Unpacking the European Commission’s EU Design Reform Package

On 28 November 2022, the European Commission adopted proposals for a revision of Council Regulation (EC) No 6/2002 of 12 December 2001 on Community designs (“Community Design Regulation”) and Directive 98/71/EC of the European Parliament and of the Council of 13 October 1998 on the legal protection of designs (“Design Directive”). Together, these two legal instruments form the main pillars of legal protection of designs in the EU. By revising these laws, the Commission aims to modernize a legal framework which has remained in effect for more than 20 years and make the protection of industrial designs in the EU quicker, cheaper and more predictable.

1. The existing legal framework for design protection in the EU and in the US

Design rights are an often-underestimated form of intellectual property protection, despite their potential of being an integral part of a holistic intellectual property strategy in various industries, especially for companies with vast and quickly developing product lines. With relatively smooth and low-cost registration processes, design rights can provide quick and effective protection against product imitation.

In the EU, the Design Directive first harmonized the disparate existing national laws of EU Member States on design protection, to counter the distortion of trade and competition caused by differing legal protection for designs. Conversely, the Community Design Regulation later created a unified, stand-alone system for obtaining a “registered Community Design”, a unitary right given uniform protection with uniform effect throughout the entire EU territory, complementing the national design protection systems of EU Member States.  Currently, the European Union Intellectual Property Office (“EUIPO”) registers around 100,000 Registered Community Designs every year.

Design rights in the EU protect the appearance of a product, resulting from attributes such as its lines, contours, shape, colors, texture and/or materials of the product itself or its ornamentation, but not its functionality. Legal protection is conditioned upon the design being new and having individual character. Design rights protect against other designs that are identical or do not produce a different overall impression on an informed user, legal tests which have been extensively developed by national courts and the EUIPO (in the case of Registered Community Designs).

The maximum term of protection for design rights in the EU (both Registered Community Designs and national design rights harmonized by the Design Directive) is 25 years, with renewal fees required every five years.

In the US, design patents under 35 U.S.C. §§ 171 – 173 protect designs for articles of manufacture that are new, original and ornamental. Design patents are not to be confused with utility patents, which protect technical inventions, such as a new machine, manufacturing system or process. The legal protection of a design patent may pertain to the configuration or shape of an article, the surface ornamentation applied to an article, or to the combination of configuration and surface ornamentation.

A design patent is valid for 14 years (if filed before May 13, 2015) after being awarded and is not renewable. If the design patent was filed on or after May 13, 2015, the design patent is valid for 15 years from the date of grant.

In broad terms, design rights in the EU and design patents in the US offer very similar protection, with some minor differences. For example, the scope of protection of design patents is more restricted in comparison to EU design protection, as design patents do not protect the appearance of a product resulting from its colors.

2. An overview of the proposed reforms to the EU legal framework for design protection

The main strategic objective of the revision of the Community Design Regulation and the parallel proposal for recasting the Design Directive is to promote design excellence, innovation and competitiveness in the EU. Achieving this depends on ensuring that the overall design protection system is updated to meet the demands of the digital age, substantially more accessible and efficient for individual designers, SMEs and design intensive industries in terms of lower costs and complexity, increased speed, greater predictability and legal certainty.

 

Proposed reforms common to both proposals include:

• Amending the definitions of “design” and “product” in response to technological advancements such as NFTs and the metaverse and providing greater legal certainty and clarity as to the eligible subject matter of design protection. In particular, a “design” will also extend to the movement, transition or any other sort of animation of the design’s features. The definition of “product” will also be updated to include products not embodied in physical objects and products that materialize in a digital form, as well as spatial arrangement of items intended to form an interior environment and graphical user interfaces;
• Adding a specific provision whereby design protection is conferred only on those features of appearance, which are shown visibly in the application for registration;
• Adjusting the scope of rights conferred by a registered design to include 3D printing technologies, by subjecting to the right holder’s authorization the creation, downloading, copying and making available of any medium or software recording the design for the purpose of reproducing a product that infringes the design;
• Permitting right holders to prevent counterfeit products transiting through EU territory or being placed in another customs situation without being released for free circulation there;
• Enshrining the existing case law of the Court of Justice of the European Union by adding permissible uses such as “referential use” and “critique and parody”;
• Aligning the formerly transitional “repair clause” with the case law of the Court of Justice and including it as a permanent provision, by excluding protection for a design which constitutes a component part of a complex product for the purpose of the repair of that complex product so as to restore its original appearance. This clause can be used as a defence against infringement claims only if consumers are duly informed of the origin of the product to be used for repairing the complex product;
• Including the possibility of a design notice, so that rights holders can inform the public that a design was registered.

