ECJ clarifies key concepts in first substantive decision on Community designs

European Union
In PepsiCo Inc v Grupo Promer Mon Graphic SA (C-281/10 P, October 20 2011), the Court of Justice of the European Union (ECJ) has handed down its first substantive judgment on the Community Designs Regulation (6/2002). This decision gives guidance on concepts that are key to interpreting and applying provisions of the regulation. It also re-confirms the respective roles of the General Court and ECJ on appeals from the Office for Harmonisation in the Internal Market (OHIM).

The regulation provides in Article 6 that a design shall be considered to have individual character "if the overall impression it produces on the informed user differs from the overall impression produced on such a user by any design which has been made available to the public" either before:
  • the design is first made available to the public (for unregistered designs); or 
  • the date on which an applicant files for protection (or the priority date, if applicable).
Although this case was not about infringement, the same test of overall impression on the informed user is used when infringement is assessed under Article 10. Under both articles, in conducting this analysis the degree of freedom of the designer is to be taken into account.

In the present case, PepsiCo Inc applied to register a Community design in 2003, claiming priority from a design filed in Spain on July 23 2003. The design was registered as a 'promotional item for games', and consisted of a thin flat disc, commonly known as a 'tazo', 'pog' or 'rapper'. These items are collectibles, such that people interested in collecting and playing games or trading with them (here, mainly children) rapidly become knowledgeable about these items and their design and features.

Grupo Promer Mon Graphic SA filed an application for a declaration of invalidity on the basis:
  • of prior rights in the form of its registered design which claimed priority from a design filed on July 8 2003; and
  • that the PepsiCo design lacked novelty and individual character.
The PepsiCo design:

The Promer design:

The Invalidity Division of OHIM granted the declaration sought on the basis of Promer's prior right. The Board of Appeal annulled this decision, holding that PepsiCo's design did not conflict with Promer's prior right. The board considered that the freedom of the designer was 'severely constricted' in this field of promotional item, given the inherent limitations in producing these types of items. The design constraints imposed by the technical function of the products in this case included the size and profile of the disc (which was small, circular and had to be slightly curved towards the centre, so that the disc made a noise if the centre of the disc was pressed). The board also noted that these items had to be inexpensive, safe for children and fit to be added to the products promoted by using the discs. The board further noted that, if the designer's freedom is restricted, it is more likely that minor differences will be sufficient to produce a different overall impression. 

The General Court overturned the findings of the board. It found that there were a large number of similarities between the designs at issue, such as the concentric circle displayed on the upper surface of the disc, the dimensions of the raised central part and the intermediate area of the discs. It found that the differences (eg, the fact that the PepsiCo design had two additional circles compared with the prior design and the greater degree of curvature of the Pepsico design) were insufficient for the PepsiCo design to produce a different overall impression from the Promer design on the informed user, particularly as the difference in curvature would not be easily perceived by the informed user. This decision was upheld by the ECJ.

The ECJ first confirmed that the 'informed user' is better informed than the 'average consumer', whose perspective is relevant in trademark matters and who may make no direct comparison between the marks in conflict. The informed user is not a user of average attention, but a particularly observant one, due to his or her personal experience or extensive knowledge of the sector in question (Paragraph 53 of the judgment). The informed user will know the various designs which exist in the sector concerned, is likely to have a certain degree of knowledge about the features these types of design would usually include and shows a relatively high degree of attention when using them. 

The 'collectibles' subject matter of this case highlights how a user, as opposed to a design expert, may pay a high degree of attention to, and have an extensive and detailed knowledge of, the relevant area of design. On the facts, it was held that the informed user would be a child in the approximate age range of five to 10 years old, or a marketing manager in a company which makes these types of promotional item. 

It follows from this judgment that the informed user in fashion-led or design-led fields (eg, clothing, bags, shoes or luxury furnishings or vehicles) is likely to be fashion aware and design aware in relation to the relevant field. The concept may be more difficult to apply to products where the design aspects of the product are of less significance than price or functionality. In such a case, the informed user is perhaps likely to be a well- researched or experienced purchaser.   
One of the grounds of appeal to the ECJ was that the evidence before the General Court had compared sample products to the designs at issue, whereas the comparison when assessing alleged conflict with a prior right should have been made based on the designs, as such.

The ECJ held that the General Court's assessment had been based on the designs at issue, as described in the relevant applications. It found that the General Court's reference to the actual goods was only for illustrative purposes, confirming the conclusions it had already reached in relation to the overall impression of the designs. It also noted that the perspective of the informed user means that it is not a mistake to take account of goods actually marketed which conform to the designs when assessing overall impression.

With regard to the review jurisdiction of the courts, the ECJ held that the General Court's analysis of the differences between the designs was within the Article 61 review jurisdiction of the court with respect to appeals from the Board of Appeals.

The ECJ reiterated that it will not interfere with the General Court's findings of fact, unless an appellant can show that the "clear sense of the evidence has been distorted" by the General Court. Moreover, complaints that the General Court has distorted the facts when exercising its review function are deemed to be complaints of an exceptional nature. Therefore, an appellant wishing to argue distortion must indicate precisely the evidence that has been distorted and must show the errors of appraisal which led to that distortion. This distortion must be obvious from the documents on the court file without the need for the ECJ to carry out a new assessment of the facts and evidence, meaning that it can only be in exceptional cases that the ECJ will disagree with the General Court's findings of fact.

Vanessa Marsland and Anna Blest, Clifford Chance LLP, London  

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