BMW loses replacement parts appeal
Car manufacturer BMW has been told it cannot stop a company from selling replacement parts in South Africa after its design registrations were found invalid.
The German-based company had filed a lawsuit alleging that South African company Grandmark International, which provides after-market car parts, was infringing on its registered designs and trademarks.
But, following a dispute lasting more than 10 years, the Supreme Court of Appeal in Bloemfontein, upheld a ruling from last year which said the designs were not valid, allowing Grandmark to continue selling its parts.
The South African Designs Act, under which the designs were registered, currently has two registries, Aesthetic Design (AD) and Functional Design (FD).
The act says that a FD cannot cover a spare part for a vehicle, machine or equipment whereas an AD can.
Each registration, for a bonnet, a grill, a headlight assembly and a front fender, were registered as ADs.
However, Grandmark claimed they were invalid due to being functional in nature.
The court did not accept BMW’s argument that, because a vehicle qualifies for registration as an AD, so do its component parts.
Instead, the court said the design must be judged on its own qualities, ruling that components “are not selected by customers for their appeal to the eye,” but “selected for the function they perform.”
“It probably was the right decision in the circumstances,” said Rowan Forster, director in the IP department at law firm Edward Nathan Sonnenbergs in Durban.
“In light of the evidence presented and the way in which the design applications were drafted. I am not sure whether it correctly reflects the intention of the legislation though, and perhaps this may be examined on further appeal,” Forster told WIPR.
“If BMW don’t take it further, it will mean that manufacturers will have to be more creative around protection of their components – either looking for different avenues of protection or by drafting design applications in a more particular or specific manner.
“I suspect that they [BMW] almost have no choice but to appeal. The after sales parts market is very lucrative for all Original Equipment Manufacturers and this decision affects all of them,” Forster added.
BMW also claimed that Grandmark had infringed the trademark BMW by using the letters BM on its forms.
However, the court ruled that the use of the letters BM was purely for descriptive purposes and not trademark use.
“It can hardly be said that the trademark is used as a badge of origin when the label states it to have a different origin. Moreover, the numbering surrounding and immediately following the mark clearly reflects its use to identify the component concerned,” it said.
The ruling was issued on September 18.
