Explanatory Memorandum to COM(2022)666 - Amendment of Council Regulation (EC) No 6/2002 on Community designs - Main contents
Please note
This page contains a limited version of this dossier in the EU Monitor.
| dossier | COM(2022)666 - Amendment of Council Regulation (EC) No 6/2002 on Community designs. |
|---|---|
| source | COM(2022)666  |
| date | 28-11-2022 |
1. CONTEXT OF THE PROPOSAL
• Reasons for and objectives of the proposal
Industrial design rights protect the appearance of a product. Industrial design is what makes a product appealing. Visual appeal is one of the key factors that influence consumers' choice of preferring one product to another. Well-designed products create an important competitive advantage for producers. To encourage innovation and the creation of new product design in the digital age, there is an increasing need for accessible, future-proofed, effective and consistent legal protection of design rights.
The industrial design protection system in Europe is more than twenty years old. The laws of the Member States relating to industrial designs were partially aligned by Directive 98/71/EC of the European Parliament and of the Council of 13 October 1998 (‘the Directive’).
Alongside the national design protection systems, Council Regulation (EC) No 6/2002 of 12 December 2001 (‘the Regulation’) established a stand-alone system for protecting unitary rights that have equal effect throughout the EU in form of the registered Community design (‘RCD’) and the unregistered Community design. It is only once that the Regulation was amended in 2006 to give effect to the EU joining the international Hague registration system.
In addition, a transitional legal regime still exists in relation to design protection for repair spare parts. As no agreement could be reached on that point, the Directive includes a ‘freeze-plus clause’, under which Member States may retain their existing laws on whether spare parts should benefit from protection until amendments to the Directive are adopted on a proposal from the Commission. For that reason, Regulation (EC) No 6/2002 exempts repair spare parts from Community design protection until the Council has decided its policy on this issue on the basis of a Commission proposal.
A proposal presented by the Commission in 2004 1 to align design protection for visible spare parts by introducing a ‘repair clause’ into the Directive (as already contained in the Regulation), did not receive sufficient support in the Council, despite overwhelming support by the European Parliament 2 , and was withdrawn in 2014.
In line with the Commission’s Better Regulation agenda 3 to review EU policies regularly, in 2014 the Commission launched an evaluation of the operation of the design protection systems in the EU, involving a comprehensive economic and legal assessment, supported by a series of studies. On 11 November 2020, the Council of the European Union adopted conclusions on intellectual property policy and the revision of the industrial designs system in the EU 4 . The Council called on the Commission to present proposals for revising the EU’s designs legislation, with a view to modernising the design protection systems and making design protection more attractive for individual designers and businesses, especially small and medium-sized enterprises (SMEs).
Based on the final results of the evaluation 5 , the Commission announced in its communication of 25 November 2020 entitled ‘Making the most of the EU’s innovative potential – An intellectual property action plan to support the EU’s recovery and resilience’ 6 that it will revise the EU legislation on design protection, following the successful reform of the EU trade mark legislation. On 25 June 2021, the Council adopted further conclusions on intellectual property policy 7 , urging the Commission to prioritise the timely presentation of a proposal as soon as possible on revising and modernising the legislation on industrial designs. Furthermore, in its supportive Opinion on the IP Action Plan, the European Parliament stressed the need for revising the design protection system since it had been established 20 years ago 8 .
Considered together as a package within the Regulatory Fitness Programme (REFIT), the main common objective of this initiative and of the parallel proposal for recasting the Directive is to promote design excellence, innovation and competitiveness in the EU. This is to be done by ensuring that the overall design protection system is fit for purpose in the digital age and becomes substantially more accessible and efficient for individual designers, SMEs and design intensive industries in terms of lower costs and complexity, increased speed, greater predictability and legal certainty.
Specifically, the present initiative to amend the Regulation is driven by the following objectives:
–Modernising and improving existing provisions, by amending outdated provisions, increasing legal certainty and clarifying rights in terms of scope and limitations;
–Improving the accessibility, efficiency and affordability of RCD protection, by simplifying and streamlining procedures, and adjusting and optimising the level and structure of payable fees.
• Consistency with existing legislative provisions in this field
This proposal is to amend Council Regulation (EC) No 6/2002. Together with the parallel proposal for recasting Directive 98/71/EC, this proposal forms a coherent package in implementing the IP Action Plan and with the purpose of modernising and further aligning the current EU legislation on design protection.
This proposal is also consistent with Regulation (EU) 2017/1001 of the European Parliament and of the Council on the European Union trade mark. This is, for example, the case with regard to the scope of design rights which, like the scope of EU trade marks, is extended to cover counterfeit goods in transit and other customs situations. It is also true for certain provisions on procedures which at present only form part of the EU trade mark regime and are proposed to be inserted into the revision of Regulation (EC) No 6/2002, such as those regarding the continuation of proceedings or the revocation of decisions (see also below under alignment with EU trade mark proceedings). Furthermore, for the sake of consistency, it is proposed to confer the same delegated and implementing powers to the Commission as was done in Regulation (EU) 2017/1001.
