Community Designs solely dictated by their technical function? What we found out after CJEU ruling on the case C‑395/16?

No one needs to be convinced that the applicable provisions of law are sometimes ambiguous. This also applies to the European Union law, but the European legislator has provided for a possible solution. Pursuant to Article 267 of the Treaty on the Functioning of the European Union, the Court of Justice of the European Union (CJEU) shall have jurisdiction to give preliminary rulings concerning the interpretation of acts of the institutions, bodies, offices or agencies of the Union. Therefore, if a national court directly applying the EU legal acts has any doubt as to their interpretation, and a decision in this respect is necessary to issue a judgment, the court may address the CJEU with specific legal questions.

As regards the provisions of the applicable Council Regulation (EC) No. 6/2002 of 12 December 2001 on Community designs (OJ L 2002, No. 3, p. 1; hereinafter: “CDR”), the CJEU has repeatedly given its opinion in response to questions referred for a preliminary ruling. However, the last judgment, issued on 8 March 2018, was to dispel substantial doubts concerning the option to exclude Community design protection for features of appearance of a product which are solely dictated by its technical function (Article 8(1) of the of the CDR). So what more about the subject can we say after that ruling?

Litigation in case DOCERAM GmbH v CeramTec GmbH

The dispute that formed a basis for the CJEU to issue the judgment was initiated by a German company, DOCERAM GmbH, which filed claims arising from its rights to registered Community designs in the form of centring pins available in three geometric shapes, each of which having several variants.

Example of Community designs registered for DOCERAM GmbH(Locarno, 08/05: Centring and Positioning Pins):

From the left: RCD 000242730-0001, RCD 000242730-0006, RCD 000242730-0008

As found by the regional court in Düsseldorf, the defendant, CeramTec GmbH, manufactures and places on the market centring pins of the same types as the ones registered as Community designs of DOCERAM GmbH (with an identical overall impression). In response to the claims lodged against it, CeramTec GmbH used the classic form of defence, which in such cases consists in filing a counterclaim for invalidation of rights arising from the registration of Community designs by the principal claimant. In the counterclaim, the company stated that the features of the products in question (centring pins), registered as Community designs, were solely dictated by their technical function (Article 25(1)(b) of the CDR in conjunction with Article 8(1) of the CDR).

The Court of First Instance has dismissed the principal claim and allowed the counterclaim, sharing the opinion that the features of appearance of the disputed centring pins, registered as Community designs, are determined only by their technical functions. The opinion was challenged by DOCERAM GmbH, which filed an appeal, indicating that there are alternative designs of the said centring pins, which are not protected as registered Community designs. This has raised a question whether it is possible to refer to other existing designs that perform the same technical function in order to exclude that a specific feature of appearance of a product is solely dictated by its technical function. In such case, we also face the question whether the technical function is the only factor that determines the said features of appearance of a product.

Considering the discrepancies existing in the case-law, the Higher National Court in Düsseldorf presented the CJEU with the following two questions for a preliminary ruling:

1) Are the features of appearance of a product solely dictated by its technical function, within the meaning of Article 8(1) of the RCD which excludes protection, also if the design effect is of no significance for the product design, but the (technical) functionality is the sole factor that dictates the design?

2) If the Court answers Question 1 in the affirmative: From which point of view is it to be assessed whether the individual features of appearance of a product have been chosen solely on the basis of considerations of functionality? Is an “objective observer” required and, if so, how is such an observer to be defined?

Opinion of the Advocate General of 19 October 2017

Before the judgment was made on 19 October 2017, the issue had been addressed by Henrik Saugmandsgaard Øe, Advocate General of the CJEU. By indicating the legal framework, he referred to the recitals of the Council Regulation (EU) No. 6/2002, which stipulate that “technological innovation should not be hampered by granting design protection to features dictated solely by a technical function. It is understood that this does not entail that a design must have an aesthetic quality. (…) Consequently, those features of a design which are excluded from protection for those reasons should not be taken into consideration for the purpose of assessing whether other features of the design fulfil the requirements for protection” (recital 10).

When analysing the provisions of Article 8(1) of the CDR, the Advocate General noted that currently, while interpreting the article, there is a tendency to depart from the criterion of alternative designs in favour of the criterion of causality. Thus, we should principally refer to the causes for which the creator has included the disputed feature in the product. If the requirement to fulfil a specific technical function was the only circumstance determining the discussed design, then the condition provided for in Article 8(1) is satisfied. We should also take into account the artistic effort and the scope of artistic freedom when developing the design. Given the foregoing, Henrik Saugmandsgaard Øe has emphasized that the discussed limitation of right under registration of a Community design does not refer to cases where “the features in question are the only means of fulfilling the technical function of a product, but to cases where the need to achieve that function is the only factor to explain the adoption of those features” (point 29 of the opinion letter).

