Article 14(3) of Community Designs Regulation clarified

European Union
In Fundación Española para la Innovación de la Artesanía v Cul de Sac Espacio Creativo SL (Case C-32/08, July 2 2009), a reference for a preliminary ruling from the Alicante Mercantile Court (Spain), the European Court of Justice (ECJ) has clarified the meaning of Article 14(3) of the Council Regulation on Community Designs (6/2002).
Article 14(3) provides that:
"where a design is developed by an employee in the execution of his duties or following the instructions given by his employer, the right to the Community design shall vest in the employer, unless otherwise agreed or specified under national law."
Fundación Española para la Innovación de la Artesanía (FEIA) designed a project known as ‘D’ARTES’, in which 50 skilled workshops in various sectors could produce, by means of a design project executed by a professional in the field, a family of objects to be placed on the market. AC&G SA, as organizer, set the parameters of the D’ARTES project and was given responsibility for selecting the designers and concluding agreements with them. AC&G then entered into an oral agreement with Cul de Sac Espacio Creativo SL which was not subject to the Spanish Labour Code. Under the agreement, Cul de Sac was responsible for developing a design and providing technical assistance to a craftsman with a view to creating a new collection of products. As payment for its services, Cul de Sac received the sum of €1,800 from AC&G.

Cul de Sac designed a series of cuckoo clocks which were manufactured, in the context of the D’ARTES project, by the craftswoman Verónica Palomares. The clocks were released in April 2005 as part of the 'Santamaría' collection. Cul de Sac and Acierta Product & Position SA subsequently produced and placed on the market cuckoo clocks as part of the 'Timeless' collection. FEIA considered that those cuckoo clocks were a copy of the unregistered Community designs which made up its ‘Santamaría’ collection, which it claimed to own because of:
  • its position as sponsor and main source of finance for the D’ARTES project; and
  • the assignment to it by AC&G of the exclusive rights to exploit the products manufactured in the first D’ARTES series.
FEIA sued Cul de Sac and Acierta for infringement of its Community designs and unfair competition. Cul de Sac and Acierta disputed that AC&G and/or FEIA ever owned those designs. Accordingly, they claimed that FEIA had no standing to bring the action. The court considered that FEIA could assert ownership only if AC&G, which purportedly assigned such ownership to it, itself owned the right to those designs. It accordingly stayed the proceedings and referred several questions to the ECJ for a preliminary ruling. In short, the court asked whether Article 14(3) of the regulation applies to Community designs which have been produced as a result of a commission and, therefore, outside an employment relationship.
The ECJ ruled that Article 14(3) of the regulation does not apply to Community designs that have been produced as a result of a commission. Moreover, it held that:
"[i]n circumstances such as those of the main proceedings, Article 14(1) of Regulation  6/2002 must be interpreted as meaning that the right to the Community design vests in the designer, unless it has been assigned by way of contract to his successor in title."
Jeremy Phillips, IP consultant to Olswang, London

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