Karen Millen v Dunnes Stores: CJEU clarifies ‘individual character’ requirement for Community designs

Author: Nina O'Sullivan (King & Wood Mallesons SJ Berwin, London)

Karen Millen Fashions Ltd v Dunnes Stores, Dunnes Stores (Limerick) Ltd, C-345/13, EU:C:2014:2013, Court of Justice of the European Union, 19 June 2014

Journal of Intellectual Property Law & Practice (2014) doi: 10.1093/jiplp/jpu153, first published online: September 9, 2014

The Court of Justice of the European Union (CJEU) has confirmed that, when assessing the individual character of a Community design, it is not legitimate to do so by reference to a combination of features taken from a number of earlier designs. The assessment must instead be made by reference to specific earlier designs taken individually. The CJEU has also confirmed that the holder of a Community design does not need to prove that its design has individual character but must merely indicate what constitutes the individual character of that design.

Legal context

Council Regulation 6/2002 on Community Designs provides for two forms of protection for Community designs: the registered Community design (RCD) and the unregistered Community design (UCD).

Article 4(1) of the Regulation provides that a design will be protected by a Community design to the extent that it is new and has individual character.

Article 6(1) provides that a design will have individual character:

[I]f 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:

(a) in the case of an unregistered Community design, before the date on which the design for which protection is claimed has first been made available to the public … .

Article 11 provides that an unregistered design that meets the requirements in Section 1 (i.e. Articles 1-9) of the Regulation shall be protected by UCD for three years from the date on which the design was first made available to the public within the Community.

In relation to infringement proceedings, Article 85(2) states:

[T]he Community design court shall treat the Community design as valid if the right holder produces proof that the conditions laid down in Article 11 have been met and indicates what constitutes the individual character of his Community design … .

Facts

In 2005 Karen Millen, a company, began marketing three women's fashion garments in Ireland: two striped shirts (one blue, one brown) and a black knit top. Dunnes Stores representatives bought samples of the garments and arranged for copies to be made on its behalf, which it put on sale in its Irish stores in late 2006. In January 2007, Karen Millen commenced proceedings in Ireland against Dunnes Stores for infringement of the UCD in its designs. Dunnes Stores accepted that it had copied the designs but disputed that the designs for the three garments were protected by UCD.

In particular, Dunnes Stores argued that:

* the garments did not have individual character as required by Article 6(1) and

* Karen Millen was required to prove, as a matter of fact, that the garments had individual character.

The High Court of Ireland decided in favour of Karen Millen. On appeal, the Irish Supreme Court referred two questions to the Court of Justice of the European Union (CJEU), summarized as follows:

When assessing the individual character of a design for UCD, is the overall impression it produces on the informed user to be considered by reference to whether it differs from the overall impression produced on such a user by:

* any individual design which has previously been made available to the public, or

* any combination of known design features from more than one such earlier design?

Is a Community design court obliged to treat a UCD as valid where the right holder merely indicates what constitutes the individual character of the design or is the right holder obliged to prove that the design has individual character?

Analysis

Individual character

The first question concerned the assessment of the overall impression that a design produces on the informed user compared to that produced by any earlier design which has been made available to the public. Dunnes Stores had relied upon a range of features taken from a number of earlier designs which it argued, taken in combination, meant that the Karen Millen designs lacked individual character.

The CJEU decided that the assessment of individual character should be made by reference to one or more specific earlier designs, taken individually. It rejected Dunnes Stores' argument that the court could take into account a combination of features drawn from a number of earlier designs.

In its earlier decisions on Community designs (Judgment in PepsiCo v Grupo Promer Mon Graphic, C-281/10 P, EU:C:2011:679, and Judgment in Neuman & others v José Manuel Baena Grupo, C-101/11 P and C-102/11 P, EU:C:2012:641), the CJEU had confirmed that, where possible, the informed user will make a direct comparison between the designs at issue. The CJEU emphasized, however, that it did not thereby shut out the possibility of an indirect comparison; a direct comparison could be impracticable or uncommon in the relevant sector (eg because of the characteristics of the items). Accordingly, in some cases it would be legitimate for a court to base the assessment on an imperfect recollection of the overall impression produced by those designs. However, as Advocate General Wathelet indicated in his Opinion, even an indirect comparison based on imperfect recollection was still conducted by reference to specific designs, rather than on specific features from several different earlier designs.

