.

At its 323rd Plenary Session (meeting of 22 February 1995), the Economic and Social Committee adopted the following additional Opinion by a majority vote with three abstentions.

1. Introduction

Since it had been announced that the outgoing European Parliament would issue an Opinion prior to its dissolution, the Committee - wishing to issue its Opinion beforehand - in its first Opinion (), stated that an immediate, initial and final Opinion, confined to the most significant and controversial issues, should be issued.

That Opinion dealt with the following provisions of the draft Regulation:

- Article 5: novelty of the design;

- Article 6: individual character of the design;

- Article 23: the 'repair clause'.

This Opinion was adopted at the 317th Plenary Session (meeting of 6 July 1994).

The purpose of the additional Opinion is now to address the remaining questions raised by the Commission proposals.

2. General comments

2.1. We are concerned with two Commission documents: a proposal for a European Parliament and Council Regulation on the Community design (COM(93) 342 final of 3 December 1993), and a proposal for a European Parliament and Council Directive on the legal protection of designs (COM(93) 344 final of 3 December 1993).

3. Regulation on the Community design

3.1. The draft Regulation seeks to secure free movement, undistorted competition and due protection for industrial designs and goods incorporating industrial designs.

3.2. Designs are deemed to be aspects of appearance which can be perceived by the human senses. No aesthetic criteria are applied.

3.3. Product design in particular has grown in importance over the past decade. Many goods are sought after by consumers, not only on the basis of their function, but also, increasingly, because of their design.

3.4. The Regulation seeks to establish a single Community legal instrument to run in parallel with the various national protection systems which apply only to the individual countries concerned and which subject users to multiple registrations, payment of different fees in different Member States and management of rights secured in different Member States.

3.5. Superior design is one of the main assets of Community-based industries in competing with industries in third countries, which often have lower labour costs.

Designs are easily reproduced; in many cases no special know-how is needed to reproduce design products. The Regulation therefore aims to comply with economic operators' demands and introduce legislation which provides at least a degree of protection against misappropriation of designs.

The Commission's view is that these aims can only be achieved via a regulation.

The Community design protection system is a two-tier system comprising 1) protection based on registration and 2) automatic protection which operates by making the design available to the public.

3.6. The basic requirements for protection are: the design must be a new one and have an individual character, i.e. in the eyes of an informed user, the design must be different from other designs on the market.

The unregistered Community design entitles the holder to protection against reproduction, whereas the registered Community design gives the legal holder a genuinely exclusive right to use the design.

3.7. The protection is scheduled to last for three years for the unregistered Community design and five years for the registered Community design, renewable for five-year periods to a maximum of twenty-five years.

3.8. The draft Regulation provides for an exception to the twenty-five year protection, reducing it to three years for spare parts for repairs. Accordingly, in the case of costly, durable, complex products such as motor vehicles, where design protection for individual components which go to make up a complex product could create a concomitant market in spare parts, a 'repair clause' has been introduced allowing designs to be reproduced for the purpose of producing spare parts, three years after the product was first placed on the market. The manufacturer will have an exclusive right for three years.

4. Directive on the legal protection of designs

4.1. The Community protection system to be created by the Regulation cannot supersede existing national protection overnight. At least temporary co-existence will be necessary. Even when the Community design enters into force and becomes the preferred means of protection for designers and their successors in title, national authorities must still maintain their registration systems in order to cater for vested rights. Registrations already taken out by national right holders must continue to be renewable up to the maximum period of protection provided for by the legislation of the country in question.

Moreover, even after the Community design has become the preferred protection system, some national enterprises with only local markets will inevitably still opt for national protection only.

Lastly, switching from a national to a Community market approach could be a protracted process for some design right holders because they may need some time to become accustomed to the Community system.

4.2. The proposed Directive seeks (a) to reduce the legal obstacles to freedom of movement for design goods and (b) to establish a system of undistorted competition in the internal market.

4.3. The draft Directive is an essential back-up to the Regulation on the Community design.

4.4. In line with the principle of subsidiarity, approximation need not extend to all aspects of the specific national protection laws, and it is sufficient to bring into line those features which are necessary to allow the co-existence of specific national and Community design protection.

These concern: the definition of 'design'; the requirement for obtaining protection, including grounds for exclusion; non-prejudicial disclosures as to the requirements on individual character and novelty; the scope and term of protection; the grounds for refusal or invalidity; and the definition of the rights conferred by the design, including their limitations and exhaustion of rights.

5. Examination of the draft Regulation

5.1.

Article 1

The term 'designs' does not appear to be the same in the different languages. A careful linguistic review should be carried out, in particular so as to make the definition contained in Article 3(a) clearer and more effective.

5.2.

Article 2

Reference should be made to the connection between this article and Council Regulation No 40/94 of 20 December 1994 (), setting up the Office for Harmonization in the Internal Market for trade marks, designs and models.

5.3.

Article 3

The definitions seem broad, although the Explanatory Memorandum does point out that the lists are indicative and not exhaustive.

