Case C-395/16, DOCERAM – they DoCeram-ics but technical functionality dictates their design

One way for a company to stop a rival from selling a similar product is to protect in intellectual property law, the design(s) behind the product. EU law has a special regime for so-called registered Community designs. However, the regime will not protect designs which are ‘solely dictated’ by function. The problem in this case is determining what that phrase in the EU’s designs Regulation (EC) No 6/2002 actually means, in circumstances where the product is merely being used to hold two objects in place during a welding process.

Ceramic components can be made to be extremely hard-wearing when they are made using oxides and nitrides. This makes the use of advanced ceramic components ideal in products like hip-replacements or machine parts.

The German company DOCERAM makes advanced ceramic components. Its products are used in the machines that are found in car factories and textile factories.

However, the company also makes advanced ceramic component parts for use in welding machines and or welding tools and rigs.

Now some welding machines are designed for spot-welding together two  fiddly objects. These machines can complete a weld with extraordinary precision and extremely quickly. The key to their success however depends in part on the ability of the machine to get the to-be-welded-together objects in precisely the correct position so that the automated welding-electrode can then do its work with the requisite precision.

How to get the objects in the right position relies on using a system of small rods or pins upon which an object or objects can be placed before and when contact is made with the welding-electrode. In effect, the pins ensure that everything is properly aligned and held in place for an optimal weld.

However, the environment in which objects are welded together is rather special. It is characterised by extreme temperatures, the mixing of various gasses, the use of coolants, and the direction of molten metals and sparks.

Consequently, DOCERAM has designed and found a market for its ceramic pins, particularly because they are more durable than steel pins.

DOCERAM’s English-language webpage says (and I kid you not): ‘We are always ahead of our competitors in the field of technical ceramics. Imitation is the greatest form of flattery’,

DOCERAM though does not want imitation or flattery. It immediately sought to stop rival companies from producing similar pins. To that end, it registered various iterations of its pins as Community designs.

When it later discovered that there was another company selling advanced ceramic components used in for example welding machines, lawyers for DOCERAM hot-footed their way to the German courts claiming that DOCERAM’s Community design rights were being infringed.

The defendant company denied any legal liability at all. Indeed, it counterclaimed that it could not infringe DOCERAM’s designs because the registration of those designs was invalid. After all, DOCERAM’s designs were for pins whose features included conical heads, flat heads, or pins with screw-threads – these were features dictated solely by function, and  were as such unregistrable for the purposes of EU design law.

The defendant’s arguments persuaded the judge at first instance who then ordered that DOCERAM’s Community design rights be declared invalid.

However, the judgment was appealed to the Oberlandesgericht Düsseldorf.

At the Oberlandesgericht Düsseldorf
The judges looked at the relevant EU legislation, the EU’s designs Regulation (EC) No 6/2002.

The salient provision is Article 8, which provides:

Designs dictated by their technical function and designs of interconnections

1. A Community design shall not subsist in features of appearance of a product which are solely dictated by its technical function.

2. A Community design shall not subsist in features of appearance of a product which must necessarily be reproduced in their exact form and dimensions in order to permit the product in which the design is incorporated or to which it is applied to be mechanically connected to or placed in, around or against another product so that either product may perform its function.

3. Notwithstanding paragraph 2, a Community design shall under the conditions set out in Articles 5 and 6 subsist in a design serving the purpose of allowing the multiple assembly or connection of mutually interchangeable products within a modular system.

What the judges could not deduce from the wording of Article 8(1) of the Regulation was what it meant, particularly what was to be understood by the relationship between the features, and these being ‘solely dictated’ by technical function.

The German judges also realised that this was something of an old chestnut as there was no consensus of opinion among the German courts or with the courts in England and Wales, or indeed among the views that had been expressed in practitioner commentary.

One interpretation of the ‘solely dictated’ exclusion was generated by asking the question, ‘Did the designer have any choice about the final shape of the designed article?’. If there was a choice, then the design was not dictated by function. Accordingly, it might qualify for protection. One way of establishing this is for the designer to point to the existence of alternative designs.

There was case law that seemed to support such an approach. For example, there was the 2015 PC-Tablet judgment from the Oberlandesgericht Düsseldorf, and a 2006 ‘suitcase design’ judgment from the Court of Appeal of England and Wales in Landor & Hawa International Ltd, and the 2007 decision from OHIM in Häckselschneider. Further legal support was to be gleaned from the first two sentences of Recital 10 of the Regulation which state: ‘Technological innovation should not be hampered by granting design protection to features dictated solely by a technical function. It is understood that this does not entail that a design must have an aesthetic quality.’