 

Proposed reforms specific to the Community Design Regulation include:

• Replacing the old term “Registered Community Design” with the new term “Registered EU Design”;
• Including several amendments to further streamline registered design proceedings before the EUIPO and ensure consistency with the EU trade mark regime;
• Reducing the level of application fees to make design registrations cheaper for individual designers and simplifying the schedule of registration fees to increase transparency.

 

Proposed reforms specific to the Design Directive include:

• Limiting design protection under national laws to registered design protection and revoking the earlier permission for Member States to include protection for unregistered designs;
• Clarifying that design protection only commences with design registration, to avoid inconsistencies;
• Including a presumption of ownership, in alignment with the existing Articles 14 (vestige of title) and 17 (presumption in favour of the registered design holder) of the Community Design Regulation;
• Exhaustively listing the grounds for non-registrability, to minimize costs and difficulties connected to procedures for the obtention of registered design rights;
• Including a presumption of validity, to bring the Design Directive in alignment with the Community Design Regulation;
• Granting the formerly transitional repair clause (unlimited) instant legal effect only for the future, while safeguarding protection of existing rights for a transitional 10-year period;
• Including a right of prior use as a good faith defence against infringement, to bring the Design Directive in alignment with the Community Design Regulation;
• Requiring national laws to provide for an administrative procedure for challenging the validity of a design registration to be handled by their intellectual property offices, instead of reserving invalidity proceedings to national courts.

3. Reception of the proposals

The European Economic and Social Committee (“EESC”) adopted its opinion on the European Commission’s proposals on March 22^nd, 2023. The EESC’s opinion was mixed, on the one hand welcoming the proposals’ revision of the central definition of “design”, limiting of the scope of protection to only those features visible in the design application and amendment of the repair clause. On the other hand, the EESC doubts that the fee schedule revision in the Community Design Regulation will actually lower costs for application fees and would like to see lower fees for individual designers and SMEs.

On 13 April 2023, the European association of crafts and SMEs (SMEUnited) and five sectorial business associations issued a joint statement with recommendations for and concerns about the European Commission’s proposals, calling on the European Parliament and Council of the EU to take these into account during their review. In the joint statement, the parties welcomed the proposal to fully implement the repair clause across the EU and exclude visible spare parts (such as vehicle body panels, headlights, and windscreens) for the repair and replacement of complex product components from design right protection, thereby avoiding monopolies in after-sales markets on visible spare parts. However, a transition period of 3 years was suggested for the implementation of the repair clause by EU Member States, instead of the 10 years currently provided in the Commission’s proposal to recast the Design Directive.

In May 2023, the European Parliament published its initial appraisal of the European Commission’s impact assessment accompanying the proposals, which outlines the problems to be tackled by the reforms and how the proposals address these challenges. The European Parliament’s initial reaction to the Commission’s impact assessment is generally positive, although it stated that a more detailed breakdown of stakeholder views on the proposals would have been beneficial.

4. Next steps

The proposals themselves are currently being reviewed by the Committee on Legal Affairs in the European Parliament (“JURI”), with discussions on the proposals to continue under the Swedish presidency in the Council of the European Union.

Once adopted, most amendments to the Community Design Regulation will become applicable three months after its entry into force, whilst the EU Member States will have two years to transpose the Directive into national law.