European Union: Unregistered Community Design Right: CJEU Provides Welcome Clarification For Designers

Summary and Implications

In a long running dispute between Karen Millen, the well known British brand and retailer of women's clothing, and the Irish retailer Dunnes Stores, the Court of Justice of the European Union ('CJEU') has issued a decision¹ which will assist in the protection of product designs in the EU, whether in the fashion industry or otherwise.

Unregistered Community design right is a particularly important intellectual property right in industries producing multiple designs for products which frequently have a short market life, such as seasonal fashion collections. This is because it provides protection for numerous qualifying designs throughout the EU for a relatively short period of 3 years without the formality and cost, albeit modest, of obtaining a registered design (which can last up to 25 years).

In order to qualify for protection, a Community design (whether registered or unregistered) must be new and have individual character. Essentially the design must create a different overall impression on the informed user of the design from any design which has previously been made available to the public.

In its decision the CJEU has given some welcome guidance on the requirements for assessing 'individual character' and the burden of defending the validity of an unregistered Community design right.

The CJEU decided that:

1. When considering whether an unregistered Community design right has individual character the overall impression it produces must be different from one or more earlier designs taken individually and not from a combination of features taken in isolation and drawn from a number of earlier designs.
2. In infringement proceedings, in order for a court to treat an unregistered Community design right as valid, the right holder need only indicate (not prove) what constitutes the individual character of that design.

It is now clear that a third party wishing to challenge the validity of an unregistered Community design right (typically the defendant to infringement proceedings) cannot "mosaic" features from a variety of previous designs in order to demonstrate that the design in question lacks individual character. This is particularly relevant for the fashion industry where certain features are often inspired by reviewing vintage designs and where the skill of the designer is using that inspiration to create a new look.

The decision is also useful to holders of registered Community designs on the issue of assessing individual character. This is because the regulation governing unregistered Community design right also covers registered Community designs and the two rights have many provisions of the regulation in common, including the key requirements for protection.

The Community designs regulation provides that in an action for infringement of an unregistered Community design right the courts should presume that the design is valid. The CJEU's judgment confirms that it is not necessary for a design holder to prove that the design has individual character in order to bring a claim for infringement. All that is necessary is to provide an indication of what, in the holder's view, are the elements of the design which give it its individual character. This does not stop a defendant from being able to contest the validity of the design by way of counterclaim (which will usually be the case), and to assert that the design does not have individual character, but the design holder is not obliged to prove their right up front.

On a practical note, right holders should ensure they have a clear record of all features of their design which they consider have individual character, together with the inspiration behind and creative process involved in the production of the design.

The Case in Detail

Karen Millen designed and placed on sale in Ireland a striped shirt and a black knitted top.

Samples of the garments were purchased from one of Karen Millen's Irish outlets by Dunnes Stores. Dunnes (which, amongst other things, sells women's clothing) subsequently had copies of the garments manufactured outside Ireland and put them on sale in its Irish stores.

Karen Millen successfully sued Dunnes for infringement of unregistered Community design right and Dunnes appealed to the Irish Supreme Court.

Interestingly, Dunnes did not dispute that it had copied Karen Millen's garments and even acknowledged that the unregistered Community designs of which Karen Millen claimed to be the holder were new designs. However, it disputed that Karen Millen was the holder of an unregistered Community design right for each of the garments on the grounds that:

1. the garments did not have individual character; and
2. the Regulation required Karen Millen to prove, as a matter of fact, that the garments had individual character.

The Irish Supreme Court decided to stay the proceedings and refer the following two questions to the CJEU:

1. When considering the individual character of a design, is the overall impression it produces on the informed user to be considered by reference to whether it differs from the overall impression produced on such a user by:
   
   
   1. any individual design which has previously been made available to the public; or
   2. any combination of known design features from more than one such earlier design?
2. Is an unregistered Community design right to be treated as valid for the purposes of the Regulation where the right holder merely indicates what constitutes the individual character of the design or are they obliged to prove that the design has individual character?

The first question:

The CJEU commented that there is nothing in the wording of Article 6 of the Regulation to support the view that the overall impression must be produced by a combination of known design features from more than one earlier design. Reference to the overall impression produced on the informed user by 'any design' indicates that Article 6 must be interpreted as meaning that the assessment must be conducted in relation to one or more specific, individualised, defined and identified designs from among all the designs which have been made available to the public previously.

The CJEU noted that this interpretation is in keeping with the findings of previous case law, namely that where possible the informed user will make a direct comparison between the designs at issue because that type of comparison actually relates to the impression produced on that user by earlier individualised and defined designs, as opposed to an amalgam of specific features or parts of earlier designs.³

Accordingly the CJEU concluded that in order for a design to be considered to have individual character, the overall impression which that design produces on the informed user must be different from that produced on such a user not by a combination of features taken in isolation and drawn from a number of earlier designs, but by one or more earlier designs, taken individually.

The second question:

Article 85 of the Regulation establishes a presumption of validity of unregistered Community designs. Dunnes argued that this presumption was, by its very nature, incompatible with the interpretation of Article 85(2). It said that validity needed to be proved in order to met the first condition in Article 85(2) i.e. demonstrating that the conditions of Article 11 had been met (see footnote 2).

The CJEU said that Dunnes' interpretation would have the effect of rendering meaningless the second condition in Article 85(2), namely, that the holder of a design must indicate what constitutes the individual character of that design. It added that if Article 85(2) was interpreted as meaning that an unregistered Community design right may be treated as valid only if its holder proves it is, would render the possibility for the defendant to contest the validity of that design largely meaningless.

The CJEU concluded that in order for a court to treat an unregistered Community design as valid, the right holder is not required to prove that it has individual character but need only indicate what constitutes the individual character of that design, that is to say, indicate what, in the holder's view, are the elements of the design concerned which give it its individual character.

This does not stop the defendant from being able to contest the validity of the design, but does mean that the right holder does not, up front, have the burden of proving that the design has individual character.

This provides clear guidance, which is binding on all courts in the EU, on the implementation of these elements of the Regulation.

Footnotes

1 Karen Millen Fashions Ltd v Dunnes Stores, Dunnes Stores (Limerick) Ltd, Case C-345/13, 19 June 2014

2 Article 11: "A design which meets the requirements under Section 1 [i.e. Articles 3 to 9] shall be protected by an unregistered Community design for a period of three years as from the date on which the design was first made available to the public within the Community".

3 The CJEU recognised, however, that a direct comparison might be impracticable or uncommon in the sector concerned, in particular because of specific circumstances or the characteristics of the items which the earlier mark and the design at issue represent.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.