FRIDAY, 25 JULY 2014
Spain: distributors have no locus standi to sue for design infringement
An action for design infringement was initiated by a German company Hansgrohe AG, and its Spanish subsidiary, Hansgrohe, S.A., against Grifería Tres, S.A. for infringement of an international registered design for a tap. This dispute came before the Commercial Court of Barcelona, which found that there had been infringement and awarded compensation to Hansgrohe as the owner of the registered design. However, the Court rejected the ius standi of Hansgrohe, S.A. to be co-plaintiff, since the Germany parent company had not granted it a licence.
This judgment was appealed by both parties to the Court of Appeal of Barcelona: Griferia challenged the infringement finding while Hansgrohe, S.A. challenged the lack of ius standi and, therefore, the lack of an entitlement to claim compensation from infringements carried out in Spain.
This Court upheld Griferia Tres's appeal and set aside the judgment, declaring that there had been no infringement and that, therefore, there was no need to pay damages. Why? Because the taps manufactured by Griferia Tres created a different overall impression to that of the plaintiffs' registered design at stake. However, Hansgrohe, S.A.'s appeal was dismissed.
Both plaintiffs then appealed the Supreme Court, their appeals being mainly based on the procedural argument of the ius standi of Hansgrohe, S.A.which argued that an implicit licence had been granted by the owner of the design, given its relationship as distributor in Spain -- and also that there was a similarity between the tap marketed by the defendant and the registered design. Interestingly, the plaintiffs stated that the degree of freedom of the designer in the field of the taps is only limited by its technical function and not by market trends, contrary to the position of the Court of Appeal.
The Supreme Court gave judgment on 25 June 2014, confirming the lack of ius standi of the Spanish subsidiary of Hansgrohe AG in the absence of a real licence. The Court ruled that the status of licensee of the subsidiary did not derive from its relationship with the parent company (even in this case, where the subsidiary was 100% owned by the parent company). Likewise, a subsidiary cannot be considered either an indirect owner or co-owner of the registered design.
The appellant had argued that Article 13 of the IP Rights Enforcement Directive (2004/48) allow injured parties to claim the damages suffered, but the Supreme Court stated that this article refers exclusively to the rightholder and does not include any other injured parties ("…to pay the rightholder damages appropriate to the actual prejudice suffered by him/her as a result of the infringement"), in line with Articles 53 and 55 of the Spanish Law on Designs, Law 20/2003. Although Article 61.2 of the Spanish Law allows the licensees to take part in the infringement proceedings in order to claim compensation, Hansgrohe, S.A. had failed to prove such condition and therefore its appeal was dismissed in this regard.
In connection with the degree of freedom of designers of products like taps, the Supreme Court agreed with the plaintiff that it is not limited by the market trends but only by their technical function, and quoted the judgments of the General Court of the EU of 22 June 2010 (Case T 153/08) and 13 November 2012 (Joined Cases T 83/11 and T 84/11) where it was declared that a general design trend cannot constitute a factor that limits the freedom of the designer since it is precisely that freedom on the part of the designer which allows him to discover new shapes and new trends or even to innovate in the context of an existing trend.
The Supreme Court recognised that, although the influence of market trends is not a peaceful issue, however, in a broad sense, those trends do not limit the freedom of designer but contribute to determine the individual character of designs and therefore to determine the scope of protection granted to their owner and to determine the necessary degree of differentiation from competitors in order to create a different overall impression.
Thus, if those trends were present when the application for the design was filed (if the design followed the trends when it was filed), its singular character decreases, so the comparison between the registered design and an allegedly infringing product needs to take into account the elements derived from those trends: if their similarities relate to them, they will have a lower importance in the overall impression of the informed user and a lower degree of differentiation will be enough to create a different overall impression. On the other hand, if the registered design was innovative at the filing date of its application (e.g. if it anticipated the trends), this singularity cannot be affected by allowing third parties to market products with a similar design that do not create a different overall impression, arguing that the degree of freedom of the designer is limited by the market trends.
Finally, the appeal filed by Hansgrohe AG was also dismissed by the Supreme Court in connection to the comparison between the design and the contested product, stating that there were significant differences between them, not being even necessary to assess the degree of freedom of the designer.
Source: article created for Class 99 by José Ángel García-Zapata (Associate, Bird & Bird, Madrid, Spain). Thanks so much, José Ángel!
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