Design is essential to the EU’s economy. It can transform how we live, from making products more visually appealing and user-friendly, to fostering innovation as well as making a key contribution to environmental protection and sustainability. Design often plays a lead role for innovative companies and could be a growth area in many business sectors.
It therefore comes as no surprise that design – and its protection – is a priority for the EU and featured in the European Commission’s Intellectual Property Action Plan to support the EU’s recovery and resilience, which was published on 25th November 2020. The European Commission has established that a primary goal will be a revision of European design law, with the ultimate aim of modernising and implementing design protection for the intangible assets that are a “cornerstone of today’s economy”.
According to the data collected at a European level, design-intensive industries in several jurisdictions substantially contribute to the European economy and .innovation landscape, making up almost 16% of the EU’s GDP and 14% of employment, in the period from 2014 to 2016.
Designs are protected under Directive 98/71/EC (Design Directive), which harmonised the key provisions of design law conferring an partial equivalent protection for registered designs in all Member States and Regulation (EC) No. 6/2002 (Community Design Regulation) which sets out an independent system for EU-wide protection under a single right for each of registered and unregistered designs.
The findings of the European Commission’s Evaluation of EU legislation on design protection – published on 6 November 2020 – were that the current EU design legislation framework is “overall working well” and the success of the design system currently in place has been proven by both the increase of registered Community design applications and the rising interest of companies operating in different sectors to protect their designs. However, the evaluation also highlighted a number of shortcomings in the implementation of the design framework in terms of “efficiency, effectiveness and relevance”.
Key issues identified by the European Commission
The European Commission has shortlisted the following areas as requiring action:
- Adapting design protection to the digital age, providing clarity on the subject-matter, scope of rights and limitations;
- Improving the accessibility and affordability of design protection in the EU;
- Ensuring and enhancing the interoperability of the different design protection systems throughout the EU;
- Harmonising the rules on repair and spare parts; and
- Improving effective enforcement through new technologies such as AI and blockchain.
The first aspect highlighted by the Action Plan is the need to modernise the current legal framework in order to keep it step with digitalisation. There are still uncertainties as regards the possibility of protecting digital graphical user interfaces or icons as designs, as well as, for example, sets of articles or interior design. In terms of the scope of the rights conferred to design holders, there is lack of clarity when it comes to the private use limitation in the context of 3D printing and protection against counterfeit goods transiting through the EU (e.g. currently seizure of counterfeit design goods is only possible when they are put on the EU market, while seizure of counterfeit design goods in transit is not allowed) The interaction between design law and copyright law is also still problematic and the recent guidance of the CJEU (e.g. in the Cofemel and Brompton cases (see our posts here and here) has put into question whether the margin of manoeuvre currently left to the Member States remains justified.
These grey areas need to be clarified and the design law provisions need to be robust enough to adequately protect innovative technologies in the era of digital disruption.
Other important shortcomings include the need to update some procedural requirements in terms of multiple filing or uploading of video and 3D contents on the EUIPO design filing service, or the current fee structure, which does not allow applicants to profit from a fair discount in the event of multiple designs filed in one application.
A further issue is the fragmentation of the single market for spare parts. As highlighted by the EU Commission, the lack of harmonisation in design protection for spare parts distorts competition and hampers the transition to a more sustainable economy. The key aim of the reform is to harmonise the rules regulating spare parts by introducing into the Design Directive a so-called repair clause (already provided for by the Community Design Regulation), which excludes replacement parts and accessories from design protection and allows third party manufacturers to provide customers with spare parts for repair purposes at cost-effective prices, avoiding the design infringement risks. As noted by the Commission it is evident that the more harmonised the design rules are, the greater the economic impact will be, because it will improve competition and value in the design market, make the design system more affordable, and better enable design right holders to fight counterfeiting.
In addition to the aforementioned reforms, the Commission will, together with stakeholders and IP offices, explore the use of new technologies such as AI and blockchain to further improve the effectiveness of European IP systems. The Commission considers that new technologies can help facilitate the protection of IP, improve transparency, allow for a smoother distribution of license fees, and more effectively tackle counterfeiting and piracy.
In its reform of EU legislation on design protection, the Commission aims to promote design excellence, innovation and competitiveness in the EU by ensuring that the design protection system is fit for purpose in the digital age, becomes substantially more accessible and efficient for individual designers, design intensive industries and SMEs, and contributes to objectives of the green transition and the circular economy. We will still have to wait several months before we see any significant changes in the law as the target date set under the IP Action plan for the discussion and determination of the design issues is Q4 2021. Nonetheless, the effects of any reform could soon have a significant impact on EU economy.
For more on the EU’s IP Action Plan see our post here.