Dunnes Stores relied upon recitals 14 and 19 to the Regulation, which use the expressions ‘the existing design corpus’ and ‘in comparison with other designs’, respectively. However, the CJEU noted, these expressions were not carried through to the articles of the Regulation and did not, in any event, support the view that it was legitimate to take a combination of features in isolation from a number of earlier designs. Dunnes Stores also referred to Article 25(1) of the Agreement on Trade-related Aspects of Intellectual Property Rights (‘TRIPS Agreement’) which provides that ‘… Members may provide that designs are not new or original if they do not significantly differ from known designs or combinations of known design features … ’. However, the CJEU noted that this was optional wording; Member States were not required to provide for novelty or originality of a design to be assessed in comparison with such a combination of features.

Proof of individual character

On the second question, the CJEU decided that a UCD holder does not have to prove that its design has individual character, but only has to indicate what constitutes the individual character of the design. The wording of Article 85(2) was, the CJEU said, unambiguous. A requirement of proof of individual character would be contrary to the presumption of validity; it would make nugatory the requirement in Article 85(2) that the design holder must indicate what constitutes the individual character of the design and the possibility for the defendant to challenge validity. It would also be contrary to the objective of simplicity and expeditiousness which underpinned the reasoning behind the UCD. Accordingly, the UCD holder was simply required to identify the features of the design which gave it individual character.

Practical significance

Recitals 16 and 25 to the Regulation provide the context for the introduction of UCD, specifically noting its value for those sectors which produce large numbers of designs which may only have a short market life (or indeed which may not actually be commercialized). For those industries—a major one being the fashion industry—the UCD is a valuable right in that it provides an appropriate level (and term) of protection without imposing registration formalities and attendant costs. That said, where appropriate, applying for registered protection through an RCD does have distinct advantages over relying upon UCD protection. As well as providing a longer term of protection (up to 25 years), the registered right can more easily be exploited and enforced (with UCD, there is the additional need to prove copying, over and above the requirement that the alleged infringement does not produce a different overall impression on the informed user). Further, from October 2014, some infringements of registered designs can be the subject of criminal prosecutions in the UK.

The CJEU's decision, while framed in the context of UCD, applies equally to the assessment of individual character of RCDs and harmonized designs under the Design Directive (98/71). It sets a high hurdle for a party wanting to challenge the individual character of a design. The burden of proof is on that party to show that the design does not have individual character, which it will have to prove by reference to specific, earlier designs taken individually, rather than seeking to combine a number of features from the ‘design corpus’ as a whole. This is a particularly important finding for the fashion industry—where it is common for designers to draw on design aspects from a range of previous collections—but also for other design-led industries.

The individual character of a design: freedom and the ‘saturation of the state of the art’

Author: Stefano Barazza (Studio Legale Barazza, Udine, Italy)

Joined Cases T-83/11 and T-84/11, Antrax IT Srl v OHIM, General Court of the European Union, 13 November 2012

Journal of Intellectual Property Law & Practice (2013) doi: 10.1093/jiplp/jpt011, first published online: February 21, 2013

The General Court, reviewing a decision of the OHIM's Board of Appeal on the lack of individual character of a design concerning a thermosyphon for radiators, provides a thorough assessment of the notions of ‘informed user’ and ‘degree of freedom of the designer’, observing that the ‘saturation of the state of the art’ (crowded field) may be relevant to assess the degree of awareness of the informed user.

Legal context and facts

Antrax owned eight Community design registrations (RCD no 000593959–0001 to 000593959–0008), registered in 2006, for ‘radiators for heating’ (Class 23.03 of the Locarno Classification). In particular, designs 000593959–0001 and –0002 depict thermosyphons consisting of a series of straight vertical heating pipes, of rectangular shape, attached to two horizontal collectors, of cylindrical shape, placed at the upper and lower end of the heating body.

In 2008 The Heating Company filed an application for invalidity against both RCDs, for lack of novelty and individual character, in relation to an earlier design, registered in 2002 (German designs no 4 and 5, covered by multiple registration No 401 10481.8, published in September 2002 and valid in France, Italy and the Benelux as international design No DM/060899). By its decisions of 30 September 2009, the OHIM Invalidity Division declared the RCDs invalid for lack of novelty under Article 5 of Regulation 6/2002.

