Karen Millen Court of Justice of the European Union Decision

by Dechert LLP
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On 19 June 2014, the Court of Justice of the European Union (“CJEU”) delivered a judgment in the ongoing seven-year legal battle between Karen Millen Fashions and Dunnes Stores in Ireland.

Background

This battle, involving unregistered Community design rights began in 2005, when Karen Millen Fashions (“KMF”) produced three garments: a black knit top, a striped shirt in blue and the same striped shirt in stone brown (the “Garments”). Representatives from Dunnes Stores purchased the Garments at a KMF outlet in Ireland. Dunnes then copied the Garments and began selling them in stores as part of their ‘Savida’ label in late 2006.

KMF claimed that they held unregistered Community design rights in the Garments and commenced proceedings in the Irish High Court on 2 January 2007.

The relevant legislation is Regulation No 6/2002 (the “Regulation”), which introduced a unified Community designs system (both registered and unregistered). The Regulation provides that a design is to be protected to the extent that it is new and has individual character. An unregistered design will be considered new if no identical design has been made available to the public before the date on which the design claiming protection is made available to the public. A design shall be considered to have individual character if the overall impression it produces on the informed user differs from the overall impression produced on such a user by any design which was made available to the public before the date on which the design claiming protection was made available.

Despite admitting that they copied the designs, Dunnes submitted that KMF was not entitled to unregistered design rights in the items on the grounds that:

(i) the items did not have individual character, and

(ii) the Regulation required KMF to prove, as a matter of fact, that the items had individual character.

The Irish High Court upheld KMF’s claim, finding that Dunnes had failed to establish that the Garments did not meet the individual character requirement. Dunnes appealed this decision to the Irish Supreme Court. The Irish Supreme Court stayed the proceedings to refer two questions to the CJEU.

Questions Referred 

The questions referred to the CJEU were:

  1. In order for a design to have individual character, is the overall impression it produces on the informed user to be different from that produced on such a user by one or more earlier designs, taken individually, or by a combination of features taken in isolation and drawn up from a number of earlier designs?
  2. Is a Community design court obliged to treat an unregistered Community design as valid where the right holder merely indicates what constitutes the individual character of the design or is the right holder obliged to prove that the design has individual character?

The First Question

Dunnes submitted that a design will not have individual character if certain features of a number of previous designs (for example a stitch, stripe or colour combination) taken together create an overall impression that is not different from that created by the design seeking protection. This interpretation was rejected by KMF, the UK Government and in the opinion of Advocate General Wathelet.

The CJEU confirmed that there is nothing in the wording of the Regulation to support the view that the overall impression must be produced by such a combination. The CJEU judgment stated that:

“Article 6 must be interpreted as meaning that the assessment as to whether a design has individual character must be conducted in relation to one or more specific, individualized, defined and identified designs from among all the designs which have been made available to the public previously.”

The CJEU concluded that in answer to the first question, “the Regulation must be interpreted in meaning, that in order for a design to be considered as having an individual character, the overall impression which that design produces on the informed user must be different from that produced on such a user not by a combination of features taken in isolation and drawn from a number of earlier designs, but by one or more earlier designs, taken individually.”

The Second Question

The second question considered the obligation of the right holder to prove that the design has individual character as opposed to merely indicating what constitutes the individual character of the design. Dunnes submitted that the holder of a design at issue must prove that the design is new and individual in character. KMF, the UK Government and Advocate General Wathelet disagreed with this view.

The CJEU noted that the interpretation submitted by Dunnes was inconsistent with the presumption of validity in Article 85 of the Regulation. Under Article 85(2) the court shall treat a design as valid if the right holder indicates what constitutes the individual character of the design. If a design holder was required to prove that the design was new and individual, this would render the obligation to indicate what constitutes the individual character of the design unnecessary.

The CJEU also noted that the interpretation submitted by Dunnes would also be inconsistent with the objective of simplicity and expeditiousness that underpins the Regulation.

The CJEU concluded that the Regulation must be interpreted as meaning that the right holder is not required to prove that a design has individual character, but need only indicate what constitutes the individual character of that design by stating what in its view are the elements of the design that give it its individual character.

Comment

This decision will be warmly welcomed not only in the fashion industry but by other like-minded creative industries. Unregistered Community designs arise automatically and provide useful protection for fashion businesses in particular, which create large numbers of designs with a relatively short market life and therefore are less inclined to incur the cost and formality of registering such designs.

The decision of the CJEU will make it significantly easier for rights owners to protect and enforce their designs and provides one less defence for copycats to hide behind.

It will now be up to the Supreme Court to apply this CJEU judgment to the facts of the KMF and Dunnes dispute.

For the full CJEU judgment, see here.

 

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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