European Union: EU Court Of Justice Clarifies Scope Of Citation Limitation To Community Design Rights

Last Updated: 20 December 2017
Article by Thibaut D'hulst

Most Read Contributor in Belgium, December 2018

On 27 September 2017, the Court of Justice of the European Union (the "ECJ") handed down a judgment in cases C-24/16 and C-25/16 following a preliminary ruling from the Düsseldorf Higher Regional Court pertaining to the scope of the "citation" limitation contained in Article 20(1)(c) of Regulation No. 6/2002 on Community Designs (the "Regulation").

The dispute arose between Nintendo Co. Ltd ("Nintendo"), a company active in the production and sale of video games and video game consoles (including the Wii video games console and accessories), and BigBen Interactive SA and its subsidiary BigBen Interactive Gmbh ("BigBen"), companies manufacturing remote controls and other accessories compatible with Nintendo's Wii video games console which are sold directly to consumers. For advertising purposes, BigBen uses images of goods corresponding to the protected designs held by Nintendo.

Before the Düsseldorf Regional Court, Nintendo contended that (i) BigBen's sale of Nintendo's products infringed its rights under the registered Community designs; and that (ii) BigBen had no right to use the images of Nintendo's goods for Big Ben's own commercial activities. The Düsseldorf Regional Court agreed that there had been an infringement by BigBen of Nintendo's designs but dismissed the actions in so far as they concerned the use of the images. Both parties appealed to the Düsseldorf Higher Regional Court (the "Court") which, in turn, decided to stay the proceedings and referred the following question to the ECJ for a preliminary ruling:

  • Whether a third party may lawfully use the image of a product corresponding to a Community design to advertise the goods which it sells and which constitute accessories to the goods corresponding to the registered design.

In particular, the Court sought clarification of the concept of "citations" within the meaning of Article 20(1)(c) of the Regulation.

The ECJ noted that Article 20(1)(c) of the Regulation constitutes a limitation to the rights of a Community design holder which applies when the use by a third party of such a design (i) is carried out for the purposes of making citations; and (ii) constitutes an act of reproduction. As regards the second condition, the ECJ held that a two-dimensional representation of a product can constitute such an act. As regards the first condition, the ECJ observed the importance of an independent and uniform interpretation of EU law throughout the European Union and therefore took into account not only the wording of the provision but also its context and the objectives pursued by the rules of which it forms part. In this respect, the ECJ observed that the various languages of that provision exhibited differences (e.g., the French and Dutch versions used the expression "illustration" whereas other versions referred to "citation"). However, it stressed that the objective of the Regulation is to ensure effective protection of registered Community designs and encourage innovation and development of new products and investment in their production. Accordingly, the ECJ held that limitations to the scope of protection should be interpreted strictly while not undermining the effectiveness of Article 20(1)(c). This is because this provision limits the rights conferred by a Community design when acts of reproduction serve as a basis for explanations or commentary. The ECJ added that preventing an undertaking that creates new products that are intended to be compatible with existing products falling under a Community design, such as BigBen, from using images of those existing products may discourage innovation, an outcome which the Regulation specifically seeks to avoid.

The ECJ concluded that BigBen's sale of products intended to be used with Nintendo's goods and the reproduction of these products to explain the joint use constituted an act of reproduction for the purpose of making "citations" within the meaning of Article 20(1)(c) of the Regulation. This is authorised under three cumulative conditions: (i) compatibility of the acts of reproduction with fair trade practice; (ii) absence of undue prejudice to the normal exploitation of the design; and (iii) reference to the source of the image. The ECJ held that the fulfilment of these three conditions is for national courts to verify.

Despite this principled stance, the ECJ clarified some aspects of these conditions. As regards the first condition, it held that an act of reproduction is incompatible with fair trade practice if: (i) it gives the wrongful impression of a commercial connection between the products; (ii) it infringes the rights conferred by the Community design in accordance with Article 19 of the Regulation; or (iii) the third party takes unfair advantage of the design right owner's commercial reputation. The ECJ also provided useful insight into the third criterion as the Regulation does not specify how the source should be mentioned. The ECJ held that it is necessary that the type of reference chosen for that purpose enables a reasonably well-informed, observant and circumspect consumer to identify easily the commercial origin of the product corresponding to the Community design. Finally, the ECJ specified that the referring court will have to assess whether the reference is in compliance with trademark legislation.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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