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   On  a  proposal by Mr. VANNI d'ARCHIRAFI,  Commissioner  responsible  for
   Internal  Market,  the  Commission has adopted today  a  proposal  for  a
   Council Regulation on the Community Design and a Council Directive on the
   Approximation  of  the  Legislations of the Member States  on  the  Legal
   Protection of Industrial Design.

   It is necessary to have two legal instruments at the same time (i.e.  the
   directive and the regulation) for the following reasons:

   -  firstly,  the  harmonisation  of national  legislation  would  not  be
      sufficient  since national laws even if harmonised would  have  effect
      only  within the jurisdiction in which a registration has  been  taken
      out.
   -  secondly,  the  legitimate defense in cases where a  registration  has
      been taken out in one Member State but not in another would provoke  a
      fragmentation  of the Community into different national markets  which
      is incompatible with the creation of the internal market.
   -  thirdly,  the  Community protection system cannot  supersede  existing
      national  systems overnight: they will at least  temporarily  coexist,
      becoming  mutually  compatible through the  harmonisation  as  regards
      their  most  salient  features and also  compatible  with  the  future
      Community protection system.

   Commenting on the decision, Mr VANNI d'ARCHIRAFI said: "Today's  proposal
   is a very important step towards the creation of the internal market  for
   intellectual property by ensuring wide protection of Community industrial
   designs. It will help prevent counterfeiting and therefore strengthen the
   Community's  added  value.  The discussion to come will -  I  am  sure  -
   confirm the value of this proposal and, I hope, improve it even more".

   The  proposals have been drafted on the basis of  extensive  consultation
   with  interested  circles comprising  industries,  intellectual  property
   practitioners, consumer organisations and government experts.

   CONTENT OF THE PROPOSALS

   I. Why is a Community initiative necessary?
   1. In  recent years the legal protection of industrial design has  become
   an increasingly important issue. Design products now occupy an  important
   place  in  the  economy  and cover an  extremely  wide  range  of  goods.
   Artefacts,   jewellery,  machinery,  tools,  electronics   and   consumer
   electronics, motor vehicles and their component parts, yachts,  furniture
   and office equipment, sports articles, fashion and clothing and  domestic
   appliances, packaging and get-ups are just a few examples of the areas of
   typical contemporary design activity.

   2. Superior design is an important instrument for European industries  in
   their  competition  with  industries from third  countries  having  lower
   production costs.  It is design which is decisive, in many cases, for the
   commercial  success  of  products,  thus  allowing  all  those   European
   enterprises who invest heavily in development of designs to prosper.

   3. In  the  absence of efficient legal protection, however,  designs  can
   easily be misappropriated.   Reproduction of design products does not, in
   many  cases, presuppose know-how as regards  sophisticated  manufacturing
   processes. It is therefore important that appropriate measures are  taken
   to deal with possible piracy of design products.

   4. At the national level design protection has existed since the start of
   industrialisation  and a protection system based on registration is  thus
   in force in 11 Member States (Greece has no specific design  protection).
   But there is a disadvantage in national protection  based on registration
   of  designs within a given jurisdiction - namely that the  protection  is
   limited  to the territory of the State in which it has been  granted.  It
   has  no  effect in other States. The Community is  thereby  divided  into
   separate national markets. Such a situation is clearly incompatible  with
   the functioning of the internal market.

   5. Furthermore, the protection of industrial design at the national level
   varies  considerably  from  one Member State to another  as  regards  the
   conditions for protection, the scope, contents and duration of protection
   (see Annex 1).

