We recently received further guidance from the CJEU on jurisdiction in proceedings for Community registered design infringement and on the scope of the defence for citation of a registered design following a referral by the German court (Nintendo Co Ltd v BigBen Interactive GmbH and another (Case C-25/16), 27 September 2017)).
As many of you are aware, over ten years ago, Nintendo Co Ltd ("Nintendo") created the interactive gaming console, the "Wii" and accompanying accessories. These included and continue to include hand-held controllers, remote controls and balance boards which allow an individual to use their body when playing the video game. Whether that be using the remote control to navigate your next tennis serve, or using the balance board to ski down the mountain, these all form part of Nintendo's offering of the "Wii" console and accessories.
Nintendo relied on its registered Community design when bringing infringement proceedings against the German games manufacturer, BigBen Interactive (France) and its subsidiary BigBen Interactive (Germany) (together, "BigBen").
BigBen are one of the biggest manufacturers and distributors in Europe of video games accessories, and were selling products that were compatible with the "Wii" console. These products featured images of the "Wii" console on their packaging and on BigBen's website, which BigBen claimed, helped to "explain or demonstrate the joint use of the goods" (the "Infringing Products"). Nintendo sought financial compensation, reimbursement of legal fees, publication of the judgment, the provision of accounting documents and finally, the destruction and recall of the Infringing Products.
The German courts held that the Infringing Products infringed and ordered BigBen to stop using the designs. It did however decline to give judgment on BigBen's use of images on its website advertising and on whether BigBen were able to rely on the "citations defence" in Article 20(1)(c) of the Community Designs Regulation (6/2002/EC) (CDR).
The citations defence
Article 20(1)(c) of the CDR provides a defence to infringement where an act of reproduction is for the purpose of making citations or of teaching, provided that the act is compatible with fair trade practice and does not unduly prejudice the normal exploitation of the design, and that mention is made of the source.
On appeal, the German courts stayed the proceedings and referred questions to the CJEU. These included:
When enforcing a claim under a Community design, can the court of a member state (whose jurisdiction with respect to a defendant is based solely on Article 79(1) of the CDR in conjunction with Article 6(1) of the Brussels Regulation), on the basis that this defendant, which is domiciled in another member state, supply the defendant domiciled in the pertinent member state with goods that may infringe intellectual property rights, adopt measures against the first mentioned defendant that are applicable throughout the EU and extend beyond the supply relationships on which jurisdiction is based?
Is the CDR (particularly Article 20(1)(c)), to be interpreted as meaning that a third party may depict a Community design for commercial purposes if it intends to sell accessory items for the right-holder's goods corresponding to the Community design? If so, what criteria applies to this?
For the purposes of Article 8(2) of Rome II, how is the place "in which the act of infringement was committed" to be determined in cases in which the infringer:
- offers goods that infringe a Community design on a website and that website is also directed at member states other than the one in which the person damaged by the infringement is domiciled; and/or
- has goods that infringe a Community design shipped to a member state other than the one in which it is domiciled?
In brief, the CJEU's answers were as follows:
1. Where a seller is sued for Community design right infringement in a member state and a manufacturer based elsewhere is a co-defendant, the national court can have jurisdiction in relation to both of them (Article 82(1) of the CDR would apply to the seller and Article 6(1) of the Brussels Regulation to the manufacturer).
Article 83(1) expressly states that a court whose jurisdiction was based on Article 82(1) of the CDR had jurisdiction in respect of acts of infringement committed or threatened within any member state.
Authorised act defence
2. Third parties can rely on the citation defence in Article 20(1)(c) when including images of goods, corresponding to Community designs, in offers for the sale of accessories to those goods when three conditions are fulfilled:
There is compatibility of the acts of reproduction with fair trade practice;
There is an absence of undue prejudice to the normal exploitation of the design; and
A mention of the source of the design is included.
The location of the infringement
3. Where a design is reproduced on a website, Article 8(2) of the Rome II had to be interpreted as meaning the country where the act of infringement was committed. It was to be distinguished from the concept of the country "where the damage occurs". Where the damage has occurred in multiple jurisdictions, an overall assessment of the defendant's conduct should be made, rather than referring to each individual act of infringement.
The CJEU's ruling on jurisdiction gives us welcomed guidance on points of jurisdiction that were previously ambiguous. The appropriate place for proceedings to be commenced in respect of multi-jurisdictional websites is now clearer and less rigid. The court has also confirmed that sanctions not originating from the CDR can still be made part of an EU-wide injunction.
Nintendo has however suffered a significant setback in respect of enforcing its registered Community designs. It is likely that BigBen will be able to rely on the citation defence in Article 20(1)(c) of the CDR as, according to the CJEU, the German courts have already commented that the second condition has been met. Going forward, it is however important to stress that the three step test will be taken on an individual case by case basis.
Nonetheless, a clear message has been received from the CJEU: third parties should be able to use illustrations of articles protected by a registered Community design to sell their own products. In the court's view, if they could not, this would act as a deterrent and discourage innovators from investing in producing accessories and compatible products.
In practice, proceedings against a defendant relating to citation of a registered design may well also include claims for trade mark infringement. This is because the citation is likely to use the name or logo of the product for which its spare part or accessory is designed. This means that claims similar to this may have a higher chance of success on the basis of a trade mark infringement claim. The two will however be closely aligned, as outlined by the CJEU, the new three stage test will boil down to whether the "fair trade practice" would be an "honest practice in industrial or commercial matters" under the EU Trade Mark Regulation.
Watch this space for the German court's decision.