Unregistered Community Designs - Beverly Hills Teddy Bear Company v PMS International Group Plc

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Jane Lambert

Intellectual Property Enterprise Court (HH Judge Hacon) Beverly Hills Teddy Bear Company v PMS International Group Plc [2019] EWHC 2419 (IPEC)

Art 267 of the Treaty on the Functioning of the European Union provides:

"The Court of Justice of the European Union shall have jurisdiction to give preliminary rulings concerning:
(a) the interpretation of the Treaties;
(b) the validity and interpretation of acts of the institutions, bodies, offices or agencies of the Union;
Where such a question is raised before any court or tribunal of a Member State, that court or tribunal may, if it considers that a decision on the question is necessary to enable it to give judgment, request the Court to give a ruling thereon.
Where any such question is raised in a case pending before a court or tribunal of a Member State against whose decisions there is no judicial remedy under national law, that court or tribunal shall bring the matter before the Court.
If such a question is raised in a case pending before a court or tribunal of a Member State with regard to a person in custody, the Court of Justice of the European Union shall act with the minimum of delay."

In what may well be one of the last references from the UK, His Honour Judge Hacon referred the following question to the Court:

"(1) For the protection of an unregistered Community design to come into being under art.11 of Council Regulation (EC) No. 6/2002 of 12 December 2001 ('the Regulation'), by the design being made available to the public within the meaning of art.11 (1), must an event of disclosure, within the meaning of art.11 (2), take place within the geographical confines of the Community, or is it sufficient that the event, wherever it took place, was such that, in the normal course of business, the event could reasonably have become known to the circles specialised in the sector concerned, operating within the Community (assuming the design was not disclosed in confidence within the terms of the final sentence of art.11 (2))?
(2) Is the date for assessing the novelty of a design for which unregistered Community design protection is claimed, within the meaning of art.5 (1)(a) of the Regulation, the date on which the unregistered Community design protection for the design came into being according to art.11 of the Regulation, or alternatively the date on which the relevant event of disclosure of the design, within the meaning of art.7 (1) of the Regulation, could reasonably have become known in the normal course of business to the circles specialised in the sector concerned, operating within the Community (assuming that the design was not disclosed in confidence within the terms of the final sentence of art.7 (1)), or alternatively some other, and if so, which date?"

The need for a reference came in the course of a summary judgment application to Judge Hacon by the defendant in Beverly Hills Teddy Bear Company v PMS International Group Plc [2019] EWHC 2419 (IPEC) (17 Sept 2019). The hearing appears to have taken place on 25 July 2019 but the decision was delivered on 17 Sept 2019.  The issue in dispute was whether a design (that is to say, "the appearance of the whole or a part of a product resulting from the features of, in particular, the lines, contours, colours, shape, texture and/or materials of the product itself and/or its ornamentation") can be said to be new for the purposes of art 4 (1) of Council Regulation No 6/2002of 12 December 2001on Community designs(OJ EC No L 3 of 5.1.2002, p. 1) if that design was disclosed at a trade show outside the EU before products made to the design were first marketed in the EU.

Judge Hacon set out the basic facts at paragraphs [3] and [4] of his decision to refer the above questions to the CJEU:

"[3] This application concerns only UCDs. It is not in dispute that five of the six toys, all but the unicorn, were first shown to the public in October 2017 at the Mega Show, a trade fair in Hong Kong. It is agreed that the nature of the Mega Show was such that the design of each of the toys would have become known in October 2017 in the normal course of business to the circles specialising in the sector concerned, operating within the Community, within the meaning of art.7 of Regulation (EC) No. 6/2002 ('the Design Regulation').
[4] The toys were subsequently exhibited for the first time in the EU at the Nuremberg Toy Fair in Germany in January 2018."

The defendant argued that the relevant date for assessing the novelty of an unregistered Community design is the date on which the design right comes into being under art.11 of the Regulation. In this case, it contended, all five designs in dispute first existed in January 2018 but lacked novelty because of the Hong Kong Mega Show the previous October and consequently none of those five designs was protected by the Regulation.  As the judge observed at paragraph [6], there has been no clear authority on the point from the CJEU. There have been judgments in Germany, including one from the Federal Supreme Court, provoking a divided view among textbook authors and commentators in the UK. Much of the rest of the decision analysed the German decisions and the textbooks which led the judge to conclude at [58] that the issue is sufficiently clear to be regarded as an acte clair.

The questions that have been referred to the CJEU are unlikely to be determined before 31 Oct 2019 which is the date the UK is scheduled to leave the EU. Whether the Court will have jurisdiction to decide the issue remains to be seen, particularly if the UK leaves withour a withdrawal agreement within the meaning of art 50 (2) of the TFEU.  Anyone wishing to discuss this case, unregistered Community design law or brexit should call me on 020 7404 6262 during office hours or send me a message through my contact form.