HomeInsightsHigh Court refers questions to Court of Justice of European Union regarding prior disclosure of a design outside the EU and its effect on novelty and the date on which an unregistered Community design right comes into being

Facts

Beverly Hills Teddy Bear Company (BHTB) is a Californian company which sells animal-like toys called “Squeezamals”. BHTB issued proceedings against PMS International Group Plc (PMS) which included claims for unregistered community design (UCD) infringement in order to protect the designs of its “Squeezamals”. PMS applied for summary judgment in relation to the part of BHTB’s claim relating to (UCD) protection.

Five of the six “Squeezamals” in question were first shown to the public in October 2017 at a trade fair in Hong Kong. They were subsequently exhibited for the first time in the EU at the Nuremberg Toy Fair in Germany in January 2018. PMS agreed that the first disclosure in Hong Kong prevented any UCD arising in this case.

The law

Article 4 of the Community Design Regulation (6/2002/EC) provides that “A design shall be protected by a Community design to the extent that it is new and has individual character”.

Article 5(1)(a) provides that a design is “new” if no identical design “has been made available to the public” before the date on which the design “for which protection is claimed has first been made available to the public”.

Article 7 provides that a design is “deemed to have been made available to the public” if it has been disclosed before the date in Article 5(1)(a) except where disclosure “could not reasonably have become known in the normal course of business to the circles specialised in the sector concerned, operating within the Community”. It will not have been “made available to the public” if it was disclosed in confidence.

Article 11(1) provides that UCD’s are protected for a period of three years “from the date on which the design was first made available to the public within the Community”.

Article 11(2) provides that a design is “made available to the public within the Community” if disclosed in such a way that, in the normal course of business, “these events could reasonably have become known to the circles specialised in the sector concerned, operating within the Community”. It will not have been “made available to the public” if it was disclosed in confidence.

Arguments of the parties

It was not in dispute that the designs of the “Squeezamals”, at the time of the Hong Kong trade fair, (i.e. in October 2017) would have become known in the normal course of business to the circles specialising in the sector concerned operating within the Community within the meaning of Article 7.

PMS argued that the relevant date for assessing the novelty of a UCD is the date on which the UCD comes into being as provided by Article 11 of the Regulation, which it said in this case was January 2018 when the designs were exhibited in Germany. However, PMS said by that time all five designs lacked novelty because of their disclosure at the Hong Kong trade fair the previous October. Therefore none of the five designs was  protected by UCD.

BHTB argued that the date for determining both: (i) when the UCD comes into existence; and (ii) the novelty of a UCD, is the date on which an event of disclosure of the design first occurs, anywhere, in circumstances such that the event could reasonably have become known to the relevant circles in the Community. Therefore, the five designs were protected UCDs.

Decision

His Honour Judge Hacon noted that according to Article 5(1)(a), the relevant date for assessing novelty is the date on which the design “for which protection is claimed” has first been made available to the public. PMS argued that therefore the correct date for assessing novelty could only be identified by reference to a UCD that has come into being and Article 11 had to be considered.

Article 11(1) contains the words, “in the Community” (not present in Article 5(1)(a)), meaning that no UCD can arise unless and until it has been made available to the public within the Community, HHJ Hacon said.

HHJ Hacon said that there is therefore an ambiguity between the “event” of disclosure in Article 11(1) and the disclosure itself in the sense of the design coming to the attention of the relevant circles in the Community. The exhibition of a design, whether within or outside the EU, would qualify as a relevant “event”, but it may or may not give rise to disclosure in the latter sense. The question, therefore, was: does Article 11 require that the “event” takes place within the Community or does it require only that the event, wherever it happens, could reasonably have become known to the relevant circles within the Community?

HHJ Hacon’s view was that it was the event giving rise to the disclosure of a design that must take place within the territory of the Community. Article 11(1) refers to a design first made available to the public “within the Community”. Although Article 5(1)(a) does not contain these words, and although Article 11(1) is ambiguous, HHJ Hacon did not agree with BHTB that the words “within the Community” could be dismissed as mere surplusage.

As for novelty, HHJ Hacon’s view was that it should be assessed as at the date on which UCD protection comes into being under Article 11. The words “the design for which protection is claimed” in Article 5(1)(a) supported this construction, he said.

HHJ concluded that, in his view, in order for a design to be afforded UCD protection it was likely that the event giving rise to the first disclosure of the design, such as the marketing of a 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.

However, HHJ Hacon did not think that this view was sufficiently free from doubt, nor that the law was acte clair. Accordingly, he referred two questions to the CJEU:

  • for the protection of a UCD to come into being under Article 11 by the design being made available to the public within the meaning of Article 11(1), must an event of disclosure, within the meaning of Article 11(2), take place within the geographical confines of the Community, or is it sufficient that the event, wherever it took place, was such that, in the normal course of business, the event could reasonably have become known to the circles specialised in the sector concerned, operating within the Community (assuming the design was not disclosed in confidence)?
  • is the date for assessing the novelty of a design for which UCD protection is claimed, within the meaning of Article 5(1)(a), the date on which the unregistered Community design protection for the design came into being according to Article 11 or alternatively the date on which the relevant event of disclosure of the design, within the meaning of Article 7(1), could reasonably have become known in the normal course of business to the circles specialised in the sector concerned, operating within the Community (assuming that the design was not disclosed in confidence) or alternatively some other, and if so which, date?

(Beverly Hills Teddy Bear Company v PMS International Group plc [2019] EWHC 2419 (IPEC) (17 September 2019) — to read the judgment in full, click here).