   II.  What does the Community initiative aim at achieving?

   6. The  Commission's  proposal  for a Regulation aims  first  of  all  to
   introduce  protection  for  designs  at the level of  the  Community,  in
   other words a protection which is valid in all twelve Member States. Thus
   a designer can achieve a Community wide right by a single act of deposit.
   Conflicts stemming from the existence of an exclusive right in one Member
   State  and  possibly  not  in  others  will  be  avoided.  The  Community
   Regulation  will provide internal market conditions for design  products.
   National design rights will not be abolished, but will co-exist with  the
   Community  Design. Designers and their successors in title, however,  are
   likely  in  most cases to opt for the Community Design,  which  therefore
   should gradually supersede national rights.

   III. What are the characteristic features of a Community Design?

   7. The main characteristics of the Community Design are the following:

   7.1 The Registered Community Design
   The  purpose of design protection is to confer upon the right  holder  an
   exclusive right  in his design including the right to apply the design to
   any  product.  The  right comes into existence  following  a  simple  and
   inexpensive  registration procedure at the Community Design  Office,  and
   lasts for five years. The right is renewable for periods of five years up
   to a maximum of 25 years.

   7.2 The Unregistered Community Design
   Some  sectors  of industry often produce large numbers  of  designs  with
   short  market life, and such industries may find registration  procedures
   unwelcome, however cheap and uncomplicated these may be. They also  would
   not need a long period of protection. To accommodate the wishes expressed
   by  these  sectors (in particular textiles and fashion)  an  unregistered
   design  right  is therefore also introduced lasting a  maximum  of  three
   years.   The   Unregistered  Community  Design   comes   into   existence
   automatically when the design is made available to the public.

   Whereas  the Registered Community Design confers upon the right holder  a
   truly exclusive right as regards the use of the design, the Unregistered
   Design confers upon the right holder only protection against unauthorised
   reproduction (deliberate copying) of his design.

   A  choice between the two forms  of protection does not necessarily  have
   to  be  made  from  the  outset.  During  its  first  twelve  months   an
   Unregistered Design may be transformed into a Registered Design.

   IV.  The design concept

   8. Designs qualify for protection irrespective of whether they are of  an
   "aesthetic" or "functional" character.

   By  the  same  token the nature  of the product to which  the  design  is
   applied is immaterial. However, computer programs and the topographies of
   semi-conductor products will not be considered "products" for the purpose
   of  design protection. This is because copyright protection and  specific
   design  protection respectively have been provided for these products  by
   recent Council Directives, and the balance achieved thereby should not be
   upset by duplicating such protection with different legal instruments.

   V. The Registered Community Design. A user friendly registration system

   9.1  The   Registered   Community  Design  comes  into   existence   upon
   registration with the Community Design Office. Following the wish of  the
   future users of the protection system, registration is not dependent upon
   examination  prior  to registration as to whether  the  requirements  for
   protection  have  been fulfilled. Experience from  national  registration
   systems suggests that such  examination is  at best of limited value  and
   at  worst futile, and usually gives only a false and therefore  dangerous
   feeling of legal certainty.

   9.2  However, it is also important to be able to establish  a  reasonable
   degree  of certainty as regards the validity of the  designs  registered.
   Therefore  registrations will be monitored by an advisory  committee  set
   up by the Commission. If registrations do not fulfil the requirements for
   protection  (see  11.2  below), the Commission  may  initiate  invalidity
   proceedings before the Office or before the Courts.

   VI.  Design protection and competition

   10.1 Like  all other intellectual property rights the  registered  design
   right confers upon the right holder an exclusive right - namely the right
   to  use the design and to prevent others from doing so  unless  specially
   authorised.

      It  is thus important to legislate in such a way that  competition  in
   the  market place in generic products is not stultified.  The  Regulation
   contains   a  number  of  provisions  aiming  at  the   safeguarding   of
   competition.

   10.2 Firstly, the requirements for protection are intended to  constitute
   a  high  threshold  which  a  design  must  pass  to  be  protected.   In
   particular,  in order to be eligible for protection a design must show an
   individual character in the sense that it is significantly different from
   other  designs available in the market, whereas commonplace  designs  are
   considered to be in the public domain.

