The legal framework in the European Union and in Italy.
Design models occupy a peculiar area in the world of IP. Throughout the European Union they are governed by Council Regulation (EC) No 6/2002 of 12 December 2001 on Community designs. According to this Regulation, the term ‘design’ refers to “.. the appearance of the whole or a part of a product resulting from the features of, in particular, the lines, contours, colors, shape, texture and/or materials of the product itself and/or its ornamentation” (so, Article 3).
In order to enjoy protection under the Regulation a ‘design’ needs to be “new” and to have “individual character” (so Article 4), such latter requirement meaning that “..the overall impression it produces on the informed user”has to differ“from the overall impression produced on such a user by any design which has been made available to the public..” (so, Article 6).
In Italy, the local sector specific provisions obviously adhere to those contained in the Regulation. Hence, the definitions set by the Italian Code of Industrial Property (i.e. Legislative Decree no. 30 of 10 February 2005) for ‘designs’ and ‘models’ are identical to those of the Regulation and the same goes for the requirements (novelty and individual character) allowing local registration.
In addition, the Italian Copyright Act (i.e. Law No. 633 of April 22, 1941, as amended in the following) offers its protection and enforcement measures also to “works of sculpture, painting, drawing, engraving and similar figurative arts, including scenic art,even where such works are applied to industrial products, if their artistic value is distinct from the industrial character of the product with which they are associated..” (so, Article 2/4).
The legal issues involved by the Regulation’s provisions.
While the EU Regulation’s wording appears clear and specific (and in line with what one expects in terms of IP protection), Courts frequently struggle when it comes to applying such provisions to cases in which parties fight over alleged violations.
Such difficulties are understandable, if we consider that the cases ending up in Court usually involve industrially manufactured products – or handicraft items – deemed to fulfill common needs of a broad target public. Given such purpose, assessing whether the ‘individual character’ of a product/item is exactly perceived by the overall impression of an informed user, is not always an easy task. Even slight or marginal differences may impact significantly on such assessment.
Being a famous brand with products known by a broad audience not automatically results sufficient to benefit from IP protection under the community design Regulation, as a German car producer had recently to learn – in the context of a dispute with the EUIPO – in relation to the models of its 911 series (reference is to decision of June 6, 2019 of the Third Section of the Court of Justice of the European Union, case T-209/18).
The approach local plaintiffs usually follow when filing such disputes.
To overcome the uncertainties to the ‘overall impression’ perceived by an informed user, in Italy plaintiffs prefer to not exclusively rely on classic IP infringement violations (i.e. of the provisions governing copyright, trademarks or design models) but feel better off by accompanying their actions with claims structured under a counterfeiting or unfair competition perspective.
Such approach resulted successful for the manufacturer of Italy’s most famous scooter model, the ‘Vespa’, in a lawsuit filed in front of a First Instance Court in Turin against a Chinese company (for the details of the case kindly refer to my January 15, 2019 post on this blog).
Instead, the same Court disappointed a renown Italian car producer when approached in the context of a dispute about die-cast versions of several of the producer’s most famous, ancient car models, distributed on the market by a local company specializing in manufacturing such mini versions (reference is to decision no. 482 of January 31, 2019 of the IP Section of the Court in Turin). On receipt of a cease and desist letter from the car producer, the manufacturer of the die-cast version filed an action meant to obtain a declaratory judgment of fair use. The defendant reacted with a counterclaim alleging that the manufacturer mini versions resulted in an infringement of the provisions of the Italian Copyright Act, granting protection to industrial designs capable of distinguishing themselves through a creative and artistic value.
After dealing with some procedural issues and noticing that the plaintiff had been on the market since 1970 with its mini car models (appreciated by collectors all over the world), the Court found that:
- all mini car models – save two – did clearly not infringe on the defendant’s IP rights,
- with respect to the two remaining from those in dispute – even though being these two extremely popular among vintage car collectors and fans – the defendant (and counterclaimant) had failed to properly substantiate the requirement of an ‘autonomous creative and artistic value’,
- to prove the presence of such characteristic (i.e. the ‘added value’ allowing copyright protection for products originating from industrial designs), the defendant should have relied on elements such as: the recognition of artistic and esthetic value from cultural or public institutions, presence in museums or exhibitions, comments articles published in specialized magazines not pursuing a mere commercial intent, participation to artistic events, assignment of awards, achievement of a commercial value significantly superior to that of the product’s functional value, the creation of the design by a well-known artist,
- in the case at hand, while the designs in dispute had been conceived by two of famous and broadly appreciated car ‘designers’, such fact did not automatically imply that the authors could be considered as ‘well-known artists’ (leading – in the Court’s view – to the conclusion that the two models could claim a significant ‘creative and historic’ but not an ‘artistic’ value),
- even in relation to the two remaining mini car models no infringement of third parties’ IP right could be found.
