This case relates to a dispute between the claimant, Beverly Hills Teddy Bear Company (“BHTBC”) and the defendant, PMS International Group Plc (“PMS”). Unusually, the facts were not disputed between the parties although the case raised an important point on the application of EU design law in relation to intellectual property rights protecting designs of certain animal-like soft toys called ‘Squeezeamals’.
PMS applied for a summary judgement regarding the alleged invalidity of the unregistered Community design rights (UCDs) in relation to the assessment of novelty for five of BHTBC’s toy products.
- Both sides agreed that five of the six toys were shown to the public in October 2017 at the “Mega Show” trade fair in Hong Kong.
- These toys were later exhibited at the Nuremburg Toy Fair in January 2018 – this being the first time the toys were shown to the public within the EU.
- The parties also agreed that the Mega Show exhibition was sufficient for the design to have become known in the normal course of business to circles specialising within the sector concerned – thereby falling within Article 7(1) of the Council Regulation (EC) No 6/2002 of 12 December 2001 on Community designs (the “Design Regulation”).
The dispute concerned the interpretation of the Design Regulation for the purposes of determining whether the UCDs in the toys lacked novelty. PMS claimed that the five toy designs lacked novelty because they first previously disclosed, before January 2018, at the Mega Show in Hong Kong, not “within the EU”. They argued this event, in the course of business, was known to all relevant circles within the Community.
The relevant law to qualify for protection
To gain protection a design must be ‘new’ and have ‘individual character’ (Article 4 Design Regulation). However, a design will not be ‘new’ if an identical design has already been disclosed to the public (Article 5 Design Regulation). A design will have individual character if the overall impression it creates on the informed user differs from that produced by any other design available to the public at the time of the application for registration (Article 6 Design Regulation). For the purposes of applying Article 5 and 6 in relation to disclosure, a design shall be deemed to have been made available to the public if it has been published, exhibited, used in trade or otherwise disclosed (Article 7 Design Regulation).
Article 11(1) of the Design Regulation states that the period of protection of a UCD runs for three years from the date on which it was first made available to the public within the Community. Interestingly, Article 11(1) adds an additional a territorial limitation not present in Article 5. It therefore follows that no design can be protected as a UCD unless and until it has been made available to the public within the Community.
Following an earlier judgment of the German Federal Supreme Court, the Intellectual Property Enterprise Court (IPEC) shared the view that, in order for a design to be afforded UCD protection, the event giving rise to the first disclosure of the design – including the marketing of the product made according to the design – must first take place within the territory of the EU.
If before that date there has been an event outside the EU giving rise to the design being disclosed, in circumstances such that the event could reasonably have become known in the normal course of business to the relevant circles in the Community, the design for which protection is sought will lack novelty.
As mentioned, both parties agreed that the Mega Show exhibition was sufficient for the design to have become known to the relevant circles in the community. This judgement would therefore suggest that ‘Squeezamals’ lacks novelty and will not be afforded UCD protection. This is on the basis that the Mega Show trade fair amounted to a first disclosure to the public that was made outside of the EU.
Despite this, IPEC did not consider that EU law was settled on this point. In the circumstances, it decided to refer two questions to the Court of Justice:
- For a UCD right to be available, must the event of disclosure take place within the EU or is it sufficientthat the event could reasonably have become known to the circles specialised in the sector concerned? (In line with Article 7 of the Design Regulation)
- When assessing novelty for a design, should this be assessed in accordance with Article 11 referring to first disclosure, or those conditions set out in Article 7(1), or by reference to some other date?
Essentially, is UCD protection only available to the prospective rights holder if it is first disclosed within the EU.
Given the uncertainty of Brexit, the UK may no longer be a member state of the EU, which could impact the IP rights available to UK designers.
If the Court of Justice agree with the approach taken by IPEC, it will be imperative that designers are aware their designs must first be disclosed within the EU if they wish to benefit from UCD protection. Given the uncertain circumstances of Brexit, this is something UK designers may wish to consider in protecting/enhancing their design IP strategy. One option, for example, may be to release designs simultaneously in both the UK and the EU post Brexit. Watch this space!