   10.3 Secondly,  design features which are not arbitrary but necessary  to
   achieve a specific technical function are not included in the  definition
   of  design.  If, however, the designer has a choice as to  how  the  same
   technical function can be achieved the design is eligible for protection.

   10.4 Thirdly,  interconnections are also excluded from the definition  of
   design.  This  means that features of design, which must  necessarily  be
   reproduced  in  their  exact shape and dimension to  permit  products  of
   different  make  to connect to each other are to be disregarded  for  the
   purpose of design protection in every respect. Such interconnections must
   therefore  also  be disregarded when deciding whether the  design  has  a
   sufficiently individual character.

      An exception with limited scope from this rule has only been made  for
   so-called modular products,  where the design is specifically intended to
   allow  for unlimited and extended attachment of products to one  another.
   Modular  furniture and some toys are examples of the application  of  the
   exception.

      The  exclusion of interconnections from the definition of  design  for
   the  purpose  of  the  Regulation  is important  and  it  is  a  concrete
   expression  of  the Commission's commitment to the  inter-operability  of
   products.  This  provision  will  prevent  the  monopolisation  of  whole
   markets, which could have happened in the absence of such a provision.

      As a consequence spare parts for a number of long lasting goods can be
   produced by other than the original manufacturer insofar as the  consumer
   is  not concerned with the appearance of the product, for example if  the

   part  in question is a hidden part. Exhaust pipes fixed under a  car  for
   example could be produced without regard to intellectual property rights.

   VII. Repair clause

   10.5 In  some  cases,  however,  the  consumer  is  concerned  with   the
   appearance  of a part used for repair purposes. In those  cases  consumer
   choice  in  competitive parts would be excluded if the  replacement  part
   needed  is  subject  to  a design right. As a  consequence  of  the  high
   threshold  for  protection this should  only exceptionally be  the  case,
   even  if the appearance of the complex product of course is eligible  for
   protection. However, some sufficiently distinctive parts, which could  in
   the  past  have  been  the subject of design  rights  according  to  some
   national  laws,  could  also in the future prove  to  be  protectable  as
   Community  Designs.  Therefore  consumers  and  independent  spare   part
   producers have claimed the need for a provision making the production and
   the acquisition of such parts legitimate, by way of an exception from the
   exclusive right.

   10.6 The  Commission,  after  having carefully  examined  the  case,  has
   decided  that a "repair clause" should indeed be introduced and has  done
   so in the Regulation. The clause gives any third party, three years after
   marketing  of a complex product, the right to reproduce a design  applied
   to  a part of the complex product, if the design of the part is  dictated
   by  the appearance of the complex  product. The exception is  called  the
   "repair clause" because it covers only the repair of the complex  product
   so as to restore its original appearance. The right comes into  existence
   three  years  after  the  first marketing of the  product  to  which  the
   protected  design is applied. It would thus entail that  producers  could
   protect  the  design  of a part as such  provided  the  requirements  for
   protection  are met and would enjoy exclusive rights for a  short  period
   after launching the complex product on the market.  For independent spare
   part  producers it will entail that  they can compete for a share in  the
   after market. For consumers the clause will provide for a choice  between
   competing parts for the greater part  of the life of the product.

   10.7 The  right  to reproduce must, however, be exercised in such  a  way
   that consumers are not misled as to the origin of the competing product.

   VIII. Harmonisation of national design protection laws

   11.1 The Community Design will provide designers and manufacturers with a
   Community wide protection system. This system cannot, however,  supersede
   overnight the national design protection systems, which consequently will
   continue to exist.

   11.2 National  design protection laws differ to a high degree as  regards
   the  conditions for protection, the scope and contents of protection  and
   the duration of protection.

   11.3 To  provide for internal market conditions in cases  where  national
   protection  is used, and to make national protection compatible with  the
   Community  Design,  the Commission has also adopted a  proposal  for  the
   approximation of national design protection laws.

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