Hence, the plaintiff’s claim for a declaration of non-infringement was accepted, while all the defendants’ counterclaims were rejected with all legal fees put on them.
A recent case in which a local Court followed a different approach.
Recently a well-known local producer of sports and racing cars took issue with a company specializing in the manufacturing of personalized versions of luxury cars. The dispute involved a specific sports car model (the Ferrari GTO 250), which to all collectors constitutes a sort of ‘Holy Grail’ and ‘dream object’ (provided they are able to shell out a sum close to 50 million USD, i.e. the price obtained at the Monterey Car Week 2018 auction in the US). This model was conceived and produced – in the early 60ies and in only 36 examples – by a famous designer and coachbuilder under the Ferrari brand.
A small local company announced its plan – through promotional messages published on sector specific magazines, featuring renderings of the car models to be launched - that it intended to offer for sale a reproduction of the GTO 250. When Ferrari learned about this planned initiative, it felt that its IP rights would be disregarded by such ‘reproduction’ and that the provisions protecting trademarks, designs and copyright as well as those granting fair competition would be infringed.
Rushing for a preliminary injunction.
Hence, Ferrari filed a preliminary proceeding before the IP Section of the First Instance Court in Bologna to seek a temporary injunction in order to prevent the initiative.
However, the Court accepted the defendant’s argument that none of the alleged violations would occur as significant esthetical differences could be found between the original GTO 250 and the car model presented in the renderings and dismissed the plaintiff’s request for injunctive relief.
Second round: going to the bench of the Court for further consideration.
Ferrari, not being prepared to accept such outcome, filed a motion for further consideration (a sort of appeal in preliminary proceedings) to the Bench of the Court (which decides sitting in a panel of three judges).
Through order dated June 20, 2019 the Court reverted the previous decision. The Court grounded its decisions on the following reasons:
- firstly, it reminded that the plaintiff had sought for temporary measures under a broad range of laws and regulations such as: the EU Community Designs Regulation, the provisions of the Italian Industrial Property Code and those of the local Copyright Act (with specific reference to the provisions protecting designs, trademarks and copyright) as well as Statute Law governing counterfeiting and acts of unfair competition,
- the plaintiff had correctly argued that the previous decision had exclusively focused on the aspect related to the counterfeiting of its trademarks, failing to deal with all the other issues put forward in the submitted claims,
- specifically, the previous decision had omitted to consider whether the planned ‘reproduction’ of the GTO 250 would result in a violation of Ferrari’s exclusive rights granted: (a) under the provisions of the IP Code to a product of industrial design with an ‘individual character’, (b) by the Copy Right Act to ‘industrial products’ capable of achieving a ‘creative’ and ‘artistic value’, i.e. a value ‘distinct’ from and ‘additional’ to that inherent to its mere functionality,
- the Ferrari GTO 250 could legitimately claim those exclusive rights as its characteristics fulfilled the requirements set for benefitting from copyright protection, as the originality of the design, the strong customization of the lines, of the shape and of the aesthetics had transformed this car over the time into an unicumof its kind, a true icon within the automotive sector,
- the artistic value – widely transcending that of its functionality - of this car model was supported by several prizes and official awards assigned to the originality and the outstanding quality of its design, by the amount of appearances in (not just sector specific) publications and in exhibitions in museums both, national as well as international, by the fame of its creator (internationally known and referred to as “Maestro S.”) and – last but not least – by the economic value achieved in the collectors’ market,
- on the other hand, the defendant’s reproduction of the Ferrari car did not result in a significant and recognizable reworking of the design, as the differences present did relate to non-essential, marginal aspects, as such insufficient to avoid and illegal imitation,
- in addition, as the defendant’s campaign to promote the planned reproduction heavily relied on Ferrari’s brand reputation (through numerous comparative references to the plaintiff’s trademarks and brands), acts of unfair competition (in terms of passing off/misappropriation) could also be found.
Hence the Court overturned the previous decisions and granted the injunctive relief sought by the plaintiff, and ordered the defendant to restrain from any further diffusion of the rendering of the planned GTO 250 reproduction as well as from any production and marketing, use in its commercial communication of references to plaintiff’s brands.
The Court has affirmed a truly interesting opinion by stating that a product originating from an industrial design (and specifically a car model) in certain cases can constitute an ‘object of artistic value’, being able to benefit - as such - from copyright protection. It also appears clear that how a claim is structured and supported by strong elements of substantiation, will result crucial for those seeking protection in Court for a design. Just relying on brand reputation or on facts of common knowledge, hardly will grant success in Court and adequate protection to IP rights.