Marques: Why designs matter for brand owners

Sebastian Fischoeder and Robert Stutz, co-chairs of the Marques Designs Team, discuss developing issues in design law, including the EU design consultation.

Designs are all around us: in a connected and globalised world, colours, shapes and patterns are key to the ways we communicate—including how brand owners communicate information to consumers.

Scientific studies show that the brain processes visual information (such as that on packaging, or the packaging shape itself, or a logo) more quickly than written information. Indeed, research indicates that as much as 80% of communication is non-verbal.

Studies by neuropsychologists such as Christian Scheier (who spoke at the 2015 Marques Annual Conference in Vienna) also suggest that consumers are more likely to make buying decisions based on the look of products than based on brand names. Yet, many courts and trademark offices continue to treat trademark applications for non-traditional marks with scepticism, making it hard to obtain such registrations and even harder to enforce them.

It is not surprising, therefore, that IP rights owners are increasingly turning to design law to help them protect their valuable brands. Marques has recognised this for some time, and the dedicated Designs Team was set up several years ago. Today, we have members from all over the world, including private practice lawyers as well as representatives of companies such as JT International, Unilever, ThyssenKrupp, Bulgari, Adidas, Nestlé and Volkswagen.

The Designs Team seeks feedback from rights holders and design creators on how the design law systems can address their concerns and better help them protect their valuable product and brand assets. Through regular participation in forums such as those hosted by the EU IP Office (EUIPO) and the World IP Organization (WIPO), we can raise these points and promote the development and harmonisation of design law systems worldwide. We are working on four main initiatives at the moment.

EU design reform

The EU registered Community design system is now more than 20 years old. The Design Directive dates from 1998 and the Community Design Regulation from 2002. Following the review of the EU trademark system, the European Commission has embarked on an evaluation of how the design system is working at EU and national levels. It has commissioned an economic (2015) and legal (2016) review, and ran a stakeholder consultation from December 2018 to April 2019.

Marques has provided comprehensive input into the design law reform discussion, both in its own right and in a joint paper with our sister IP associations ECTA and INTA. Following extensive discussion with members, Marques identified five main issues in its paper:

(1) Spare parts    
Marques believes that the discussion over the spare parts issue does not have to, and should not, be an obstacle to pushing forward with the design law reform agenda. On the merits of the issue, Marques contends that the legal status as to spare parts should not be changed with a view to raise further hurdles for design right owners to establish and enforce design rights for spare parts. The most appropriate solution will evolve under competition law rules.

(2)  No general visibility requirement            
Marques strongly objects to the suggestion in the legal review that there should be a general visibility requirement for design protection. To the contrary, Marques wishes to clarify the law in order to emphasise that a design generally does not need to be visible at any particular time or in any particular situation in order to attract protection, and that with regard to the exception to that rule, regarding component parts of complex products, there should be a clarification that this notion is aimed at dealing with spare parts markets, specifically for complex machinery.

(3)  Technicality 
Marques requests that article 8(1) of the Regulation and article 7(1) of the Directive be amended so that the multiplicity of forms test is the guideline for assessing whether a design feature is solely dictated by its technical function. It should be clarified that the threshold for “technicality” is not met in case of mere functionality of a design.

(4)  Disclosure rules              
Marques recommends that stricter requirements be introduced for prior published designs to be eligible for being held against later designs. Prior publications that are too ambiguous must be disregarded.

(5)  Classification                  
Marques urges abolition of the same class requirement for multiple design application by deleting article 37(1) of the Regulation, and by making abolition mandatory through amending the Directive. Marques supports the recommendation to allow a higher number than the current seven views or to remove the restriction on the number of design views completely.

This is not an exhaustive list of issues, and there are other points on which Marques has taken a position with the aim of clarifying the law, correcting disadvantageous developments at IP office or court levels and to simplify national and international design applications. These include alignment of deferred publication rules; availability of invalidity procedure at office level; mandatory abolition of ex-ante examinations of validity; fees, in particular abolition of increase of renewal fees with each renewal term; and providing means to fight 3D printing design infringements.

"Marques will continue to follow developments on this topic closely and make further submissions if and when appropriate."

To find out more about the Marques position on these and other issues, readers can consult the MARQUES position paper and the MARQUES, INTA and ECTA joint paper, which are both available on our website. We understand that numerous corporate and expert Marques members have also responded to the consultation in their own right.

The review is a significant process, which is likely to lead to some changes to the EU design regime, and it is important that IP owners ensure that nothing is done to the detriment of rights holders and that any improvements made are in their interest.

Marques will continue to follow developments on this topic closely and make further submissions if and when appropriate. We anticipate that the European Commission will publish the results of its consultation at some point within the next year or so.

Alignment of formal requirements

Another issue that is very important for design applicants is the alignment of the formal requirements for the representation of designs internationally. Many businesses operate on a multi-national or global basis and novelty of designs is assessed on an international level, so it is important that practices are harmonised as much as possible.

An important initiative in this regard is the proposed Design Law Treaty, which has been discussed at WIPO for several years. Members of our team have played a full part in those discussions and look forward to seeing the result. Progress has been frustrating at times, but we are hopeful that we will soon see a signed agreement approved by the WIPO General Assembly.

In addition, a degree of harmonisation has resulted as more jurisdictions have joined the Hague Agreement. In the past five years the Republic of Korea, Japan, the US, Russia and Canada have joined the system and this has inevitably also led to a degree of convergence in terms of formal requirements. Marques welcomes these accessions and believes that the more the Hague Agreement expands, the more such convergence we will see.

Europe has also been taking a lead on the issue of formal requirements, with the EUTDN Convergence Project 6 on the Graphic Representation of Designs. Members of our team were very involved in developing that and we believe it could be a prototype for international harmonisation.

Prior disclosure on the internet

A third issue that is a focus for our team is disclosure on the internet, and specifically the question: when is a disclosure considered relevant to define state of the art and thus destroy the novelty and/or individuality of a design? This question is being addressed by Convergence Programme 10, on criteria for assessing disclosure of designs on the internet, launched by the EUIPO in November 2017. While not formally part of this project, Marques will provide input and feedback to the Working Group.

EU-wide alignment of priority claims and procedure and formalities

The Designs Team is looking at the alignment of practices on priority claims in the EU. We would like to see greater consistency in EUIPO procedures and formalities regarding priority claims, in the interests of providing clarity and predictability for design applicants.

The evolution of design law

Design law offers many benefits not only to classical design creators but also to brand owners. It provides fast protection at a low price. Unlike in trademark law, there is no genuine use requirement and protection is not limited to the specification of goods and services. Moreover, it is possible to protect multiple variations of a design in one application.

Designs should therefore be an integral part of any holistic IP protection strategy. Yet it is still the case that many people, including experienced IP practitioners, overlook or under-appreciate design rights. We believe that work on the issues discussed above will lead to further harmonisation and make design law clearer and more predictable. This will ensure that design rights play an even more important role in IP protection strategies in the future.

Robert Stutz is one of the founders of Beutler Künzi Stutz, an IP boutique law firm established 20 years ago. He has focused on design since the beginning of his career and has written numerous articles on this subject, is co-author of a commentary on Swiss and international design law and president of the Bernese Design Foundation. He can be contacted at: robert.stutz@torneys.ch

During nearly 20 years of IP practice with Bird & Bird Germany, Sebastian Fischoeder has gained particular expertise in unconventional brand protection and enforcement. He co-authored the Marques position paper on the results and recommendations of the EU Commission’s “Legal Review on Industrial Design Protection in Europe”. He can be contacted at: sebastian.fischoeder@twobirds.com