That said, the German judges at the Oberlandesgericht Düsseldorf were also aware of the disadvantages to that approach. As Musker had explained, it could be quite easy to make a minor change to a design and make a new design. That would result in a design choice. A monopoly would be awarded. Contrarily, the entire ‘solely dictated’ exclusion would become just a paper tiger.

A further disadvantage with the choices approach was that there was a real risk that a monopoly would be granted to just one person – but the designs making up the choice might have come from different people and those people would then be unable to develop their products because of the monopoly already granted. This and similar points had been made by writers such as Suthersanen, ‘Rus[s]ell-Clarke, Howe on Industrial Design’, Eichmann, and Mr Justice Arnold in Dyson Ltd v Vax Ltd [2010] EWHC 1923 (Pat) 2010] EWHC 1923 (Pat) who at paragraphs 30 and 31 had also then proceeded to explain the various approaches adopted by the courts in France, Germany and England and Wales.

A different interpretation to determining the appropriate scope of the ‘solely dictated’ exclusion was to take a different starting point. Namely, in a situation where a shape is dictated by function, a designer will exercise no design freedom and will exert no relevant design effort, and therefore should not enjoy the benefit of a design right. Under this approach, if the design features are geared to functionality, then there will be no protection; contrarily, a design will be protectable if it has features on it that are not caused by the function which the designer wanted to achieve. A court could establish this not by the designer subjectively saying what he had wanted to achieve, but rather by the judge using an objective assessment of the design and thinking through if the features of the design were determined decisively by the functions of the design. One legal authority supporting that approach was OHIM’s 2009 ‘Häcksler’ decision, and the judgment of the court of first instance which had heard the present DOCERAM dispute.

The Oberlandesgericht could not decide on the correct approach. It did however observe that of late there had been a marked increase in the numbers of design cases coming before the German courts, particularly where designed-components were being used in heavy industrial plant machinery or in electrical equipment.

The judges recalled an anecdote of a utility design case involving cable conductor chains which had been built into heavy plant material – the judges had heard from the experts in the field that the exterior features and appearance of such creations were completely unimportant to members of the relevant professional public.

The judges thought the same could be said of the exterior features of creations that were built in to other equipment, features and appearance which were therefore out of sight from the buying-public. Of course, they knew that this was an old point and they recalled its mention by the courts of England and Wales in the 1971 judgment of Amp Incorporated.

Therefore, the German judges thought that in light of the fact that their first question related to the phrase ‘solely dictated’ in Article 8(1), depending on the answer given by the CJEU it might also be appropriate to ask why these types of creations should be treated differently – after all, according to Recital 12 no protection should be extended to parts incorporated into other equipment and which were in effect invisible.

The Oberlandesgericht Düsseldorf though contented itself by asking two questions of the CJEU.

Questions Referred
According to the website of the UK’s Intellectual Property Office, the Oberlandesgericht Düsseldorf has asked:

1. Does a technical function that precludes protection within the meaning of Article 8(1) of Council Regulation (EC) No 6/2002 of 12 December 2001 on Community designs (OJ 2002 L 3, p. 1) also exist if the design effect is of no significance for the product design, but the (technical) functionality is the sole factor that dictates the design?

2. If the Court answers Question 1 in the affirmative:
From which point of view is it to be assessed whether the individual design features of a product have been chosen solely on the basis of considerations of functionality? Is an ‘objective observer’ required and, if so, how is such an observer to be defined?

This year the Oberlandesgericht Düsseldorf has already sent off an IP law case to the CJEU about design law and the jurisdiction of the German courts; see further, Case C-24/16, Nintendo – jurisdiction by design.

Most recently, the Oberlandesgericht Düsseldorf has referred a case about the ability of the German court to hear an invalid registration dispute that involved a Benelux trade mark that had been granted by the registry in The Hague; see further, Case C-341/16, Hanssen Beleggingen – exclusive court jurisdiction in trade mark validity proceedings.

Curiously, the Dutch trade mark courts are having problems determining when three dimensional shapes can be registered as trade marks; see further, Case C-163/16, Louboutin – shoe soles, signs solely comprising a shape, and judicial cobblers.

Update – 3 September 2016

The information contained in the update of 3 September has now been moved and elaborated upon; see further, Case C-397/16, Acacia – the replica wheel deal.