Manufacture and sale of replica wheel rims for the purpose of restoring the original appearance of vehicles and with the aim of permitting the repair thereof allowed, subject to compliance with a duty of dilligence

C-397/16

Acacia v Audi

:

20 Dec 2017

The matter at hand

Article 110(1) of the Community Design Regulation provides that ‘protection as a Community design shall not exist for a design which constitutes a component part of a complex product used (…) for the purpose of the repair of that complex product so as to restore its original appearance’.

Acacia manufactures wheel rims that fit Audi and Porsche cars and sells them via its website as replacement parts for the purpose of making repairs. The wheel rims are identical to the original wheel rims in which Audi and Porsche hold Community design rights and are stamped with the indication ‘NOT OEM’, which means not made by the original equipment manufacturer.

Audi and Porsche both brought infringement proceedings (Audi in Italy and Porsche in Germany) against Acacia, seeking a declaration that Acacia’s manufacture and sale of the wheel rims at issue constitutes an infringement of their Community design rights. Acacia contested this claim, arguing that the manufacture and sale of replica wheel rims for the purpose of restoring the original appearance of Audi and Porsche cars is allowed under Article 110(1) of the Community Design Regulation. This led both the Italian Corte d’appello di Milano and the German Bundesgerichtshof to refer several questions to the ECJ regarding the interpretation of  Article 110(1).

The judgment of the ECJ

The ECJ first of all rules that the repair clause of Article 110(1) of the Community Design Regulation is not subject to the condition that the protected design which constitutes a component part of a complex product is dependent upon the appearance of that product. Although recital 13 of the regulation explicitly refers to this condition, it follows from the legislative work preceding the adoption of the repair clause that the absence thereof in Article 110(1) stems from a choice made during the legislative process (paragraphs 36 – 39) with the aim of aligning the wording of Article 110(1) more closely with Article 14 of the Designs Directive, which does not contain the condition either (paragraphs 44 – 48). The ECJ holds that this is consistent with the objective of the repair clause, namely “to avoid the creation of captive markets in certain spare parts and, in particular, to prevent a consumer who has bought a long lasting and perhaps expensive product from being indefinitely tied, for the purchase of external parts, to the manufacturer of the complex product” (paragraph 50). On this basis, the ECJ concludes that the scope of Article 110(1) is not limited to component parts forming part of a complex product upon whose appearance the protected design is dependent (paragraphs 53 and 54).

As to the interpretation of the words ‘component parts of a complex product’, the ECJ rules that this “covers multiple components, intended to be assembled into a complex industrial or handicraft item, which can be replaced permitting disassembly and re-assembly of such an item, without which the complex product could not be subject to normal use” (paragraph 66). Wheel rims fit this definition, “being a component of a complex product which a car constitutes, without which that product could not be subject to normal use” (paragraph 65).

The ECJ continues that Article 110(1) further requires that the component part is used with the aim of permitting repair, which implies that the component part “must be necessary for the normal use of the complex product” (paragraph 69). According to the ECJ, this means that “any use of a component part for reasons of preference or purely of convenience, such as, inter alia, the replacement of a part for aesthetic purposes or customisation of the complex product is therefore excluded from the ‘repair’ clause” (paragraph 70). The ECJ adds that at the same time, the requirement that the repair be done so as to restore the complex product to its original appearance, means that the ‘repair’ clause “applies only to component parts of a complex product that are visually identical to original parts” (paragraph 75).

Finally, the ECJ goes into the question of whether and, if so, how the manufacturer or seller of a component part of a complex product must ensure that the component part can be purchased exclusively for repair purposes. The ECJ rules that manufacturers or sellers are indeed under “a duty of diligence” as regards compliance by downstream users with the conditions of Article 110(1), requiring them to take the following measures:

  • they must inform the downstream user, through a clear and visible indication on the product, on its packaging, in the catalogues or in the sales documents, on the one hand, that the component part concerned incorporates a design of which they are not the holder and, on the other, that the part is intended exclusively to be used for the purpose of the repair of the complex product so as to restore its original appearance” (paragraph 86);

  • they must, through appropriate means, in particular contractual means, ensure that downstream users do not intend to use the component parts at issue in a way that does not comply with the conditions prescribed by Article 110(1)” (paragraph 87);

  • they “must refrain from selling such a component part where they know or, in the light of all the relevant circumstances, ought reasonably to know that the part in question will not be used in accordance with the conditions laid down in Article 110(1)” (paragraph 88).

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