IP Cases & Commentary – Details
2 April 2012
Infringement of an Earlier Registered Design - CJEU Ruling in Cegasa v Proin Clear Traffic for RCD Enforcement
The CJEU has issued a rare decision relating to registered designs, and it has answered the question whether obtaining your own registered design can prevent you from infringing an earlier registered design belonging to another party.
In the field of patents, it is well established that obtaining your own (later) patent will not help you in avoiding infringing an earlier patent belonging to another party, but registered design law is more of a backwater compared with patent law and for many years there has been something of a gut feeling that somehow the act of obtaining your own (later) registered design might act as some kind of shield against accusations of infringing an earlier registered design.
We now know that the CJEU considers that the later registered design does not provide a shield. Specifically, the CJEU in its capacity as the appellate court for EU law governing Registered Community Designs (RCDs) has decreed that a later RCD does not provide a shield against being held to infringe an earlier RCD belonging to another party.
Up until this decision, it has sometimes been tempting for a party, worried about infringing (or accused of infringing) an existing RCD, to consider trying to frustrate enforcement of that RCD by applying for and obtaining their own (later) RCD for their own product.
This strategy has been possible because, firstly, an RCD application is not substantively examined for novelty or so-called individual character by the EU Designs Registry (OHIM) and an RCD can be granted in a matter of just a couple of weeks. Thus, an invalid RCD can be obtained very quickly, and at low cost, and OHIM considers that it falls to interested parties to apply to have the granted RCD declared invalid by commencing invalidity proceedings that would seek to show that when the designs forming the prior art in the public domain are considered (and this would include earlier published RCDs) the design shown in the RCD in question either lacks novelty or lacks individual character. These invalidity proceedings typically last much longer than the short timescale for obtaining the RCD in the first place, and it can be months or years before an invalid RCD is struck off the Register at OHIM.
Secondly, the EU Regulation laying down the law governing RCDs is not as well worded as it could have been, and has opened the door to a line of argument that a later RCD acts as a shield against infringing an earlier RCD (at least until the later RCD is declared invalid). Specifically, Article 19(1) of Council Regulation (EC) No. 6/2002 states: “A registered Community design shall confer on its holder the exclusive right to use it and to prevent any third party not having his consent from using it”. The wording “shall confer on its holder the exclusive right… to prevent any third party” is the wording that one would typically expect for a monopoly intellectual property (IP) right where the granted IP right is a ‘right to stop others’ and is not a right to use the IP oneself.
It is the rest of the wording in the form of ‘shall confer on its holder the exclusive right to use it’ that has, until now, given rise to the line of argument that a later RCD is a shield against infringing an earlier RCD on the ground that enforcing the earlier RCD against the proprietor of the later RCD would deprive the proprietor of the later RCD of his ‘exclusive right to use’ the later RCD even if that exclusive right is in conflict with the earlier RCD proprietor’s ‘exclusive right to stop’ the later RCD proprietor’s activities. The later RCD proprietor would say that the later RCD would first of all need to be declared invalid and struck off the Register before the earlier RCD could be enforced against any product that falls within the scope of the later RCD and within the scope of the earlier RCD.
It is this line of argument that has now been struck down by the CJEU and it can no longer be used to frustrate owners of branded goods who have an RCD protecting one of their products and who wish to enforce that RCD against an importer of counterfeit goods who stalls and delays action against the counterfeit goods by obtaining their own (later) RCD and then running the above line of argument.
The case decided by the CJEU does not relate to branded goods or counterfeits, but has general applicability even though it relates to the functional and less glamorous world of traffic bollards. The case is C?488/10 Celaya Emparanza y Galdos Internacional SA v Proyectos Integrales de Balizamientos SL (‘Cegasa’ v ‘Proin’).
Cegasa obtained their RCD (the ‘earlier’ RCD) in 2005 as RCD No. 000421649-0001: their ‘road sign’ (or traffic bollard) is shown in Fig 1, below.
Proin started marketing their competing bollard in 2007, and Cegasa served a cease-and-desist demand upon Proin in January 2008.
In April 2008, Proin filed their own RCD application and it was granted a month later as RCD No. 000915426-0001 (the ‘later’ RCD) and its appearance is shown in Fig 2, right.
In the infringement proceedings before a Spanish court, Cegasa argued that the Proin bollard was an infringement of the Cegasa (the earlier) RCD because the Proin bollard does not produce a different overall impression on the informed user compared with the design of the Cegasa RCD. Proin replied with the ‘shield’ argument that the Proin (the later) RCD gives Proin the exclusive right to use the Proin design and thus the Proin bollard is not an infringement of the earlier (Cegasa) RCD at least until the Proin RCD is cancelled by means of invalidity proceedings. Interestingly, Cegasa did not attempt to invalidate the later (Proin) RCD. Instead, the merits of the ‘shield’ defence were referred by the Spanish court up to the CJEU for a preliminary ruling.
The Polish government intervened in favour of the shield defence, and the European Commission intervened to argue that the shield defence does not apply. Perhaps the European Commission was keen to intervene in order to try to make amends for the original poor drafting of the wording of Article 19 in the Regulation.
The CJEU essentially decided that the earlier RCD trumps the later RCD on “the priority principle, under which the earlier registered Community design takes precedence over later registered Community designs”. In other words, the shield defence is not valid, and the right of the proprietor of the earlier RCD to “the exclusive right … to prevent any third party” applies even when that third party is the proprietor of a later RCD and irrespective of the conduct of that third party, such as the fact that the third party applied for their RCD after becoming aware of the earlier RCD.
This is good news for RCD owners who now know that attempting to enforce their RCD against a competitor will not be frustrated and delayed by any later RCD obtained by the competitor. Specifically, it will no longer be necessary to remove the later RCD from the Register in order to have a clear run at enforcing the earlier RCD.
Overall, the ruling from the CJEU may make the RCD system more attractive as it has always offered a cheap and quick route to obtaining an IP right in the EU and it will no longer be blighted by the worry that a competitor will try to escape liability for infringement by indulging in the delaying tactic of obtaining their own (later) RCD for essentially the same design or a variant that does not produce a different overall visual impression.