(In)Divisibility of the grounds of invalidity & the need for reasoned statement
Does Art. 25(1)(b) of the Community Design Regulation (CDR) require the EUIPO to assess whether all requirements under Art. 4-9 CDR are met? If the answer is no, when is there a need for a reasoned statement?
The General Court decision in Case T‑100/19 – among other points of law – focussed on these two questions, answering the first question in the negative. Thereby, the General Court explicitly stated that the scope of the invalidity action would be determined by the arguments, facts and evidence adduced by the parties.
With regard to the second question, the General Court used the opportunity to confirm previous rulings, but agreed with the applicant that in the circumstances of the present case, the Board of Appeal erroneously failed to provide reasoning as to why Art. 4(2)(b) CDR applies.
Both parties are Spanish companies offering vehicle components. Frio S.L. owns a registered Community design (RCD) for “machine coupling”. L.Oliva Torras attacked the validity of the design on the grounds of Art. 25(1)(b) CDR, which states: “1. A Community design may be declared invalid only in the following cases:
(b) if it does not fulfil the requirements of Articles 4 to 9”.
In particular, L.Oliva Torras argued that the Frio S.L.’s machine coupling design would:
- lack novelty (Art. 5 CDR) and individual character (Art. 6 CDR); and
- be applied to or incorporated in a complex product and could not remain visible during normal use by the end user (Art. 4(2)(b) CDR), arguing that since the component would be installed between the engine and the cooling system of the vehicle and the hood of the vehicle would be closed, the component shown in the design would not be visible to the end user, namely the driver of vehicle itself.
At first instance, the invalidity division found the design to be valid.
Board of Appeal decision
This was subsequently confirmed by the Board of Appeal. In its decision the Board of Appeal provided reasoning why the design would be novel and have individual character.
However, the Board of Appeal failed to give any reasoning as to why the design would meet the requirements of Art. 4(2)(b) CDR; albeit having explicitly requested the parties to comment on this issue.
The General Court’s decision
L.Oliva Torrras filed an appeal with the General Court inter alia arguing that the ground for invalidity under Art. 25(1)(b) CDR would warrant an assessment of whether all requirements set out under Art. 4-9 CDR are met. Furthermore, L.Oliva Torrras claimed that the Board of Appeal decision did not provide for the necessary reasoning with regard to Art. 4(2)(b) CDR.
Is the ground of invalidity under Art. 25(1)(b) CDR divisible?
In short, the General Court held that while Art. 25(1)(b) CDR generally requires that all requirements under Art. 4-9 CDR are met, the scope of the invalidity action would be determined by the arguments, facts and evidence adduces by the parties in the invalidity proceedings. In light of that, the EUIPO is under no obligation to assess grounds of invalidity that have not been explicitly asserted and substantiated by the invalidity applicant. This confirms the EUIPO’s approach to this as reflected in the guidelines.
Was there a need for a reasoned statement?
However, where this has been done, there would also be a need for a reasoned statement if the action was to be dismissed. Given that the parties had been explicitly requested to comment on Art. 4(2)(b) CDR (and had done so), the General Court concurred that the Board of Appeal had an obligation to assess the invalidity of the design consisting of hidden components in complex products. Since the Board of Appeal failed to do so, the General Court annulled the contested decision for lack of reasoned statement.
What to take away from this?
It remains to be seen if the Court of Justice will confirm this view.
For the time being, in order to ensure that the EUIPO (and subsequent instances) assesses the validity of a design with regard to all potential validity requirements, the invalidity applicant should submit all potentially relevant arguments, facts and evidence and explicitly assert which validity requirements are not met.
Otherwise, a new application for invalidity will have to be filed in order to assert an additional ground(s) not contained in the initial application.
The invalidity applicant should make sure to put forth all potentially relevant arguments, facts and evidence when attacking a design and specifically refer to each requirement that they believe is not met.
Case details at a glance
Jurisdiction: European Union
Decision level: General Court
Parties: L. Oliva Torras SA v European Union Intellectual Property Office
Date: 10 June 2020