Opinion on:

- the proposal for a European Parliament and Council Regulation on the Community design (), and - the proposal for a European Parliament and Council Directive on the legal protection of designs () (94/C 388/03)

On 20 December 1993 the Council decided to consult the Economic and Social Committee, under Article 100a of the Treaty establishing the European Community, 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 4 May 1994. The Rapporteur was Mr Pardon.

At its 317th Plenary Session (meeting of 6 July 1994), the Economic and Social Committee adopted the following Opinion by 83 votes to 52, with eleven abstentions (vote by name).

1. Procedure

Given the scale and importance of the subject referred to it, the Committee decided to draw up an immediate, initial Opinion, confined to the most significant and controversial issues, while intending to draw up a Supplementary Opinion at a later stage, covering all the other questions raised by the Commission`s proposals.

2. General comments

2.1. Intellectual property rights, embracing trade marks, patents, geographical designations, industrial designs, copyright, semiconductor product topographies, computer programmes, data bases, biotechnological inventions and new plant varieties, are assuming everincreasing importance in trade.

2.2. The Economic and Social Committee shares the views expressed in the Green Paper on the legal protection of industrial design (III/F/5131/91), to the effect that such protection is becoming increasingly important: the products to which designs apply now occupy an important place in the economy.

2.3. The importance of industrial designs has increased dramatically over the last 10 years, as essential elements in the marketing of consumer products. The question of their legal protection has, quite rightly, attracted growing attention from interested groups in the industrialized world, including Europe.

2.4. It is in the interests of European industry to combat counterfeiting. Counterfeiters may unfairly exploit the intellectual, artistic, economic and commercial investment made by the manufacturer of the original product ().

2.5. The Economic and Social Committee, like the Green Paper, believes that:

- investment in aesthetic industrial design should be promoted by industrial policy;

- creativity must be protected, with designs seen as an expression of the designer`s creativity;

- confusion of consumers as to the origin of products having identical or similar appearance should be avoided, as should the risk of consumers falling victim to any safety shortcomings among them;

- the positive contribution made by designs to technical innovation should be considered;

- care should be taken to respect the principle of fairness in commercial transactions.

2.6. A single market in intellectual property is becoming an urgent necessity for the European Union. European-level law on industrial designs is required. Consequently, the Committee approves the decision to propose a Regulation on this question.

2.7. The Final Act embodying the results of the Uruguay Round of Multilateral Trade Negotiations includes an Agreement on Trade-Related Aspects of Intellectual Property Rights.

Article 7 of the Agreement states its objectives:

'The protection and enforcement of intellectual property rights should contribute to the promotion of technological innovation and to the transfer and dissemination of technology, to the mutual advantage of producers and users of technological knowledge and in a manner conducive to social and economic welfare, and to a balance of rights and obligations.`

2.8. Under Article 26(2), signatories may only allow limited exceptions to the protection of industrial designs, provided that such exceptions do not unreasonably conflict with the normal exploitation of protected industrial designs and do not unreasonably prejudice the legitimate interests of the owner of the protected design, taking account of the legitimate interests of third parties.

Article 26(3) stipulates that the duration of the protection available be at least ten years.

2.8.1. The authority of signatory parties to define the requirements and the scope of protection is not affected by the TRIPs-agreement.

2.9. By virtue of its Article 1, this Agreement, signed inter alia by the EU Member States and the European Communities will become obligatory and binding. In their domestic law, members will be able to implement more extensive protection than is required by this Agreement, only if such protection does not contravene the provisions of the Agreement.

2.10. The Regulation on the Community design must respect the commitments entered into.

2.11. Intellectual rights are designed to foster innovation and, thereby, to secure economic progress and improve the situation of consumers.

2.12. Under these conditions, the law grants innovators recognized exclusive rights in respect of the commercial use of their inventions for a certain period.

2.13. The ensuing profits, the generation and size of which are determined by the market, are intended to compensate the innovator for his work, research and investment.

2.14. This situation motivates other individuals to undertake similar endeavours and to innovate in the future.

2.15. If intellectual property rights are not safeguarded, innovators` work is copied, thereby wiping out any profit for the creator and reducing incentives for innovation.

2.16. The possibility of forbidding imitations is therefore the most important aspect of the rights accruing to innovators.

