Acacia makes replica car wheels that fit Audis, BMWs, or Porsches. However, Acacia has been sued in several EU Member States and the defences it has raised are now the subject of three different preliminary references; two are from the Italian courts, and one is from the German Supreme Court. The central legal questions are whether Acacia’s replica wheels infringe EU-protected ‘design’ rights, and which court is competent to hear such a dispute?
Car manufacturers can stop rival companies from selling parts that fit their cars by protecting in intellectual property law the many designs which form the basis of their cars. In this respect, Audi, BMW and Porsche have each registered the designs of their car-wheels.
However, Acacia has been selling via its website replica wheels which fit those various makes of car. Consequently, Acacia has been sued by BMW, Porsche and Audi in the Italian and German courts.
Acacia denies doing anything wrong under EU design law, and it relies on Article 110 of the EU’s ‘design’ Regulation 6/2002, which provides:
1. Until such time as amendments to this Regulation enter into force on a proposal from the Commission on this subject, protection as a Community design shall not exist for a design which constitutes a component part of a complex product used within the meaning of Article 19(1) for the purpose of the repair of that complex product so as to restore its original appearance.
2. The proposal from the Commission referred to in paragraph 1 shall be submitted together with, and take into consideration, any changes which the Commission shall propose on the same subject pursuant to Article 18 of Directive 98/71/EC.
Further, in the Italian courts, Acacia has also counter-claimed that BMW is abusing a dominant position on the market contrary to EU cartel law, and is acting contrary to unfair competition law.
Case C-397/16, Acacia Srl
The first preliminary reference is Case C-397/16, Acacia. It originates in the Milan Court of Appeal. According to the website of the UK’s Intellectual Property Office, Milan’s judges have asked the CJEU:
1 (a) Do the principles of the free movement of goods and of the freedom to provide services within the internal market, (b) the principle of the effectiveness of EU competition law and of the liberalisation of the internal market, (c) the principles of effet utile and of the uniform application within the European Union of EU law and (d) the provisions of secondary EU law, such as Directive 98/71, and in particular Article 14 thereof, Article 1 of Regulation No 461/2010 and UNECE Regulation No. 124, preclude an interpretation of Article 110 of Regulation No 6/2002, which contains the repair clause, that excludes replica wheels that are aesthetically identical to original equipment wheels and have been approved on the basis of UNECE Regulation No. 124 from the definition of a ‘component part of a complex product’ (that complex product being a motor vehicle) for the purposes of the repair of that complex product and the restoration of its original appearance?
2. In the event that the first question is answered in the negative, do the rules on exclusive industrial rights in respect of registered designs, regard being had to the balancing of the interests referred to in the first question, preclude the application of the repair clause to replica complementary products that may be selected freely by the customer, on the basis that the repair clause is to be interpreted restrictively and may be relied upon only with respect to spare parts that come in one particular form only, that is to say, component parts the form of which has been determined in practically immutable fashion with respect to the external appearance of the complex product, to the exclusion of component parts that may be regarded as interchangeable and that may be applied freely, in accordance with the customer wishes?
3. In the event that the second question is answered in the negative, what steps must a manufacturer of replica wheels take in order to ensure the free movement of products the intended use of which is the repair of a complex product and the restoration of its original appearance?
Case C-433/16, Bayerische Motoren Werke
The second preliminary reference is also from the Italian courts only this time it originates in the Italian Court of Cassation. The legal problem for the Italian judges in Case C-433/16, Bayerische Motoren Werke is the competence of the Italian courts to hear the dispute. More particularly, President Amaroso of the Italian Court of Cassation queries whether both parties can be assumed to have tacitly consented to the competence of the Italian courts under Article 24 of the EU’s ‘jurisdiction’ Regulation 44/2001. Further, he is troubled by the correct interpretation which should be given to Article 82(4) of the Regulation about judicial declarations of non-infringement. He is also worried about the correct interpretation which should be given to Article 28(3) when the Italian courts are faced with a defence relating to an alleged breach of EU cartel law and a further defence that turns on unfair competition law, the latter being an area of the law that is not harmonised by EU law.
According to the UK’s Intellectual Property Office, the Italian Court of Cassation has asked:
1. Under Article 24 of Regulation No 44/2001, can an action to contest the jurisdiction of the national court seised that is brought before that court as a preliminary matter but in the alternative to other preliminary procedural objections and nevertheless before issues of substance are raised be interpreted as acceptance of the jurisdiction of that court?
