Friday, July 9, 2010

First RCD Decision Issued by the European General Court

In overturning a lower court decision, the ECG (European General Court) provides useful guidance on the interpretation of definitions and concepts in European Community Design Law. In particular, the ECG weighed in for the first time on whether a particular Registered Community Design (“RCD”) is in conflict with another previously registered design. Some basic information on Registered Community Design can be found here.

PepsiCo, Inc. owns the RCD shown below (left):

PepsiCo’s design was filed on September 9, 2003, and claims priority to a Spanish registration filed on July 23, 2003. The design was classified as a “Promotional Item for Games.” The owner of an earlier filed (July 17, 2003 with a Spanish priority claim of July 8, 2003), but later published design, Grupo Promer Mon Graphis SA (‘Grupo’) (above -right), requested that PepsiCo’s registration be cancelled. Grupo argued that PepsiCo’s registration was done in bad faith, as Grupo had disclosed their designs to PepsiCo in confidence and that the two designs were “in conflict.”

The ECG reviewed the first determination by the Office for Harmonization in the Internal Market (OHIM) that the PepsiCo’s registration was “in conflict” with Grupo’s earlier RCD, and its subsequent reversal by the OHIM Board of Appeal. The Board had rejected Grupo’s bad faith argument and reversed the OHIM determination that the designs were in conflict.

The ECG agreed with the Board on the determination of bad faith. The ECG found that bad faith was not a valid ground for determining invalidity based on the Regulation governing RCDs. (The Regulations can be found here). However, the ECG disagreed with the Board’s ultimate decision that the two designs were not in conflict. As the Board set forth, and the ECG agreed, a design is in conflict if it produces the same overall impression on an informed user, taking into account the freedom of the designer in producing the design. The approach seems quite similar to the “Ordinary Observer” test used in the U.S.

The ECG opined on the degree of freedom of the designer, which deemphasizes common features of a design where the degree of freedom of the designer is limited, almost akin to the US approach of ignoring functional features of a design. Although recognizing that in the narrow category of “pogs,” “rappers,” or “tazos” the degree of design freedom is severely limited, the ECG still determined that the difference between PepsiCo’s and Grupo’s designs were not sufficient to produce a different overall impression.

Rather than the current approach of filtering out functional elements, perhaps the U.S. approach could benefit from consideration of “degree of freedom” when applying the Ordinary Observer test. It seems the approach of deemphasizing common elements rather than outright exclusion of elements could alleviate some of the criticism of the recent Stanley decision (analyzed here).

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