For the half-year to 31 December 2014, the IPKat's regular team is supplemented by contributions from guest bloggers Rebecca Gulbul, Lucas Michels and Marie-Andrée Weiss.

Regular round-ups of the previous week's blogposts are kindly compiled by Alberto Bellan.

Sunday, 16 December 2007

Spare part design protection: the European Parliament's view

Here is the European Parliament's report on the proposal for a directive of the European Parliament and of the Council amending Directive 98/71/EC on the legal protection of designs (COM(2004)0582 – C6-0119/2004 – 2004/0203(COD)) -- thanks to the IPKat's friend Birgit Clark. It says as follows:

"The proposed directive relates to design protection of spare parts intended to restore the appearance of complex products. It seeks to achieve the complete liberalisation of the secondary market in spare parts. This concerns the motor vehicle industry, but also the machinery, capital goods and consumer goods industries.

Right: the obvious solution to spare parts, says the IPKat -- genetically modified cars

The proposal relates solely to the secondary market (aftermarket) in spare parts and deals only with spare parts the form of which is crucial to restoring the original function or appearance of the product: in other words, the part or component of the complex product can only be replaced with a spare part identical to the original part (“must-match” spare parts).

Article 1 of the proposal for a directive, amending Article 14 of Directive 98/71/EC, now exempts such spare parts from design protection on the secondary market. A “repair clause” is introduced whereby there is no design protection ‘for a design which constitutes a component part of a complex product used within the meaning of Article 12(1) of this Directive, for the purpose of the repair of that complex product so as to restore its original appearance’.

II. Background

Under Directive 98/71/EC of 13 October 1998 on the legal protection of designs, the visible characteristics of a product can be protected from use by third parties. The protection of designs confers exclusive rights for the appearance of an individual product, a complex product or a component, provided the design is new and possesses individual character (see Articles 1 and 3 of Directive 98/71/EC).

At the time of the adoption of Directive 98/71/EC it was not possible to reach agreement on the harmonisation of design protection for “must-match” spare parts. The directive accordingly contains no harmonisation of design law as it affects the downstream market in spare parts and currently does not exclude spare parts from design protection. So the design protection which is conferred for the new part on the primary market can also be applied to the spare part on the secondary market (aftermarket).

Article 14 of Directive 98/71/EC provides for a transitional arrangement whereby the Member States are to maintain in force their existing legal provisions in this area ‘until such time as amendments to this Directive are adopted on a proposal from the Commission in accordance with the provisions of Article 18’ and may change those provisions only if the purpose is to liberalise the market for such parts (the “freeze-plus” solution).

It was in 1993 that the Commission first proposed EC legislation on the legal protection of designs. However, the Council was unable to agree on a common position until 1997. The European Parliament, at first reading, had identified the protection of designs of spare parts for the repair of complex products (such as motor vehicles) as a crucial political issue. However, the Council was not in a position to approve harmonised provisions on the design protection of spare parts for repair purposes. At second reading, on 22 October 1997, Parliament decided by an overwhelming majority to propose once again the “repair clause” adopted at first reading which the Council had ignored. The aim of this provision was to enable a design to be used for the purpose of repairing a complex product provided the user paid the holder of the right to the design a fair and reasonable remuneration. Parliament considered that this was the best way to approximate the national legal systems, which in some cases diverged widely in this area. Since the Council was again unable to accept these Parliament amendments at second reading, conciliation proceedings were opened. The result of the long and difficult negotiations was the “freeze plus” solution as it now appears in Article 14 of Directive 98/71/EC. At present, following the transposition of Directive 98/71/EC, there are varying situations in the Member States regarding spare parts intended to restore the appearance of complex products. Your rapporteur points out that these differing legal practices show up particularly when compared at international level. The aim is to avoid competitive disadvantages for Europe in a world context.

III. Your rapporteur’s position

Although the proposal for a directive in principle covers all spare parts which serve to repair a complex product “so as to restore its original appearance”, discussions centre on its most important area of application, namely spare parts for motor vehicles. However, it should not be forgotten that these are issues of principle relating to the scope of design protection.

There are two fundamentally contrasting views of design protection for “must-match” spare parts on the secondary market.

The first holds that design protection for spare parts is a logical corollary of the right to intellectual property. In this view, drawing a distinction between the primary and secondary markets for spare parts would contradict fundamental principles of intellectual property rights.

In the other view, design protection should not be extended to cover spare parts because this would lead to prohibited monopoly positions. Supporters of this view defend the repair clause in the proposal for a directive as the most appropriate solution to the problem.

Your rapporteur considers that the solution proposed by the Commission, which means that design protection for spare parts ceases immediately, fails to take sufficient account of this tension between the various interested parties. Your rapporteur therefore proposes a transitional solution, whereby those ‘Member States under whose existing legislation protection as a design exists for a design which constitutes a component part of a complex product used within the meaning of Article 12(1) of Directive 98/71/EEC for the purpose of the repair of that complex product so as to restore its original appearance’ may retain this design protection for another five years after the entry into force of the directive.

The proposal for a directive relates to design protection issues and consequently does not touch matters of the safety of vehicles and their components. Nevertheless, liberalisation may have indirect effects on product quality and thus also on safety. The study commissioned on this topic found that the type approval procedure should be extended to cover certain safety-related spare parts in order to guarantee the safety of the spare parts. Your rapporteur therefore welcomes the fact that the proposal to extend the type approval procedure to safety-related spare parts has been included in Article 31 of Directive 2007/46/EC of 5 September 2007 (OJ L 263, 9.10.2007, p.1)".

The IPKat feels that spare parts is a market that really doesn't need liberalising. The European car industry, in particular, has been very hard-pressed and it would be good to see some better incentives and protection for those who are making a great effort to comply with safety and environmental concerns as well as retaining the integrity of their brands.

2 comments:

Anonymous said...

The IPKat felt 16 December “that spare parts is a market that really doesn't need liberalising. The European car industry, in particular, has been very hard-pressed and it would be good to see some better incentives and protection for those who are making a great effort to comply with safety and environmental concerns as well as retaining the integrity of their brands”. By contrast, Drexl, Hilty and Kur conclude in IIC 2005 p. 448 et seq. that “the argument through legal protection of industrial designs constitutes an incentive for design innovation lacks all plausibility, as the original manufacturer, like any third party, must necessarily reproduce the same part in order to restore the original apperarance.” Concerning “safety” the authors found that “safety aspects do not play a role”. As an owner of an quit old car, I think the Commission, the Parliament and Drexl et. al are on the right roadway.

Advokat Mats Björkenfeldt
Stockholm

Jeremy said...

“The argument that legal protection of industrial designs constitutes an incentive for design innovation lacks all plausibility" -- fine, I agree with you and my learned colleagues Drexl, Hilty and Kur on that. But whoever seriously believes that it ever did? The value of design protection is as an incentive to invest. If you had a spare million euro and were forced to invest it in original vehicle designers or spare parts free-riders, where would you invest it? I'd go for the spare parts businesses every time. Wouldn't you? That's because the latter have a no-risk, high reward business. This doesn't speak well for the IP regime, I think.

Subscribe to the IPKat's posts by email here

Just pop your email address into the box and click 'Subscribe':