Unregistered design right questions referred to the Court of Justice of the EU (CJEU) on design disclosure and novelty. What will the answers mean for designers marketing their products?

Kashif Syed | October 2019

Where a national court in a Member State of the EU has doubts about the proper interpretation of EU law it can refer questions to the EU Court for clarification.  Last month, His Honour Judge (HHJ) Hacon sitting in the Intellectual Property Enterprise Court (IPEC) (a division of the High Court of Justice) referred two key questions on unregistered design law to the CJEU for a preliminary ruling in the case of Beverly Hills Teddy Bear Company v PMS International Group plc [2019] EWHC 2419 (IPEC). 

The claimant (BHTB) sued the defendant (PMS) based on the alleged infringement of Unregistered Community (EU-wide) Designs (UCDs), copyright and Registered Community Designs (RCDs) it claimed to own in the designs of 6 animal-like soft toys called 'Squeezamals'. PMS had sought summary judgment on the grounds that the claimed UCDs in 5 of the 6 soft toys were invalid, which, if successful, would result in part of the claim being struck out. Both parties agreed that 5 of the 6 soft toys had first been shown to the public at a trade fair in Hong Kong called the 'Mega Show' in October 2017. The parties also agreed that at the same time this would have become known in the normal course of business to the circles specialised in the sector concerned, operating within the EU. The toys were later exhibited within the EU at a toy exhibition in Germany in January 2018. PMS argued that the disclosure made in Hong Kong invalidated BHTB's 5 UCDs for lack of novelty. For a design to be protected in the EU it must be novel or new, meaning that no identical design has been disclosed ('made available to the public') at the relevant time novelty is to be assessed. The CJEU has already previously confirmed in the case of Gautzch (Case C-479/12) that a disclosure 'event' does not have to occur within the EU for the design to be made available to the public when assessing novelty. Article 11(1) Community Design Regulation (CDR) 6/2002 provides for a UCD to come into existence it must be first made available to the public 'within the EU' and protection thereafter lasts a period of 3 years from that date. Owing to the ambiguous drafting of the CDR there is a question mark over whether the disclosure event that creates a UCD must geographically occur within the EU.  In BHTB v PMS the debate between the parties is inter alia over the following matters:

a)    whether the Hong Kong disclosure, which is outside of the EU and could invalidate the designs for lack of novelty, can be the same disclosure which brought the UCDs into existence, and

b)    whether or not the relevant date for assessing novelty of the designs is the date the UCDs came into existence.

In his judgment, HHJ Hacon considered similar cases that had been brought in Germany where questions of law were raised, including a judgment of the German Federal Supreme Court in Gebäckpresse II [2008] (Case I ZR 126/06), which HHJ Hacon agreed with counsel for the defendant had a highly persuasive status. It was inferred that the German Courts had derived the following 3 points of law of which the CJEU had only previously clarified its position on No.3 in Gautzch:

"(1) for a design to be made available to the public in the Community within the meaning of art.11, the relevant event of disclosure must occur within the Community;

(2) since UCD protection does not exist until art.11 is satisfied, novelty is to be assessed as of the date of UCD protection coming into being;

(3) a design lacks novelty within the meaning of art.5(1)(a) if an event, within the meaning of art.7(1), has happened anywhere in the world, provided that the event could reasonably have become known to the relevant circles in the Community."

The German Courts held that the commencement of UCD protection requires a disclosure event within the EU geographical area and that any ambiguity on this point was clarified by Art.110(a)(5) CDR:

“Pursuant to Article 11, a design which has not been made public within the territory of the Community shall not enjoy protection as an unregistered Community design.”

While the 1st and 2nd points of law had not previously been considered by the CJEU, the German Courts held that a referral to CJEU was unnecessary because the provision above made any referable points of law acte clair. This view was not shared by HHJ Hacon who held that the points of law were not acte clair and also noted that owing to the UK's impending exit from the EU the Court of Appeal is unlikely to be entitled to make a reference should there be an appeal. It was also considered that there is a public interest in clarifying whether or not the disclosure of a design must first occur within the EU in order that it may be afforded UCD protection. The answer to this may play an important role in determining where designers decide to first market their products in the future; this is likely to affect the attractiveness of the UK for designers should Brexit go ahead.   

The Court referred the following questions to the CJEU: 

1.    "For the protection of an unregistered Community design to come into being under art.11 of Council Regulation (EC) No. 6/2002 of 12 December 2001 ('the Regulation'), by the design being made available to the public within the meaning of art.11(1), must an event of disclosure, within the meaning of art.11(2), take place within the geographical confines of the Community, or is it sufficient that the event, wherever it took place, was such that, in the normal course of business, the event could reasonably have become known to the circles specialised in the sector concerned, operating within the Community (assuming the design was not disclosed in confidence within the terms of the final sentence of art.11(2))?

2.    Is the date for assessing the novelty of a design for which unregistered Community design protection is claimed, within the meaning of art.5(1)(a) of the Regulation, the date on which the unregistered Community design protection for the design came into being according to art.11 of the Regulation, or alternatively the date on which the relevant event of disclosure of the design, within the meaning of art.7(1) of the Regulation, could reasonably have become known in the normal course of business to the circles specialised in the sector concerned, operating within the Community (assuming that the design was not disclosed in confidence within the terms of the final sentence of art.7(1)), or alternatively some other, and if so, which date?"