2. Must the absence of provision in Article 82[(5)] of Regulation No 6/2002 for alternative jurisdictions to that of the defendant as stipulated in Article 82(1) of that regulation for cases relating to negative declarations be interpreted as implying the attribution of exclusive jurisdiction for such cases?
3. Is it also necessary, in order to resolve the question posed in paragraph 65 above, to take account of the interpretation of the rules on exclusive jurisdiction in Regulation No 44/2001, and in particular in Article 22, which provides for such jurisdiction, inter alia in proceedings concerned with the registration or validity of patents, trade marks and designs but not in cases regarding negative declarations, and in Article 24, which provides for the possibility that the defendant may accept a different jurisdiction, except where jurisdiction is derived from other provisions of the regulation, thereby establishing the jurisdiction of the court seised by the applicant?
4. Is the approach adopted by the Court of Justice in the judgment of 25 October 2012 in Folien Fischer and Fofitec, C-133/11, EU:C:2012:664, with regard to the applicability of Article 5(3) of Regulation No 44/2001 of a general and absolute nature applicable to every action for a negative declaration seeking to establish the absence of liability in tort, delict, or quasi-delict, including those for a declaration of non-infringement of Community designs, and hence in the present case is it the court referred to in Article 81 of Regulation No 6/2002 or that referred to in Article 5(3) of Regulation No 44/2001 that has jurisdiction, or may the applicant opt for one or other of the possible jurisdictions?
5. If actions for abuse of a dominant position and unfair competition are brought in the context of a case concerning Community designs with which they are connected, in that their admissibility presupposes prior admissibility of the application for a negative declaration, can they be heard together with that case by the same court in accordance with a broad interpretation of Article 28(3) of Regulation No 44/2001?
6. Do the two actions referred to in paragraph 68 above constitute a case of tort, delict or quasi-delict, and, if so, may they affect the applicability of Regulation No 44/2001 (Article 5(3)) or of Regulation No [6/2002] to the present case as regards jurisdiction?
Case C-435/16, Acacia and D’Amato
The third preliminary reference is Case C-435/16, Acacia and D’Amato and concerns the competence of the German courts to hear the dispute between Acacia and the makers of Porsche because Porsche are claiming that the German courts are competent because Acacia’s website is hurting Porsche in Germany. The German Supreme Court has assumed competence to hear the dispute but Judge Büscher and the four other judges sitting on the bench have questions about the correct interpretation of the exception in Article 110 of the EU’s ‘design’ Regulation.
According to the UK’s Intellectual Property Office, the German Supreme Court has asked:
1. Is the application of the bar to protection as provided for in Article 110(1) of Regulation (EC) No 6/2002 limited to fixed shape parts, namely those parts whose shape is in principle immutably determined by the appearance of the product as a whole and cannot therefore be freely selected by the customer, such as rims for motor vehicles?
2. If Question 1 is answered in the negative: Is the application of the bar to protection as provided for in Article 110(1) of Regulation (EC) No 6/2002 limited only to the supply of products of an identical design, which thus correspond also in colour and size to the original products?
3. If Question 1 is answered in the negative: Does the bar to protection as provided for in Article 110(1) of Regulation (EC) No 6/2002 apply in favour of the supplier of a product that fundamentally infringes the design at issue only if this supplier objectively ensures that his product can be purchased exclusively for repair purposes and not for other purposes as well, such as the upgrading or customisation of the product as a whole?
4. If Question 3 is answered in the affirmative: Which measures must the supplier of a product that fundamentally infringes the design at issue take in order to objectively ensure that his product can be purchased exclusively for repair purposes and not for other purposes as well, such as the upgrading or customisation of the product as a whole? Is it enough:
(a) that the supplier includes a note in the sales brochure to the effect that any sale takes place exclusively for repair purposes so as to restore the original appearance of the product as a whole; or
(b) is it necessary that the supplier make delivery conditional on the customer (traders and consumers) declaring in writing that the product supplied is to be used for repair purposes only?
Readers of EU Law Radar interested in the exceptions to the EU’s ‘design’ Regulation are referred to another preliminary reference from the German courts concerning the ‘functionality’ exception; see further, Case C-395/16, DOCERAM – they DoCeram-ics but technical functionality dictates their design. The DOCERAM case was referred by the Oberlandesgericht Düsseldorf.
Readers who are interested in jurisdiction might also recall that earlier this year the Oberlandesgericht Düsseldorf also referred another case involving websites, design rights, and the ability of the German courts to hear a dispute; see further, Case C-24/16, Nintendo – jurisdiction by design.