30 September 2014Jurisdiction reportsMuhammed Vally

Functioning to exclude protection: BMW v Grandmark

The South African Designs Act 195 of 1993 provides for aesthetic and functional design registrations. The former are defined by features that appeal to and are judged solely by the eye; the latter are defined by features necessitated by their function.

In this case, BMW as aesthetic design rights holder, was denied relief in a quo proceedings. Under appeal, it sought a declarator establishing infringement. The main enquiry (aside from trademark issues) was whether the BMW-registered designs for a bonnet (hood), a grille, a headlight assembly and a front bumper (fender) qualified as competent aesthetic subject matter under the act, despite their inherent functionality. The applicant for revocation averred that the designs did not qualify for registration under Section 14 of the act.

Although there could be both aesthetic and functional features present in a single design, functionality as may be present in aesthetic design registrations are excluded from protection, and functional design registrations do not protect any design that is in the nature of a spare part for, inter alia, vehicles.

The court canvassed the test for aesthetic design registrability. Emphasis is on external appearance, not including every externally perceptible feature. A distinctive feature that catches the eye of a likely customer is what is required as a visual criterion. Customer selection depends on a design’s aesthetic features and customers may be attracted by the aesthetic nature of the design, having been influenced by the aesthetic appeal in a motor vehicle as a whole, when buying. Thus, the court was unpersuaded that, if the design was intrinsically aesthetic, its components, albeit functional to some degree, are also by their nature aesthetic.

"What should have been the establishment of features that could invite customer selection has arguably changed into a test of what would invite customer selection."

The court concluded that the individual components are to be judged independently of the whole of the vehicle, and that the disputed components are selected solely for their functions, ie, to replace identical components to restore the vehicle to its original form. The court did not agree with a further submission that modified components could be used to alter the appearance of a vehicle and found it hard to conceive relevant examples. Instead, the court held that the likely customer would instead opt to maintain the vehicle in its factory-intended form.

Relying on UK authority, the court recognised that there are indeed vehicle components that are intended as interchangeable between vehicles and which could well be capable of aesthetic design registration. However, its conclusion—customer restoration as to vehicle form—formed the core of its decision to disallow the appeal.

This decision raises some concerns. There are many examples of vehicle modifications for improvement or customisation, as shown by thriving local aftermarket accessory and replacement parts industries.

One criticism of the present judgment is that it seems to create an opportunity for copycats to obtain design registrations based on OEM components that are then used as a template. This is akin to ‘springboarding’ under unlawful competition.

In addition, it appears that the visual criterion test was misapplied. What should have been the establishment of features that could invite customer selection has arguably changed into a test of what would invite customer selection. This amounts to a subjective interpretation of the intentions of likely customers—at variance with the recited tests.

Component functionality should have been subject to deeper debate. Vehicle restoration could be one of the functions of the components in question, but true functionality did not appear to be canvassed in detail. For example, in the case of a side door, closure of the vehicle interior is arguably its true function—the aesthetics are immaterial.

No definitions were given of what may be a spare part (ie, one ordinarily exposed to wear through use, such as brake shoes), a replacement component (not ordinarily subject to wear, such as a door) and entirely optional aftermarket accessory components. Each of these categories no doubt performs some function. If aesthetic appeal (irrespective of aesthetic quality) is the greater ‘function’ of the latter two categories then excluding design registration for the second of the three categories of vehicle component is an unfortunate development in local jurisprudence.

A precedent in relation to designs has been set. Until another case comes before the SCA and differs with the reasoning and conclusion of the present full bench, it remains unhappy news for OEMs.

Muhammed Vally is director of patents and patent attorney at DM Kisch Inc. He can be contacted at: muhammedv@dmkisch.com

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