SCA decision to have significant implications for car and spare part manufacturers

South Africa

Beauty is in the eye of the beholder, but not insofar as a spare part is concerned - this is essentially the implication of a recent judgment by the Supreme Court of Appeal (Bayerische Motoren Werker Aktiengesellschaft v Grandmark International (Pty) Ltd ((722/12) [2013] ZASCA 114, September 18 2013)), in which the court dismissed an appeal by Bayerische Motoren Werker Aktiengesellschaft (BMW) against an earlier ruling by the North Gauteng High Court. 

Earlier this year the North Gauteng High Court caused quite a buzz amongst motor manufacturers and spare part suppliers alike when it ruled in favour of Grandmark International (Pty) Ltd when taken to task for design infringement by BMW. In particular, the court held that it is not possible to file aesthetic design applications for articles in the nature of spare parts for motor vehicles. In the case in point, these articles included a bonnet, a grille, a headlight assembly and a front fender. The court a quo held that these articles did not meet the definition of 'aesthetic designs' as set out in the Designs Act, in that they are articles of a pure functional nature, and not articles having features which appeal to, and are judged solely by, the eye. 

The Supreme Court of Appeal took this a step further and stated that aesthetic designs are those that invite customer selection – and customer discrimination between articles – solely on their visual appeal. The court proceeded to argue that, even though the appearance of a vehicle per se may play a material role in customer selection thereof, the designs in issue were designs of individual components that make up a motor vehicle and such designs therefore have to be judged for the qualities of the individual components, independently of the design of the built-up vehicle. The court was of the view that the articles embodying the designs (ie, the spare parts or replacement parts) are not selected by customers for their appeal to the eye, but that they are selected solely for the function they perform - which function is to restore the vehicle to its original form.

The judgment leaves a number of lingering questions. For example, if the judgment is given a strict interpretation, and if it is therefore true that aesthetic designs are those that invite customer discrimination between articles solely by their visual appeal, many existing aesthetic designs are hovering on the brink of invalidity. This is so because in most cases the visual appeal is but one aspect that a consumer takes into account when deciding which product to buy. Obviously a user will be influenced by the visual appeal of an article, but will hardly ever be swayed into buying a particular car, watch, shoe or container solely due to its visual appeal.

Also, there is a subtle but significant difference between an article which is of a functional nature, and an article having some functional features. The mere fact that an article has a function should not be the deciding factor – the question should rather be whether the features of an article (for example the fluting on a bonnet, or the pattern applied to a grille) are functional in nature. However, be that as it may, as the law currently stands spare parts have been booted out of the domain of aesthetic designs, which is a development that will have considerable implications for vehicle manufacturers and spare part suppliers alike. 

On the trademark front, the court held that the use of the letters 'BM' in the part numbering convention of the Grandmark parts did not constitute trademark infringement. The court was of the view that the manner in which Grandmark used the letters ‘BM’ did not constitute use as a trademark, as it was not used as a badge of origin. 

Lodewyk Cilliers, Spoor & Fisher, Pretoria

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