The Third Board of Appeal annulled this decision for failing to give adequate reasons for the lack of novelty, and proceeded to re-examine the application. The Board excluded the lack of novelty, as the differences between the designs could not be regarded as immaterial details (Article 5(2)). Assessing the lack of individual character, the Board first defined the informed user as the person who buys radiators for heating, in order to install them at home, after seeing and comparing different designs, through consultation of relevant magazines and websites or by visiting specialized shops. Noting that both the RCDs and the previous designs portrayed radiators equipped with vertical pipes of rectangular shape and cylindrical collectors, of similar lateral protrusion, the Board concluded that the overall aspect of the radiators appeared similar, in the eyes of the informed user, regardless of his angle of observation. It also added that the differences between the designs, mainly pertaining to the relationship between the width, depth and horizontal spacing of the pipes, as well as between the diameter of the collectors and the pipes' depth, were insufficient to alter the informed user's perception. The Board also rejected Antrax's argument as to the limited degree of freedom of the designer, noting that different solutions appeared possible. Consequently, relying on Arts 6 and 25(1)(b) of Regulation 6/2002, the Board declared the RCDs invalid for lack of individual character.

Antrax filed two separate applications with the General Court (later joined, under Article 50(1) of the Rules of Procedure), demanding that the Board of Appeal's decisions be annulled and the RCDs declared valid.

Analysis

The General Court first excluded the admissibility of several new documents, submitted by Antrax for the first time with the applications to the court, holding that the judicial review established by Article 61 of Regulation 6/2002 merely concerns the legitimacy of the decisions taken by the Board of Appeal and cannot amount to a re-examination of the matter, in light of documents which had not been made available during the procedures in front of the OHIM (ex multis, Case T-9/07 Grupo Promer Mon Graphic SA v OHIM [2010] ECR II–00981 and Case C-29/05 OHIM v Kaul GmbH [2007] ECR I-02213).

With its only plea, the applicant asserted the violation of Article 6 of Regulation 6/2002, claiming that the differences between the disputed designs and the prior art were sufficient to allow the informed user to distinguish the different designs, which thus presented an individual character.

The General Court began its assessment by defining the notion of ‘informed user’, which, according to PepsiCo Inc v Grupo Promer Mon Graphic SA Case C-281/10 P [2011], lies

‘… between that of the average consumer, applicable in trade mark matters, who need not have any specific knowledge and who, as a rule, makes no direct comparison between the trade marks in conflict, and the sectoral expert, who is an expert with detailed technical expertise’.

The informed user, therefore, appears to be a particularly observant person who, being neither the producer or seller of a product that incorporates the design at issue, nor a technical expert or designer, makes use of the product according to its intended aim, exhibiting a relatively high degree of attention when using it (Case T-153/08 Shenzhen Taiden Industrial Co v OHIM [2010] ECR II-02517), and who has knowledge of the prior art and of the features commonly implemented by similar products, through personal experience or extensive knowledge of the sector. The court added that the heightened sensitivity attributed to the informed user does not imply, however, that he is capable of distinguishing aspects related to the technical function of the product from those which are arbitrary.

Applying these principles, the General Court confirmed the Board of Appeal's definition of the informed user.

On the notion of individual character, the court examined its relationship to the degree of freedom of the designer, noting that restrictions dictated by technical or regulatory constraints may result in standardization of some of the features of the products which implement the disputed designs: Case T-11/08 Kwang Yang Motor Co Ltd v OHIM [2011]. Thus the extent of the differences which the designs should exhibit to produce a different impression on the informed user is proportional to the degree of freedom of the designer: small differences may not generate a different overall impression if the degree of freedom is high, but may be sufficient when the degree is restricted.

The Board of Appeal's conclusions on the absence of a restriction of the degree of freedom were upheld, as it appeared that different designs could have been conceived. It was also observed that general trends cannot be regarded as restrictions to the degree of freedom.

The applicant challenged the Board of Appeal's conclusions as to the lack of individual character, maintaining that the absence of a lateral protrusion of the collectors, in the disputed designs, distinguished them from the prior art. The court recognized that the designs contained no claims as to the extent of the lateral protrusion of the collectors, contrary to the findings of the Board of Appeal. The conclusion was supported by the broken lines drawn at the collectors' extremities, as well as by the fact that the disputed designs did not represent complete radiators but merely depicted thermosyphons, as Antrax stated in its application for registration. OHIM's classification according to the Locarno Convention is a merely administrative procedure, which does not substitute or render the applicant's description invalid (Article 36(6) of Regulation 6/2002).