The definition given in Article 3(a) of 'design' might be worded as follows:

'the appearance of the whole or a part of a product resulting in particular from the specific features of the lines, contours, colours, shape, effects and/or materials of the product itself and/or its ornamentation'.

'Computer programs' and 'semi-conductors' must be specifically excluded from the scope of the Regulation.

5.4.

Article 4

A check should be made on whether the general requirements under this article are compatible with Article 25 of the Agreement on Trade-Related Aspects of Intellectual Property Rights, including trade in counterfeit goods.

The Committee endorses the content of Article 4(2), but suggests that the wording be improved to explain more clearly to all why protection is denied to the components of a complex product which does not in themselves offer the new and individual character required.

The term 'complex item' might be replaced with 'complex product', and 'in so far as the design ..... individual character' with 'if the design .... shares the requirement as to novelty and individual character of the complex product'.

5.5.

Article 7

The 'date' on which a design was made available to the public should be more definite. Identification of this date is of practical significance.

Is the date, thus identified, applicable throughout the world or only for the European Union? If this date is to be taken into consideration in establishing the starting point for the three-year protection period, it should be specified that it must be possible for the publication date to be known to interested EU parties.

Lastly, a third sentence should be added, possibly worded as follows: 'Those claiming ownership of an Unregistered Design must, if so requested by a third party, disclose the date of publication of the design'.

5.6.

Article 8

In the interests of clarity, the various scenarios covered by this article should be set out separately.

5.7.

Article 9(1)

The Explanatory Memorandum suggests that the provision seeks to deny protection to designs whose appearance is wholly dictated by their function. No variation is possible and the design contains no arbitrary features. The wording should therefore be amended and the word 'arbitrary' deleted.

5.8.

Article 9(2)

Only those parts of a design which are absolutely essential to the interconnection of two elements so that each can fulfil its function are denied protection. The purpose of the exclusion is to ensure the interoperability of products from different manufacturers. Consequently, the formula used in this paragraph, 'mechanically assembled or connected' must be interpreted very precisely. The term 'assembled' implies that the provision should apply equally to designs, or parts thereof, which are not part of the element enabling connection. In order to avoid misinterpretation, the words 'assembled or' should therefore be deleted.

A car door, for example, is necessarily intended to be incorporated into the vehicle bodywork: there can, therefore, be no monopoly over its dimensions, but the external form of the door or its trim may of course be protected.

The same applies to car wheels. A wheel is designed to be fitted to a specific car. The wheel has a certain number of holes which must perfectly match the corresponding bolts for the wheel to be fitted. The number of holes and the tightening depth cannot therefore be subject to a monopoly. In contrast, all the other elements in its form, its 'style', may be protected. Car wheel manufacturers are permitted to make wheels which fit a given model, insofar as the design of the wheel is different from the original.

5.9.

Article 10

This principle, set out in the Paris Convention, concerns designs, but not their 'exploitation or publication'. These words should be deleted to give the principle its full force and validity.

5.10.

Article 12

Since it is difficult for a third party to determine the reference date indicating the duration of protection for an unregistered Community design, it is suggested that the holder of an unregistered Community design should be required to communicate the date from which protection is effective to any person so asking.

5.11.

Article 14

It should be specified, in paragraph (2), that this is a derogation from the principle set out in paragraph (1) relating to the right.

Furthermore, the word 'obligations' should be replaced with 'fonctions' in paragraph (2) [French text only: English not affected].

5.12.

Article 15

This article establishes plurality of designers and - quite rightly - advocates joint rights.

However, the means of exercising this right remain to be defined.

In principle, these means should be set by contract. Otherwise, the right must be exercised jointly, as described in the Explanatory Memorandum.

It may, however, be envisaged that each party can take action independently, as under Benelux law ().

5.13.

Article 16(1)

Instead of referring in actions to establish title, of a transfer to the holder of the Community Design, it would be preferable to accede to the variant proposed by the Commission on 11 January 1995 and write 'the person entitled to it .... may ..... claim recognition as the lawful holder from the inception of the Community design'.

5.14.

Article 16(3)

The two-year deadline should also apply to unregistered Community designs.

5.15.

Article 19

The connection between this article and Article 39(4) should be taken into account.

5.16.

Article 20

This article empowers the holder of an unregistered Community design to prevent any third party from using an identical design 'resulting from [...] copying'. This provision is only acceptable, particularly in the textiles industry, if the burden of proof is reversed. In other words, the design holder should be granted the benefit of a prima facie case: if he can prove that he is the creator of the design and that the third party's design is at least substantially similar to his design, it should be up to the defendant to prove that he has not copied the design of the complainant holder.

The text should be simplified and made clearer.

5.17.

Article 21

The holder of a design applied to a product should be allowed to initiate proceedings on the grounds of counterfeit directly against the manufacturer of a counterfeit design. (On this point, see the draft Council Regulation () laying down measures to prohibit the release for free circulation, export or transit of counterfeit and pirated goods.

In no case may the effect of registration be retroactive.

5.18.

