UNITARY COMMUNITY DESIGN
(21777)
12770/00
COM(00) 660
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Amended proposal for a Council Regulation on Community Design of 20 October.
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| Legal base:
| Article 308 EC; unanimity
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| Department: |
Trade and Industry |
| Basis of consideration:
| SEMs of 24 and 27 November 2000
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| Previous Committee Report:
| HC 23-xxx (1999-2000), paragraph 6 (22 November 2000)
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| To be discussed in Council:
| 30 November 2000 |
| Committee's assessment:
| Politically important |
| Committee's decision:
| Cleared |
Background
19.1 The Commission put forward a proposal in
1993 for a Directive on the legal protection of designs[48]
and another for a Regulation to provide for a Community Design
and a Community Design Office.[49]
It was subsequently decided to hold back the proposed Regulation
until the Directive had been adopted. This is now awaiting implementation
into UK law, having eventually been adopted in 1998.[50]
The Directive on the Legal Protection of Designs
19.2 Protection of designs in the EC is achieved
at present through national registration systems. The Designs
Directive reduces the risk of distortion of the Internal Market
through rights afforded to a new design differing in different
Member States. It harmonises substantive aspects of national laws,
except as regards the protection of component parts of larger
products which can be used for repair so as to restore the original
appearance of the larger product — so-called 'must-match'
spare parts, such as body panels and light clusters. On this point,
agreement could not be reached. Member States were required to
keep their existing laws in this area, changes being allowed only
if they were a liberalisation of the market for these parts. The
UK does not permit registration of the design of these parts.
In October 2004, the Commission is required to submit an analysis
of the effects of the Directive on the market. This must, in particular,
study the market in these parts. It must then submit a proposal
within another year to amend the Directive to complete the internal
market in this area.
The proposed Regulation
19.3 The draft Regulation provides for a system
of protection of designs, affording unitary rights simultaneously
across all 15 Member States. The nature, requirements for protection,
grounds for invalidity or refusal and scope of rights mirror the
provisions of the Designs Directive.
19.4 We considered an amended version of the
draft Regulation on 22 November. In his Explanatory Memorandum
of 17 November on that draft, the Parliamentary Under-Secretary
of State for Consumers and Corporate Affairs (Dr Kim Howells)
said that several issues had yet to be agreed in the Council Working
Group and COREPER. These were expected to be the subject of further
amendments. The issue of greatest concern to the UK was that of
the treatment of "must-match" spare parts under Article
10a which, in the text considered, read:
"Transitional provision
"Until such time as amendments to this Regulation
are adopted on a proposal from the Commission on this subject,
a Community design shall not exist in a design applied to or incorporated
in a product, which constitutes a component part of a complex
product upon whose appearance the design is dependent.
"The proposal from the Commission, referred
to in paragraph 1, shall be submitted together with, and take
into consideration, any changes which the Commission shall propose
on the same subject pursuant to Article 18 of Directive 98/71/EC
on the legal protection of designs".
19.5 Since the Government was not in a position
to provide us with a version of the alternative text to Article
10a which it believed would be brought forward, we asked the Minister
to submit a Supplementary Explanatory Memorandum, setting out
the significance of the text proposed, the Government's view of
it and of how it was likely to be received in the Council.
The Supplementary Explanatory Memorandum
19.6 In a supplementary Explanatory Memorandum
dated 24 November, the Minister provides details of the latest
version of the text available to him. This is the text put to
COREPER on 22/23 November. COREPER proposed amendments, which
we describe at paragraph 1.12 below.
— Spare parts
19.7 On the issue of spare parts, the Minister
says that Article 10a will be replaced by a new Article 127a and
will read:
19.8 As before, the Article is a temporary provision,
covering the matter of designs for components of complex products
which must match the larger whole, such as car body panels. The
use of design rights to protect such parts raised concerns about
the anti-competitive effect of an original manufacturer also being
able to control the after-market in spare parts. Until the 2005
review required under the Directive is completed, this proposal
allows designs to be registered, but not to be enforced against
the manufacture or use of these parts for repair purposes. Because
designs have to be new when they are registered, many Member States
were concerned that the Commission's proposal, which did not allow
registration, unfairly closed the door on the possibility of protection
for such parts created during the period of study and negotiation,
even though the outcome may be to allow protection. The Minister
says that this proposal meets those concerns:
"It also allows enforcement
of the rights against original uses (eg Company A would not be
permitted to copy a Company B's wing mirror for use in a new design
of car), but this does not affect the position of the aftermarket."
— Ownership of designs
19.9 The Minister points out that Article 14(3)
allows national laws on ownership of designs which are produced
by an employee in the course of his employment to override the
general provision in the Regulation. He comments that this should
not have an effect on UK residents and companies, since the relevant
part of our law is consistent.
— Languages
19.10 In the Commission's proposal, the languages
used in proceedings at the Community Design Office would follow
the same rules as those in the Community Trade Mark Regulation.
That is, that applications can be made in any official language
of the Community, but further proceedings must be in one of the
languages of the Office, viz, English, French, German, Italian
or Spanish, at the applicant's option. The Minister says that
some Member States with official languages not amongst those of
the Office are concerned about this and the Presidency has decided
to defer further discussion until the technical aspects of the
Regulation have been agreed.
The Government's view
19.11 Commenting generally on the text as now
proposed, the Minister says:
"The spare parts provisions
are consistent with UK national registered design law, under which
independent manufacturers may produce spare parts (for example
body panels and light clusters) without risk of infringement.
However, the fact that registration exists leaves the possibility
that a change in law following the Commission's 2005 proposal
could mean that the rights could become usable against previously
legitimate manufacturers. Representatives of the spare parts industry
are aware of this. They have indicated that they can accept this
legal uncertainty".
19.12 In a short unsigned Explanatory Memorandum
dated 27 November, the Patent Office informs us that COREPER accepted
the principle of the text which was the subject of the Supplementary
Explanatory Memorandum. It agreed that it should not be possible
to bring an action in respect of a Community design for a 'must-match'
part against any use which was necessary for repair purposes.
However, it proposed that Article 127a(1) should be amended as
follows:
"1. Until such time
as amendments to this Regulation enter into force on a proposal
from the Commission on this subject, protection as a Community
design shall not exist for a design which constitutes a component
part of a complex product, manufactured
or used used within the meaning
of Article 20(1) for the purpose of the repair of that complex
product so as to restore its original appearance".
19.13 Article 20(1) reads:
"A registered Community
design shall confer on its holder the exclusive right to use it
and to prevent any third party not having his consent from using
it. The aforementioned use shall cover, in particular, the 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."
19.14 The Patent Office comments that this amendment
is subject to scrutiny reservations in other Member States, but
was agreed in principle. It poses no difficulties for the Government
since:
"it more clearly states
what was implicit in the version in the Supplementary Explanatory
Memorandum: that rights cannot be enforced against import, sale
and stocking of these products which are done to allow repairs,
as well as the actions of manufacture of products and repair using
the products".
Conclusion
19.15 The Minister did not provide us with
an assessment of the reactions of the other Member States to the
text he saw. However, COREPER has since accepted the principle
of that text and the proposal is subject to agreement by unanimity.
Since the text, in both versions described here, is acceptable
to the UK, we now clear the document.
48 (15075)1143/93; see HC 48-viii (1993-94), paragraph
1 (16 February 1994). Back
49 (15090)
11439/93; see HC 48-viii (1993-94), paragraph 1 (16 February 1994). Back
50 Directive
98/71/EC; OJ No. L 289, 28.10.98, p.28. Back
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