The court then verified whether the Board's other findings were independently sufficient to demonstrate the lack of individual character of the disputed designs. It disregarded the applicant's arguments concerning the comparison between the depth and spacing of the pipes in the disputed designs and prior art, since they relied on the unproved assertion of the identity of the collectors' dimensions. The judgment clarified that the protection of the disputed designs was granted independently of the dimensions of the final product to which they were to be incorporated and that the applicant had failed to prove the existence of any restriction to the collectors' dimensions. The comparison, therefore, should focus on the internal proportions of the elements, which is independent from the collectors' dimensions.

Finally, the applicant's remarks concerning the saturation of the state of the art were examined. Antrax had already submitted the argument during the proceedings in front of the Invalidity Division and the Board of Appeal, claiming that the crowded field rendered small differences in the internal proportions of the designs more readily perceptible by an informed user. The General Court noted that neither the Invalidity Division nor the Board of Appeal had expressly considered the argument put forward by the applicant. Contrary to OHIM's assertions, it found that the relevance of the exception could not be disputed and that OHIM's considerations as to the lack of proof supporting the applicant's arguments amounted to an inadmissible ex post integration of the reasons of the Board of Appeal's decision (see eg Case T-228/02 Organisation des Modjahedines du peuple d'Iran v Council [2006] ECR II-04665).

The court underlined that its review cannot extend to the evaluation of arguments which have not been considered by the Board of Appeal in the procedure leading to the contested decision, as the court's power to reform can only be exercised when, upon examination of the Board of Appeal's motivations, it is possible to determine the correct decision which should have been taken, based on factual and legal elements already proved: Case C-263/09 P Edwin Co Ltd v OHIM [2011].

The case offered an occasion to distinguish the saturation of the state of the art from the presence of a general trend in the industry. The latter, according to the court, bears significance only in relation to the aesthetic perception of a design and the commercial success of the product which incorporates it, but does not affect the overall impression produced by the designs on the informed user, nor does it restrict the degree of freedom of the designer. Therefore, when assessing the individual character of a design, the aesthetics or commercial success of a product should not be considered relevant. The saturation of the state of the art, instead, may well yield relevant effects on the perception of the informed user.

In light of the Board of Appeal's failure to state a reason with regard to a relevant argument submitted by the applicant, the General Court annulled the part of the Board of Appeal's decisions which proclaimed the invalidity of the designs, rejecting the rest of the application. The court evidenced that the duty to state reasons represents a fundamental principle of European Union Law, designed to allow the interested party and the judge to respectively challenge and assess the validity of an act (Case C-199/99 Corus UK v Commission [2003] ECR I-11177).

Practical significance

The judgment provides a useful overview of all the elements involved in the evaluation of the individual character of a design, enriching the notions of ‘informed user’ and ‘degree of freedom’, carved through reference to previous case law, with ancillary details drawn from the case in hand.

In particular, the court noted that the informed user's degree of awareness changes in relation to the degree of freedom of the designer (reciprocity) and can be influenced by the ‘saturation of the state of the art’, which potentially enhances his sensitiveness towards smaller differences in shapes and proportions. However, the informed user is supposedly incapable of discerning between features dictated by the technical function of the product from those which are arbitrary.

The rejection of the idea that general trends may determine a restriction of the freedom of the designer falls in line with an established case law (Shenzhen Taiden Industrial Co v OHIM), according to which the examination of the individual character of a design shall be conducted irrespective of aesthetic or commercial considerations. The court explicitly noted that such considerations cannot affect the degree of freedom of the designer, but may rather stimulate him to come up with new and original solutions. A diverse interpretation, centred upon the effects of general trends upon the degree of awareness of the informed user, would contradict the approach implemented in Article 6 of Regulation 6/2002 and might hinder creativity and innovation, rather than promoting it.

On the comparison of the overall and internal proportions of the designs, the court clarified that the former may be misleading, when the dimensions depend upon a single element the size of which may vary, unless a technical or normative restriction is present. It is only through an evaluation of the internal proportions of all the elements of the design, that the overall impression of the informed user can be positively identified, as internal proportions remain the same, regardless of the dimension of one of its elements.

The General Court also provided useful advice for the interpretation of applications for registration, evidencing that broken lines indicate elements that fall outside of the scope of protection and that OHIM's classification serves only administrative purposes and does not replace or invalidate the description made by the designer in the application for registration.