23 January, 2018

Problem Fixed - CJEU Decides on IP and the Right to Repair Goods

Tinkering with old gadgets or cars is a beloved pastime for many, and often prolongs the life of the goods you own even beyond their warranty periods. Many manufacturers are making it increasingly difficult to repair items, particularly high-end electronics, and with discussions heating up relating to Apple's slow-down of their devices due to hardware aging, it is conceivable even more important for people to fix their old items. We've discussed IP issues relating to repairing or tinkering with tractors, but there has been very little judicial consideration around it. In that vein, what are the limits of IP and peoples' right to repair their goods? The CJEU took this question on late last year.

The case of Acacia Srl v Pneusgarda Srl and Audi AG concerned the sale of alloy rims for cars, for which Audi owns several registered community designs (e.g. RCD 132899 and 207667). Acacia manufactured rims under the brand WSP Italy, sold on their website, which are identical to the rims registered by Audi. The rims made by Acacia were clearly stamped as not made by the OEM, and were sold exclusively as replacement parts for the purpose of making repairs. Audi took Acacia to court over design infringement, with the matter ending up with the CJEU. Porsche had a similar matter joined with the Audi case against Acacia.

The Court joined the questions from both matters, which, essentially inquired about EU law in relation to repairs and design infringement.

The first combined question dealt by the Court asked whether "…Article 110(1) of Regulation No 6/2002 must be interpreted as meaning that the ‘repair’ clause in it makes the exclusion of protection as a Community design for a design which constitutes a component part of a complex product which is used for the purpose of the repair of that complex product so as to restore its original appearance subject to the condition that the protected design is dependent upon the appearance of the complex product".

The restoration of a vehicle's appearance is important, especially in a crash situation, and without the exception this wouldn't be possible. The Article 110 exception allows for this, and the CJEU had to therefore consider the provision's remit.

The CJEU rejected the condition that the exception only operates where the design is dependent upon the appearance of the complex product due to the absence of this phraseology in the legislation. The provision also protects against captive markets, where only the design holder can produce certain spare parts, allowing for consumers to purchase less expensive alternatives and not be tied to one particular provider. The Court therefore set out that "…Article 110(1)… must be interpreted as meaning that the ‘repair’ clause in it does not make the exclusion of protection as a Community design for a design which constitutes a component part of a complex product which is used for the purpose of the repair of that complex product so as to restore its original appearance subject to the condition that the protected design is dependent upon the appearance of the complex product".

The Court then moved onto the second combined question, which asked "…to which conditions the ‘repair’ clause in Article 110(1)… subjects the exclusion of protection as a Community design for a design which constitutes a component part of a complex product which is used for the purpose of the repair of a complex product so as to restore its original appearance".

The CJEU quickly set out that the provision is subject to three conditions: (i) the existence of a Community design; (ii) the presence of a ‘component part of a complex product’; and (iii) to the need for ‘[use] within the meaning of Article 19(1) for the purpose of the repair of that complex product so as to restore its original appearance’.

It's not just sellers who struggle with auto repairs
In specifying these conditions, the Court first observed that the second condition (as rights exist in the wheel rims) covers "…multiple components, intended to be assembled into a complex industrial or handicraft item, which can be replaced permitting disassembly and re-assembly of such an item, without which the complex product could not be subject to normal use", and that a wheel rim would indeed fall under this definition.

With regards to the third condition, the CJEU saw that 'use' of that product for the purpose of repairing that product includes making, offering, putting on the market, importing, exporting or using of a product in which the design is incorporated or to which it is applied, or stocking such a product for those purposes. This use, however, has to be with the aim to 'permitting the repair of the product', which encompasses the situation where, if that part were faulty or missing, this would prevent the product's normal use.

In short, the 'use' of the product, set out above, needs to be necessary for the repairing of that product if it has become defective through damage or lack of original parts. Purely aesthetic repairs wouldn't be covered by the provision, as it's only for convenience. Even still, the repairing would have to be done ‘so as to restore its original appearance’.

What this amounts to is that "…the component part must be used so as to restore the complex product to the appearance it had when it was placed on the market". The CJEU also added that the clause only applies to component parts of a complex product that are visually identical to the original parts.

In short, the CJEU saw that "…the ‘repair’ clause in it makes the exclusion of protection as a [RCD] for a design which constitutes a component part of a complex product which is used for the purpose of the repair of that complex product so as to restore its original appearance subject to the condition that the replacement part must have an identical visual appearance to that of the part which was originally incorporated into the complex product when it was placed on the market".

The Court then moved onto the final combined question, which asked "…whether Article 110(1)... must be interpreted as meaning that, in order to rely on the ‘repair’ clause in that provision, the manufacturer or seller of a component part of a complex product must ensure and, in that case, how it must ensure, that the component part can be purchased exclusively for repair purposes".

As detailed above, the repair clause is subject to a number of conditions, and in particular ones that emphasises a genuine need for repairs. This imposes compliance on part of the downstream user, not just the seller. This means that the seller needs to inform the buyer that "…the component part concerned incorporates a design of which they are not the holder and, on the other, that the part is intended exclusively to be used for the purpose of the repair of the complex product so as to restore its original appearance". Similarly, this needs to be ensured and enforced through contractual means with the buyer. Finally, "…the manufacturer or seller must refrain from selling such a component part where they know or, in the light of all the relevant circumstances, ought reasonably to know that the part in question will not be used in accordance with the conditions laid down in Article 110(1)".

In summary, the CJEU stated that "…Article 110(1)… must be interpreted as meaning that, in order to rely on the ‘repair’ clause contained in that provision, the manufacturer or seller of a component part of a complex product are under a duty of diligence as regards compliance by downstream users with the conditions laid down in that provision".

The case is a very important one, and clarifies the provisions surrounding the repairing of vehicles or goods owned by an individual and in particular the sale of those goods for repair. The onus is clearly on the seller, which makes sense, as they are the ones likely to benefit from the sales of the goods for repair, rather than the rightsholder.

Source: D Young

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