East Scandic ordered to pay compensation to BMW for trademark violation

BMW is the owner of various EU design registrations for wheel rims and is also the owner of a number of trademark registrations in the European Union and Denmark.

East Scandic was marketing wheel rims, which BMW found to be imitations of its wheel rims, and sold them under the designations 'BMW M10', 'Replica M10' and 'Crom Paint M3 BMW'.

BMW claimed that East Scandic had violated its design and trademark rights and claimed Dkr250,000 as compensation and remuneration.

East Scandic asked for a stay of the proceedings before the Maritime and Commercial Court with reference to the EU Community Designs Regulation (6/2002). The court refused this request as East Scandic had not proven that it had filed an objection against the validity at the Office for Harmonisation in the Internal Market (OHIM). The Maritime and Commercial Court found for BMW.

On appeal, East Scandic claimed that the Supreme Court must consider its contention that BMW's design registrations were invalid due to a lack of individual character. Information was provided that, following the Maritime and Commercial Court judgment, East Scandic had filed an opposition at OHIM against the validity of BMW's design registration, but OHIM had rejected the claim. East Scandic did not appeal OHIM's decision and, according to Article 57 of the Community Designs Regulation, the decision was final.

The Supreme Court stated that, according to Article 86(5) of the Community Designs Regulation, a claim for invalidity of a registered EU design must be rejected as OHIM had already made a final decision in a matter concerning the same question between the parties.

Further, East Scandic claimed that, even if BMW's registered designs were valid, they could not be enforced due to Article 110 of the Community Designs Regulation, as wheel rims are part of a complex product (a car) and are manufactured and used for the purpose of repairing that complex product to restore its original appearance.

The Supreme Court stated that aluminium wheel rims have an individual design. The appearance of a car is not crucial for the design of a wheel rim, such that only one design of the wheel rim is possible. Unlike a spare part (eg, a front fender, which must be identical to the fender that it replaces), it is normal for aluminium wheel rims to be produced and used to give a car another – typically smarter – look. Aluminium wheel rims are not normally used to recreate the original appearance of a car. Rather, they are used to decorate and upgrade its overall appearance and wheel rims with different designs may be used on the same car, just as the same wheel rim design may be used on different car models. The Supreme Court found that aluminium wheel rims could not be considered to fall under Article 110 of the Community Designs Regulation and that, consequently, this rule could not be used to prevent BMW from enforcing its registered designs for wheel rims.

The Supreme Court found that the wheel rims which East Scandic marketed did not produce on the informed user an overall impression different from that of BMW's registered designs and, consequently, there was a violation of BMW's design rights. As East Scandic had been marketing wheel rims using BMW's trademarks in a way that could give the customer the impression that the goods originated from BMW, this use was outside the scope of Section 5(3) of the Act on Trademarks and Article 12(c) of the Community Trademark Regulation (40/94). As a result, the Supreme Court found that East Scandic had violated BMW's trademark rights and largely confirmed the Maritime and Commercial Court judgment that East Scandic must pay Dkr250,000 and Dkr125,000 as costs, in addition to the Dkr75,000 that it had been ordered to pay by the Maritime and Commercial Court.

Mads Marstrand-Jørgensen, NJORD Law Firm, Copenhagen