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Acacia, Audi and others: a broad defence for spare part makers – with strings attached

日期: 14 May 2018

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By John Parkin

 

Joined Court of Justice Cases C397/16 and C435/16 Acacia v Audi & Porsche were referrals from Italian and German Courts concerning third-party aftermarket replica alloy wheel rims for cars, which were essentially identical to the designs registered by several major German carmakers.

 

Article 110 of EU Regulation 6/2002 provides that “a design which constitutes a component part of a complex product” cannot be enforced against uses “for the purpose of the repair of that complex product so as to restore its original appearance”.  However, Recital 13 (which runs parallel to Article 110) applies only to designs of “a component part of a complex product upon whose appearance the design is dependent”.  This “dependency” test (i.e. spare part designs where the appearance of the part depends on the appearance of the whole) is sometimes referred to as a “must-match” test, like its UK predecessor. 

 

Several EU national courts, including the UK High Court in the 2012 case BMW v Round & Metal, considered that the wording in the Recital had been omitted from the Article, and should be “read back in”.  That would limit the scope of the defence under Article 110, excluding parts such as alloy wheels where the appearance of the part (wheel) is unrelated to that of the rest of the car.

 

The Court of Justice, however, considered that the legislative history indicated an intention to drop the “must match” restriction before the Regulation was finalised.  They therefore declined to traverse the intention of the legislator by reading the limitation back in.  As a result, the “repair clause” defence of Article 110 applies to any kind of part of a product, not merely those parts where the aftermarket supplier has no choice but to copy. 

 

Their judgment is consistent with their longstanding preference for free competition over the rights of intellectual property owners, at least in related markets such as those for accessories and spare parts. 

So far, then, a victory for the spare part makers (though one which Pneusgardia, one of the parties, will find it difficult to enjoy as they are in insolvency). 

 

But it is not quite that simple

 

There are two strings attached.  The first concerns the circumstances under which the defence can be invoked.  The Court make it clear that persons relying on that derogation” must “contribute, so far as possible, to ensuring strict compliance, particularly by the end user, with the conditions laid down in Article 110(1)”.  Thus, it is not enough merely to make or sell spare parts – “a manufacturer or seller is … under a duty of diligence as regards compliance by downstream users with those conditions.”

 

These conditions include that “the replacement part must have an identical visual appearance to that of the part which was originally incorporated into the complex product when it was placed on the market.”  In other words, the part must not be intended for use as an upgrade, but only as a one-for-one repair.

 

The second concerns the use of any trade marks which may be attached to the part concerned.  One might suppose that making a replacement part with “an identical visual appearance to that of the part which was originally incorporated” would necessarily involve reproducing such a trade mark.

 

Trade Marks 

 

In the case of C-500/14 Ford v Wheeltrims the Court of Justice had already ruled that the conditions in Article 110(1) “must be interpreted as not allowing … a manufacturer of replacement parts and accessories for motor vehicles, such as wheel covers, to affix to its products a sign identical to a trade mark registered for such products … on the ground that the use thus made of that trade mark is the only way of repairing the vehicle concerned, restoring to that complex product its original appearance.”  Thus, copying the trade mark might well be trade mark infringement, whereas removing it might take the competitor outside the scope of the defence since the replacement part would no longer be “identical”

 

The Opinion of the Advocate-General in Joined Cases C‑397/16 and C‑435/16 Acacia v Audi & Porsche sought to argue that the presence or absence of a trade mark would not change the question whether the part was “identical”, but the Court of Justice declined to repeat his comment.  As a practical matter, then, branded parts may be much more difficult to replicate in the aftermarket.

 

TRIPS Compatible?

 

The judgment begins with a citation of Article 26(2) of TRIPS, which provides that “Members may provide limited exceptions to the protection of industrial designs, provided that such exceptions do not unreasonably conflict with the normal exploitation of protected industrial designs and do not unreasonably prejudice the legitimate interests of the owner of the protected design, taking account of the legitimate interests of third parties.”  Some writers had questioned whether a repair defence could ever be compatible with TRIPS.  The answer of the Court appears to be that it can, but only where the actions of the competing spare part suppliers are channelled narrowly into the repair channel.

 

Stronger protection through national design registrations

 

The Court of Justice decision affects only Community Designs.  It will still be possible for manufacturers – and not just automakers – to protect their spare parts via the national systems of Germany, France and many other EU countries.  Devising the right protection strategy calls for expertise and experience of the design systems of Europe.

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