AG gives opinion on ‘defensive’ Community design registrations

European Union
Advocate General Paolo Mengozzi has presented his conclusions in Celaya Emparanza y Galdós Internacional SA v Proyectos Integrales de Balizamientos SL (Case C-488/10, November 8 2011), a request for a preliminary ruling by Spain’s Community design court (the Commercial Court Number 1 of Alicante). The request was lodged within the context of an infringement action brought by Celaya Emparanza y Galdós Internacional SA (Cegasa) against Proyectos Integrales de Balizamientos SL.
 
Cegasa, the holder of a registered Community design (RCD) protecting a road beacon, became aware that Proyectos was marketing a product which, in Cegasa’s view, infringed its RCD. Cegasa sent Proyectos an extra-judicial demand requiring that it cease marketing the product. However, Proyectos did not stop the commercialisation of the product, and even proceeded to register the shape of the product as a Community design.
 
Cegasa sued Proyectos before the Commercial Court Number 1 of Alicante for infringement of its RCD. In its defence, Proyectos claimed that the allegedly infringing product was protected by its registration as a RDC; therefore, Cegasa could not prevent Proyectos from using its design, unless it was expressly declared invalid.
 
In this context, the Spanish court referred two questions to the Court of Justice of the European Union.
 
First, it asked whether a plaintiff could bring an infringement action against the holder of an infringing design that was subsequently registered, or whether - as alleged by Proyectos - it could do so only if the subsequent design was declared invalid.
 
As pointed out by Mengozzi, the issue raised by the Alicante court is a matter of doctrinal and jurisprudential debate in Spain. With regard to trademarks, there is a jurisprudential trend set by the Supreme Court under which a national trademark confers a ius utendi (right to use) to its owner, so that trademark infringement actions may be successfully brought only if an invalidity action against the infringer’s trademark has also been brought, either previously or simultaneously. However, the advocate general stated that this case law should not be applied to designs because, as opposed to trademarks, designs are granted almost automatically, without conflict checks and opposition proceedings. The speed and ease with which Community designs can be registered could lead to a high risk of abuse if, as with trademarks, registration conferred a right to use them.  
 
According to the advocate general, there is a conflict between:
  • the legal certainty afforded to the holder of the prior design - the protection of the RCD would be weakened if, in order to file an infringement action, the owner of the RCD was required to obtain the invalidation of the defendant's subsequent design; and
  • the legal certainty afforded to the alleged infringer and holder of the subsequent design.
Faced with this conflict, the advocate general opined that the rights of the plaintiff - the holder of the earlier RCD - should prevail; otherwise, the RCD system would be seriously jeopardised. In the advocate general’s opinion, an infringer, when confronted with the threat of an infringement action, could register the infringing product as a design in order to prevent the holder of the earlier RCD from exercising its rights, obliging the latter to first obtain a declaration of invalidity of the subsequent design. The subsequent design could also be registered after the filing of the lawsuit, or the infringer could keep registering similar designs in order to continue marketing the infringing product.
 
If the plaintiff was forced to bring an invalidity action in order to bring an infringement action successfully, parties acting in bad faith would be able to take advantage of the system by registering ‘defensive’ designs to delay the judicial proceedings and to prevent the effective enforcement of validly registered rights.
 
Therefore, the advocate general considered that the holder of a RCD should be able to bring an infringement action against the owner of a design that was subsequently registered in its name without it being necessary to first obtain a declaration of invalidity of the later design.
 
In its second question, the Alicante court asked whether the answer to the first question depended on the conduct of the alleged infringer. Under this point of view, a plaintiff would be allowed to bring an infringement action without first obtaining a declaration of invalidity if the subsequent design had been registered in bad faith or, as in the main proceedings, after an extra-judicial demand, but not if the subsequent design had been deposited in good faith.
 
While this was an interesting approach, the advocate general considered that it would greatly complicate a system that the legislator sought to keep simple and effective. Furthermore, while the Council Regulation on Community Designs (6/2002) takes into account the infringer’s intent to determine the scope of protection of unregistered designs, this was not the case for registered designs. Therefore, the advocate general suggested that the infringer’s intent should not be taken into consideration.
 
Carlota Viola, Grau & Angulo, Barcelona

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