European Court of Justice clarifies ownership of European Community design rights
With two exceptions, United Kingdom design rights belong in the first instance to the designer of the protected object. These exceptions apply where the design was created by an employee in the course of his employment, in which case the design belongs to the employer, and where the design was commissioned, in which case the design right belongs to the commissioner. Similar provisions exist in many other European states.
The European Court of Justice (ECJ) has now confirmed that the second of these exceptions does not apply to European Community design rights. That is to say, in the absence of any explicit agreements to the contrary, ownership of European Community design rights remains with the designer, rather than the commissioner, when those rights arise from commissioned work.
The ECJ gave its judgement in response to questions from the Spanish courts handling a case concerning a claim by Fundacion Espanola para la Innovacion de la Artesania (FEIA) against Cul de Sac Espacio Creativo SL (Cul de Sac) and Acierta Product & Position SA (Acierta).
FEIA had devised a project known as D’ARTES under which a variety of designs were to be produced. FEIA engaged the services of AC&G to manage this project for them, and part of the terms of the relationship between FEIA and AC&G was that design rights arising from the D’ARTES project would belong to FEIA.
AC&G commissioned Cul de Sac to produce a design for a cuckoo clock, which was then manufactured under the D’ARTES project as part of the ‘Santamaria’ collection. At a later date, Cul de Sac and Acierta produced and marketed cuckoo clocks as part of their own ‘Timeless’ collection.
FEIA considered the clocks produced and marketed by Cul de Sac and Acierta to infringe the unregistered European Community design rights that arose from the production of the ‘Santamaria’ collection and, moreover, that they were entitled to these rights as a result of their agreement with AC&G. The assertion that the creation of the ‘Santamaria’ cuckoo clocks had given rise to unregistered European Community design rights was not in dispute, but Cul de Sac denied that these had ever belonged to AC&G, meaning that they could not have passed to FEIA. FEIA argued that AC&G had owned these rights because they had commissioned the work. The Spanish court handling the matter passed the question of whether unregistered European Community design rights belong to the designer or the commissioner when they arise as a result of commissioned work to the ECJ.
The ECJ responded that the provisions of the European regulation establishing Community Design rights provided that, while an employer was entitled to unregistered European Community design rights where they arose as a result of an employment relationship, there was, in the absence of any agreement to the contrary, no equivalent right for a commissioner of a protected design. As a result, the unregistered European Community design rights rested with Cul de Sac and FEIA had no cause of action to object to the ‘Timeless’ collection.
This particular case related to unregistered Community design rights and did not explicitly consider registered Community design rights. However, it is to be expected that a similar decision would have been reached for registered Community design rights as the same regulations regarding initial ownership apply. On the other hand, the case is unlikely to apply to United Kingdom design rights as statutory provisions ensure that these belong to the commissioner rather than the designer in the first instance.
The case highlights the importance of clearly defining the intended ownership of intellectual property arising from joint ventures at the outset, rather than attempting to clarify these matters after the fact. Even where there are provisions suggesting ownership belongs to one or other party in the first instance (such as is the case for United Kingdom design rights), our practice is to suggest that a confirmatory assignment agreement is completed to avoid any possible ambiguity and reduce the risk of dispute at a later stage.
A copy of the judgement can be found at http://www.bailii.org/eu/cases/EUECJ/2009/C3208.html.
If you would like more information on this case and how it may affect you, please contact your usual attorney at Thompson Gray.
22 September 2009