Design infringements in Europe: the Baby Buggy case
One advantage of European Community intellectual property rights such as the Community trademark or the Community design is that the courts of a member state in which an alleged infringer has its place of business are competent to decide cases with effect across the entire EU. Cease and desist orders affect the whole EU are regularly granted by German courts against German companies.
In Community design cases, the Federal Supreme Court (Bundesgerichtshof) has, in the past, decided that actions committed in one member state constitute a danger of imminent infringement in other member states as well. The establishment of such a danger is a prerequisite of a cease and desist claim according to German law.
Either an infringing action has already been committed and constitutes a likelihood of repetition, or an infringement is held to be imminent; in both cases, cease and desist claims can be enforced in Germany.
A case decided in September 2011 by the Federal Supreme Court adds a new aspect to the law of enforcement of cease and desist claims with European effect for Community design infringements and beyond. This is the so-called Baby Buggy case, which concerned the infringement of a Community design relating to a baby buggy.
That the defendant was a manufacturer of baby buggies was uncontested. He did contest, however, that he manufactured the baby cars himself and that the manufacture took place within the EU.
That would have meant, according to traditional German case law, that the cease and desist order could not cover the manufacture of the baby buggies in question within the EU, since that would have required either one proven act of manufacture within the EU, or a serious probability that the manufacture of the baby buggies in Europe was imminent.
In the past, German courts have always maintained that the manufacture of products in foreign countries did not, of itself, constitute the likelihood that future manufacture was imminent in Germany. Manufacture was seen as having a quality quite different from that of selling and distribution, since corporations would have to invest much more money in a given country in order to establish a manufacturing site.
In the Baby Buggy case, however, the Federal Supreme Court held that the—uncontested—manufacture of the baby buggies outside the EU constituted the danger that manufacture by the defendant within Europe was imminent. Therefore, the judgment contained a cease and desist order which included the manufacture of the baby buggies in question within the entire EU.
“THE FEDERAL SUPREME COURT HELD THAT THE—UNCONTESTED—MANUFACTURE OF THE BABY BUGGIES OUTSIDE THE EU CONSTITUTED THE DANGER THAT MANUFACTURE BY THE DEFENDANT WITHIN EUROPE WAS IMMINENT.”
The court did not provide a detailed and elaborate argument for this conclusion. The court said that it was uncontested that the defendant was a manufacturer of goods. It was further uncontested that a third party manufactured the goods in question on behalf of the defendant outside the EU. Since the place of manufacture was simply a question of costs, which could change, manufacture outside the EU (ie, the territory for which the court had jurisdiction under the Community Design Regulation) was held to constitute, at least, the danger that future manufacture in Europe was imminent.
With a stroke of the pen, the court seems to have erased a rule of long standing in German IP law that, because of the different quality of manufacturing acts, there must be more than a mere possibility of their occurring in order to extend the restraining order to them.
That decision has provoked quite a stir in the IP community in Germany, since the issue might have consequences beyond the immediate case decided by the court, even for patent and other IP infringements. Since the case concerned a true Community right, the effect on patent cases is, at least immediately, unclear.
The Baby Buggy case was decided by the Federal Supreme Court’s I. Senate, which is competent for design and trademark cases, and it is not clear whether the court’s X. Senate (the patent senate) would apply the same reasoning to patent cases.
If the X. Senate were to follow the I. Senate, the result would indeed be far-reaching: the fact that a defendant manufactured products alleged to be patent-infringing in foreign countries would, as a consequence, give rise to claims prohibiting the manufacture of those goods in Germany also, simply because of the assumption that manufacture can be relocated to Germany at any time.
That would indeed be a new development, but then it may be a logical adjustment of legal rules to the modern phenomenon of a global economy, where manufacturing sites are relocated for cost reasons more often than in the past.
Jens Künzel, LLM, is a partner at Krieger Mes & Graf v. der Groeben. He can be contacted at: jens.kuenzel@krieger-mes.de
