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Thursday, 2 July 2009

The Timeless Spanish cuckoo clocks of Cul de Sac: who owns the designs?

The second of today's European Court of Justice star attractions is Case C‑32/08, Fundación Española para la Innovación de la Artesanía (FEIA) v Cul de Sac Espacio Creativo SL, Acierta Product & Position SA, a reference for a preliminary ruling from the Juzgado de lo Mercantil n° 1 de Alicante y n° 1 de Marca Comunitaria (Spain). This reference turned on the deep and subtle meaning of Article 14(3) of the Community Design Regulation, which obviously could not have been intended to mean that

"where a design is developed by an employee in the execution of his duties or following the instructions given by his employer, the right to the Community design shall vest in the employer, unless otherwise agreed or specified under national law".
Right: clock from Kit-cat

In short, FEIA designed a project known as ‘D’ARTES’, in which 50 skilled workshops in various sectors could produce, by means of a design project executed by a professional in the field, a family of objects to be placed on the market. The company AC&G SA (AC&G), as organiser, set the parameters of the D’ARTES project and was given responsibility for selecting the designers and concluding agreements with them. AC&G then entered into an oral agreement with Cul de Sac, which was not subject to the Spanish Labour Code, under which Cul de Sac was responsible for developing a design and providing technical assistance to a craftsman with a view to the creation by him of a new collection of products. As payment for its services, Cul de Sac received from AC&G the modest sum of EUR 1,800.

Cul de Sac designed a series of cuckoo clocks which were manufactured, in the context of the D’ARTES project, by the craftswoman Verónica Palomares, and released in April 2005 as part of the ‘Santamaría’ collection. AFter Cul de Sac and Acierta subsequently produced and placed on the market cuckoo clocks as part of the TIMELESS collection. FEIA considered that those cuckoo clocks were a copy of the unregistered Community designs which went to make up its ‘Santamaría’ collection, which it claimed to own both because of (i) its position as sponsor and main source of finance for the D’ARTES project and (ii) the assignment to it by AC&G of the exclusive rights to exploit the products produced in the first D’ARTES series. FEIA accordingly sued Cul de Sac and Acierta for (ii) infringement of its Community designs and (ii) unfair competition. Cul de Sac and Acierta disputed that AC&G and/or the FEIA ever owned those designs. Accordingly, in their view, FEIA had no standing to bring the action. The Juzgado considered that the FEIA could assert ownership only if AC&G, which purportedly assigned such ownership to it, itself owned the right to those designs. It accordingly stayed the proceedings and referred the following questions to the Court for a preliminary ruling:
"(1) Must Article 14(3) of Regulation No 6/2002 be interpreted as referring only to Community designs developed in the context of an employment relationship where the designer is bound by a contract governed by employment law whose provisions are such that the designer works under the direction and in the employ of another? or

(2) Must the terms “employee” and “employer” in Article 14(3) of Regulation No 6/2002 be interpreted broadly so as to include situations other than employment relationships, such as a relationship where, in accordance with a civil/commercial contract (and therefore one which does not provide that an individual habitually works under the direction and in the employ of another), an individual (designer) undertakes to execute a design for another individual for a settled price and, as a result, it is understood that the design belongs to the person who commissioned it, unless the contract stipulates otherwise?

(3) In the event that the answer to the second question is in the negative, on the ground that the production of designs within an employment relationship and the production of designs within a non-employment relationship constitute different factual situations:

(a) Is it necessary to apply the general rule in Article 14(1) of Regulation No 6/2002 and, consequently, must the designs be construed as belonging to the designer, unless the parties stipulate otherwise in the contract? or

(b) Must the Community design court rely on national law governing designs in accordance with Article 88(2) of Regulation No 6/2002?

(4) In the event that national law is to be relied on, is it possible to apply national law where it places on an equal footing (as Spanish law does) designs produced in the context of an employment relationship (the designs belong to the employer, unless it has been agreed otherwise) and designs produced as a result of a commission (the designs belong to the party who commissioned them, unless it has been agreed otherwise)?

(5) In the event that the answer to the fourth question is in the affirmative, would such a solution (the designs belong to the party who commissioned them, unless it has been agreed otherwise) conflict with the negative answer to the second question?".
This morning the Court ruled simply as follows:
"1. Article 14(3) of Council Regulation ... 6/2002 of 12 December 2001 ... does not apply to Community designs that have been produced as a result of a commission.

2. In circumstances such as those of the main proceedings, Article 14(1) of Regulation No 6/2002 must be interpreted as meaning that the right to the Community design vests in the designer, unless it has been assigned by way of contract to his successor in title".
The IPKat, with his impeccable common law background, can't see how the court could ever have reached the opposite conclusion and wonders why the referring court was persuaded to ask all those questions in the first place. Merpel says, I think the court did very well, considering that they didn't have the benefit of an English translation of the Advocate General's Opinion to guide them. Tufty says, within a few years there will probably be a provision of EU law that limits the design and manufacture of cuckoo clocks to certain parts of Germany and possibly Switzerland, protecting "cuckoo clock" as a PAMT (Protected Appellation for Mechanical Trivia).

More on cuckoo clocks here
Build your own cuckoo clock here

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