Having a right doesn't make you right, says CJEU in design ruling

In what has been a busy day for intellectual property enthusiasts in the Court of Justice of the European Union, there has even been that rarety of rareties, a registered Community design case.  It's Case C‑488/10 Celaya Emparanza y Galdos Internacional SA v Proyectos Integrales de Balizamientos SL, all the way from sunny Spain, from the unforgettably-named Juzgado de lo Mercantil n° 1 de Alicante y n° 1 de Marca Comunitaria [Merpel has Spanish friends with very long names; she suspects that this is just the court's pet name and that its real name is about three times longer].

Eager readers will no doubt recall this Kat's post on the Advocate General's Opinion back in November 2011 here [there's usually a six-month lag between the Opinion and the ruling. When, as here, the gap is just three months, it either means in theory that the Court has fewer cases and is catching up on its backlog or, in the real world, that it's not regarded as a very serious or difficult case]. However, for the benefit of new readers, here's a little guidance.

Cegasa owned a Community registered design consisting of a beacon‑like marker used for traffic signalling purposes. This design, lodged with OHIM on 26 October 2005, was published in the Register of Community Designs on 13 December 2005. At the end of 2007, PROIN marketed its own H‑75 marker. Taking the view that that marker did not give an overall impression different from that its registered Community design, Cegasa served an extra-judicial cease‑and-desist demand on PROIN in January 2008. PROIN denied infringement but nonetheless gave an undertaking to make changes to its design. Cegasa repeated its cease-and-desist demand to PROIN in March 2008.

On 11 April 2008, PROIN applied to register its own Community design, consisting of a beacon‑like marker used for traffic signalling purposes, published in the Register of Community Designs on 7 May 2008. The referring court considered that PROIN's cylindrical marker reproduced Cegasa's one because an informed user would not receive a different overall impression of PROIN's marker from Cegasa's.

Cegasa did not apply for a declaration of invalidity of the PROIN design registration -- but it did bring infringement proceedings and maintained that the offering, promoting, advertising, stocking, marketing and distributing of PROIN's  H‑75 infringed the rights in its earlier registered design. PROIN in turn argued that Cegasa had no locus standi to bring infringement proceedings because the H-75 was made in accordance with its own design registration: until such time as the registration of that design was cancelled, its holder surely enjoyed a right of use under the Regulation, so that the exercise of that right could not be deemed to infringe.

At this juncture the Juzgado de lo Mercantil n°1 de Alicante y n°1 de Marca Comunitaria decided to stay the proceedings and referred the following questions for a preliminary ruling:

‘1. In proceedings for infringement of the exclusive right conferred by a registered Community design, does the right to prevent the use thereof by third parties provided for in Article 19(1) of [the] Regulation … extend to any third party who uses another design that does not produce on informed users a different overall impression or, on the contrary, is a third party who uses a later Community design registered in his name excluded until such time as that design is declared invalid?

2. Is the answer to the first question unconnected with the intention of the third party or does it depend on his conduct, a decisive point being whether the third party applied for and registered the later Community design after receiving an extra-judicial demand from the holder of the earlier Community design calling on him to cease marketing the product on the ground that it infringes rights deriving from that earlier design?’

Today the Court of Justice ruled as follows:

"Article 19(1) of Council Regulation ... on Community designs must be interpreted as meaning that, in a dispute relating to infringement of the exclusive right conferred by a registered Community design, the right to prevent use by third parties of the design extends to any third party who uses a design that does not produce on informed users a different overall impression, including the third party holder of a later registered Community design.

2. The answer to the first question is unconnected with the intention or conduct of the third party".

The Court made its position perfectly clear at [33] to [40] where it said:

"33 ...[I]t is clear that the wording of Article 19(1) of the Regulation does not make any distinction on the basis of whether the third party is the holder of a registered Community design or not.

34 Thus, that provision states that a registered Community design is to confer on its holder the exclusive right to use it and to prevent ‘any third party’ not having his consent from using it.

35 Similarly, Article 10(1) of the Regulation provides that the scope of the protection conferred by a Community design is to include ‘any design which does not produce on the informed user a different overall impression’.

36 It is apparent from those provisions that the Regulation does not preclude the holder of a registered Community design from bringing infringement proceedings to prevent the use of a later registered Community design which does not produce on the informed user a different overall impression.

37 It is true ... that the holder of a later registered Community design also enjoys, in principle, an exclusive right of use of his design.

38 However, that fact cannot call into question the interpretation of the term ‘any third party’ within the meaning of Article 19(1) of the Regulation as including the third party holder of a later registered Community design.

39 ... [t]he Regulation must be interpreted in the light of the priority principle, under which the earlier registered Community design takes precedence over later registered Community designs.

40 It follows in particular from Article 4(1) of the Regulation that a design is to be protected by a Community design to the extent that it is new and has individual character. However, where two registered Community designs are in conflict with each other, the design that was registered first is deemed to have met those conditions for obtaining protection before the design that was registered second. Thus, the holder of the later registered Community design may be afforded the protection conferred by the Regulation only if he can demonstrate that the earlier registered Community design fails to meet one of those conditions, by seeking a declaration of invalidity, where appropriate by way of counterclaim".

We get the message.

Cat stops traffic here and here