Article 27(1)

The text of (b) and more in particular the reference to Article 9(2), leads to the conclusion that this paragraph provides for the possibility of declaring a Community design partially invalid.

Interconnecting features can certainly fulfil the requirements for registration: novelty and individual character. Only in case the interconnection itself is subject of a design right, with reference to said Article 9(2), such a design is invalid.

However, most of the time the design of an interconnecting feature will not constitute an independent design but will form part of a design as a whole. The protection granted to such a design does not comprise the design of the interconnecting element since this has been excluded under Article 9(2). This does not make the design invalid. Only its scope of protection is limited.

Consequently the reference in Article 27(1) to Article 9(2) should be limited to those cases where the interconnecting feature constitutes an independent design of its own. Furthermore, if the possibility of claiming partial invalidity is given, also the consequences thereof should be taken into account. The procedural Rules should then also provide for an amendment of the register in order to make sure that everybody can learn from the register that a certain registered Community design has been declared partially invalid. This is not desirable, since such a system is not in line with the simplicity aimed at under the proposed Regulation.

5.19.

Article 27(2)

With regard to the provisions of this article and of Articles 56 and 88 which refer to it, it is unclear why a third party who, without being a counterfeiter, is aware of grounds for invalidity as described in this paragraph, may not invoke the procedure to declare a design invalid.

5.20.

Article 39

The list of points under paragraph (3) is optional. It is suggested that provision be made for drawing up a detailed list of design features considered by the applicant as novel and having an individual character. Such a list might be of use to both the holder and third parties, for the purposes of subsequently determining the validity and scope of protection.

5.21.

Article 40

Multiple applications are subject to the condition that the products in which the designs are intended to be incorporated all belong to the same sub-class, or to the same set or composition of items.

This restriction is too severe. Reference to sub-classes should be deleted.

The application fee structure should ensure that those making single applications are not cross-subsidizing those making multiple applications.

5.22.

Article 52

Re-reading of this article in conjunction with Article 21(2), reveals that during the deferment period, the design holder may only claim the rights conferred by an unregistered Community design.

Registration of designs with deferred publication is of interest. Consideration should, however, be given to granting all the rights conferred by registered designs even in the case of registration - with simpler procedures and lower fees - of a design with deferred publication.

Designs with deferred publication should be granted the same rights as those which have already been registered.

The solution might be to clarify Article 21(2) as follows: 'provided that the publication of a registered Community design is deferred in accordance with Article 52, said design shall confer on its holder the rights referred to in Article 20'.

All interested parties should be entitled to consult the Office regarding designs with deferred publication.

In order to meet the possible confidentiality requirement, designs with deferred publication could come under 'open' registration arrangements - authorizing public inspection - and 'closed' registration where inspection would not be allowed.

5.23.

Article 89(2)

Article 89(2) establishes presumption of validity in that a Community design is to be considered new within the meaning of Article 5 provided the holder submits evidence of its individual character.

This means that the design is presumed to be new within the meaning of Article 5 provided that its individual character within the meaning of Article 6 can be supported by evidence.

The way in which 'evidence' is to be understood is set out in the Explanatory Memorandum (p.40 of the draft Regulation).

The proposed provisions in effect constitute a reversal of the burden of proof against the defendant counterclaimant (i.e. the possible counterfeiter) rather than the right holder.

Where the holder submits evidence to substantiate his claim that the design has an individual character, the design is treated as being new, unless the defendant presents proof to the contrary in any counterclaim for a declaration of invalidity.

The design is therefore deemed to have individual character, within the meaning of Article 6, and to have novelty within the meaning of Article 5, unless proved to the contrary.

5.24.

Article 93

Paragraph 2 provides that a Community Design Court may enjoin a counterfeiter to provide information on the origin of counterfeit products.

For some sectors of industry, whose products circulate very rapidly, immediate information may be necessary, so as to allow the design holder to identify the origin of the counterfeit product as quickly as possible. If the holder has to initiate proceedings against a seller in order to identify the source, this procedure will be highly difficult, ineffective, costly and futile, particularly in the event of proceedings based on the protection of an unregistered design (which only confers rights against copies made or used in bad faith), where the seller has acted in good faith.

A supplementary provision should therefore be inserted, allowing the holder of a registered or unregistered design to initiate an action to seek information, independently of any action concerning the counterfeit, as is possible under German law. This would enable the holder to secure information of value in identifying the source of the copy: in other words, the element of intent.

In order to avoid improper securing of information on competitors, such action should be subject to a guarantee deposit, like that under customs rules governing anti-counterfeit action.

6. Examination of the draft Directive

The Committee fully endorses the draft Directive.

Done at Brussels, 22 February 1995.

The President

of the Economic and Social Committee

Carlos FERRER

() OJ No C 388, 31. 12. 1994.

() The Benelux law on trademarks, signed at Brussels on 19 March 1962, amended 10 November 1983, amended for the second time 2 December 1992. The latter amendment has not yet come into force.

() OJ No L 341, 30. 12. 1994, p. 8.

() OJ No L 11, 14. 1. 1994, pp. 1-36.