Being in favour of adopting the causality criterion, the Advocate General referred to the purposes of the Regulation and to its historic interpretation. Among other things, he has indicated that in the Commission’s original proposal from 1993 the present provision of Article 8(1) of the CDR was worded as follows: “A Community Design right shall not subsist in a design to the extent that the realisation of a technical function leaves no freedom as regards arbitrary features of appearance”. He has also referred to the other question for a preliminary ruling, pointing out that in this respect the assessment in question must be conducted by the court hearing the case “in the light of all the circumstances surrounding the choice of its features of appearance, bearing in mind the evidence provided by the parties, regardless of the subject or the nature of that evidence, and bearing in mind any measures of inquiry ordered by that court” (point 66). Therefore, it is not necessary to refer to the model of ‘objective observer’, which in the present legal status is unknown to the provisions of the Council Regulation (EC) No. 6/2002.

Opinion of the Court of Justice presented in the judgment of 8 March 2018

Although, when issuing a judgment in a case, the Court is not bound by a legal opinion of the Advocate General, in this case the previously presented reasoning was fully supported in the decision. The judgment presented the following two replies to the questions for a preliminary ruling asked by the German court:

1) Article 8(1) of the CDR must be interpreted as meaning that in order to determine whether the features of appearance of a product are exclusively dictated by its technical function, it must be established that the technical function is the only factor which determined those features, the existence of alternative designs not being decisive in that regard;

2) Article 8(1) of the CDR must be interpreted as meaning that, in order to determine whether the relevant features of appearance of a product are solely dictated by its technical function, within the meaning of that provision, the national court must take account of all the objective circumstances relevant to each individual case. In that regard, there is no need to base those findings on the perception of an ‘objective observer’.

When judging in this case, the Court noted that the expression ‘features of the appearance of a product which are solely dictated by its technical function’ designated an autonomous concept of EU law which must be interpreted in a uniform manner in all the Member States. What is important, it has also indicated that the adoption of the criterion of existence of alternative designs from the point of view of interpreting the provision of Article 8(1) of the CDR could lead to a situation where entrepreneurs would intentionally register a range of the product forms covering its features of appearance solely dictated by technical function. In this way, the provisions of patent law could be evaded, as the right under registration of a Community design would actually guarantee the same level of protection but without having to meet the requirements applicable for obtaining a patent. The adoption of such interpretation would imply the risk of limiting technological innovations and would deprive the provision of Article 8(1) of the CDR of its effectiveness (effet utile).

In response to the question for a point of reference necessary to assess whether the individual features of appearance of a product are only determined by its technical functions, the Court sustained the opinion expressed in that regard by the Advocate General. It has also pointed out that the Council Regulation (EC) No. 6/2002 does not set out any legal solutions in this respect.

Do we indeed know more now?

The recently issued judgment of the CJEU in case C‑395/16 clarifies certain aspects of the issue in question, which previously were subject to discrepancies in the case-law and the literature concerning Community designs.

It is worth emphasizing that the assessment whether a particular feature of appearance of a product is solely dictated by its technical features is relevant in terms of both the procedure of registering a Community design (which is suggested even by the mere location of the provision of Article 8(1) of the CDR in Title II, Section 1 of the Regulation, titled “Requirements for protection”) and the scope of protection guaranteed by the exclusive right to the registered design. This means that a registered Community design may be effectively invalidated if it is proved that all the features of appearance of the protected product are solely dictated by technical functions. In addition, the demonstration that the registered design shows features determined only by their functional (technical) aspect narrows down the scope of its legal protection, which may be of crucial importance to the subsequent assertion of claims under the violation of registration right.

The hitherto practice of the EUIPO allows to conclude that it is relatively rare that a right under registration of a Community design is invalidated with reference to Article 8(1) of the CDR. It is not easy to demonstrate that a specific design does not have any features other than those dictated by its technical functions (cf. e.g. EUIPO decision of 29/04/2010 r., case no. R 211/2008-3, where an earlier patent document was invoked). On the other hand, in proceedings for the violation of a right under registration of a Community design, it is the court hearing the case which must assess which elements of the design (as full determined by technical functions) should be excluded from protection.

Certainly, the Court judgment of 8 March 2018 ends the discussion on whether it is possible to invoke the theory of alternative designs as the only criterion to determine which features of appearance of a product can be deemed to be solely dictated by technical functions. However, if we adopt the causality criterion, this raises further doubts, for example the need to refer to the reasons (circumstances) why a given feature of the product has been included by its creator. A reference made to the scope of artistic freedom, which exists in this case, may also turn out to be insufficient to clearly distinguish the features of appearance of a product that can be considered to be fully (or only partially) dictated by its technical functions.

With no doubt, the discussed judgment will harmonise the trends in further judicial pronouncements and affect the practice in applying Article 8(1) of the CDR by the EUIPO. It may also have an indirect influence on the judgments made by national courts of the European Union Member States. It will surely be noted in the new EUIPO guidelines concerning Community designs, to be published in the second half of 2018.

Therefore, to give an answer to the question raised in the title, we may conclude that we do know more than before. Nevertheless, in order to dispel the remaining doubts, we will certainly have to wait until the CJEU issues another decision in this regard.