2.17. Recognition of intellectual property rights creates exclusive rights. These are the cornerstone of any effective market economy.

3. Requirements for obtaining protection

3.1. The primary requirement for protection is that the design is new.

3.1.1. The draft Regulation (Article 5) considers that novelty is to be assessed at the worldwide level.

3.1.2. This provision, as worded, would be difficult to apply in many fields, and particularly in the textiles industry. Sellers of counterfeit products often obtain false certification stating that the disputed design had already been created in a third country.

3.1.3. In these circumstances, the aim should be dissemination to interested parties within the European Community before the date of reference.

3.1.4. In the light of the above considerations, Article 5(2) might be worded as follows:

'A design shall be deemed to have been made available to the public if it has been published following registration, exhibited, used in trade or otherwise disclosed, unless this could not reasonably be known to specialist circles in the sector in question operating within the Community before the date of reference.` (last sentence unchanged).

3.2. Article 6 states the second condition for protection to be individual character.

3.2.1. The Explanatory Memorandum (p. 12) specifies that the term 'informed user` indicates that the similarity is not to be assessed at the level of 'design experts`. Under these conditions, the adjective 'informed` appears ambiguous and should be deleted.

3.2.2. An informed user is one with either a professional or personal interest in acquiring or reproducing a design.

3.2.3. The term 'significantly` has the effect of excluding numerous designs, particularly in textiles, from the proposed protection. It should therefore be deleted.

3.2.4. A design should be considered to have an individual character insofar as it produces an overall visual impression on the public concerned dissimilar to any other design known, in the normal course of their affairs, to specialist circles in the sector in question, operating within the Community.

3.2.5. The individual character of a design should result from a creation which distinguishes it, by virtue of the generally different impression it creates in the eyes of the user, from a configuration known to interested circles within the European Community, before the reference date.

3.3. In view of the proposed wording for Article 5(1), Article 11(1) should be drafted as follows:

'The scope of the protection conferred by a Community Design shall include any design which, notwithstanding any differences, produces on the user a similar overall impression.`

3.4. Paragraph 2 seems superfluous, given the wording proposed here, and could be deleted.

4. Repair clause

4.1. Like all other industrial property rights, design protection results in exclusive rights (monopoly rights). However, the monopoly granted to the owner of a design pertains solely to the appearance (the 'design`) of a product, not to the product itself.

4.2. Design rights therefore grant a monopoly of forms, but not a product monopoly. 'Protection of the design of a watch does not hamper competition in the watch market` (Explanatory Memorandum 9.2).

4.3. With regard to spare parts (e.g. a fender or a front lamp of a car) covered by the repair clause the situation is different. The appearance, the 'design` of such spare parts cannot be made different as compared with the original component to be replaced.

4.4. Thus product monopolies are created if design protection is extended to such spare parts; design rights in a spare fender or a spare lamp totally eliminate competition in this product area.

4.5. This falls foul of the essential purpose of design protection which the legislator is authorized to define in detail (see point 2.8.1 above).

4.6. The repair clause contains such a definition: it does not affect the acquisition and the exercise of design rights where they operate as they should; it only stops the exercise of design rights where - as is the case in the repair sector - they cannot operate as they should. In this way the repair clause prevents monopolies from coming into existence, competitors from being driven from the market and consumers from being subjected to the dictate of pricing by a sole supplier.

4.7. At the same time it prevents the development of monopoly premiums, since the essential precondition for a design premium - that a market exists and consumers can exercise preferences (see 2.13 above) - does not apply if design protection is extended to the spare parts covered by the repair clause (see 4.4 above).

4.8. The repair clause proposed by the Commission is therefore supported by the Economic and Social Committee.

4.9. The attention of the Committee has been drawn to a lack of clarity as to the scope of Article 23. The Committee calls on the Commission to make clear, in particular, as to whether it is intended to apply to parts of a complex product where the intellectual property rights for those parts do not vest in the designer of the complex products, as for example in the case of car windscreens.

Done at Brussels, 6 July 1994.

The President

of the Economic and Social Committee

Susanne TIEMANN

() OJ No C 29, 31. 1. 1994, p. 20.

() OJ No C 345, 23. 12. 1994, p. 14.

() OJ No C 52, 19. 2. 1994.