• Consistency with other EU policies
Because this proposal plans to convert the transitional repair clause, currently in Article 110 of Regulation (EC) No 6/2002, into a permanent provision to be found in the proposed new Article 20a of that Regulation, in line with the insertion of a repair clause into the Directive, the proposal is consistent with and complementary to Regulation (EU) 461/2010 (the Motor Vehicle Block Exemption Regulation or ‘MVBER’) in the field of antitrust policy.
The proposal to maintain that repair clause in Regulation (EC) No 6/2002 is also consistent with and complements efforts put forward in the Sustainable Product Initiative that aims to promote repairs and the circular economy.
2. LEGAL BASIS, SUBSIDIARITY AND PROPORTIONALITY
• Legal basis
The proposal is based on Article 118(1) TFEU empowering the European Parliament and the Council to establish measures to create European intellectual property rights throughout the EU, including setting up centralised EU-wide authorisation, coordination and supervision arrangements.
This is a change from the legal base applied to Regulation (EC) No 6/2002, which, like the first Community Trade Mark Regulation (Regulation 40/94 on the Community trade mark), was based on Article 308 of the EC Treaty.
Article 118 was introduced by the Treaty on the Functioning of the European Union (TFEU) and now provides an express legal base for EU-wide intellectual property rights. It is also now the legal basis for Regulation (EU) 2017/1001 of the European Parliament and of the Council on the European Union trade mark.
• Subsidiarity (for non-exclusive competence)
Article 118(1) TFEU can only be applied to create European intellectual property titles. The Union design system is an autonomous regime created by an EU Regulation and applies independently of any national system.
The EUIPO (formerly OHIM) is a regulatory agency with legal, administrative and financial autonomy, which was created by the Council to manage the registration system for the RCD and Community trade mark (now the EU trade mark). As was the case with the changes introduced to the trade marks regime under Regulation (EU) 2017/1001, the analysis carried out in the impact assessment to this initiative proved that certain provisions in Regulation (EC) No 6/2002 need to be amended, in particular to improve and streamline the registration system for the RCD.
• Proportionality
The proposal has been designed to reduce the administrative burden and compliance costs for businesses and individual designers using the Community design system and for the EUIPO. The proposal involves targeted amendments to the self-standing Regulation (EC) No 6/2002 and does not go beyond what is necessary to achieve the identified objectives.
• Choice of instrument
The objectives of this proposal can only be achieved by a legislative act that will amend the existing substantive and procedural provisions governing the Community design, which is in the form of a regulation. Therefore, a regulation amending Regulation (EC) No 6/2002 is required.
3. RESULTS OF EX-POST EVALUATIONS, STAKEHOLDER CONSULTATIONS AND IMPACT ASSESSMENTS
• Ex-post evaluations/fitness checks of existing legislation
The Commission carried out an overall evaluation of the current Directive and Regulation, which was published in November 2020 9 . It concluded that the EU legislation on design protection had met the objectives and was still largely fit for purpose.
However, with respect to Regulation (EC) No 6/2002, the evaluation identified certain shortcomings. In particular, the procedures for registering RCDs are partly outdated or involve unnecessary administrative burden, and the level and structure of payable fees are sub-optimal.
Based on the findings of the evaluation, the European Commission conducted an impact assessment and thereafter decided to revise the legislation. The various steps in the impact assessment, from defining problems and their causes to identifying objectives and possible policy options, relied on the findings of the evaluation report.
• Stakeholder consultations
A comprehensive first public consultation was conducted between 18 December 2018 and 30 April 2019 10 with the aim of (i) gathering sufficient stakeholder evidence and views to support the evaluation of the EU designs legislation and (ii) establishing the degree to which that legislation works as intended and can still be considered fit for purpose.
Almost two thirds of respondents considered that the industrial design protection system in the EU (national design system under the Directive and the Community design regime altogether) works well. At the same time, almost half of the respondents pointed at unintended consequences or shortcomings in the Regulation and/or the Directive.
As a complement to the extensive consultation for the evaluation, the Commission carried out a second public consultation between 29 April and 22 July 2021 11 to obtain additional stakeholder evidence and views on selected issues and potential options and their impacts, to support the review of the legislation on designs.
• Collection and use of expertise
The impact assessment on the revision of Regulation (EC) No 6/2002 and Directive 98/71/EC relied in particular on two external studies, considering both economic 12 and legal 13 aspects of the functioning of the design protection systems in the EU. In addition, as for the issue of spare parts protection specifically, the impact assessment was supported by two further studies on the effect that protection has on price and price dispersion 14 and on the market structure of motor vehicle spare parts in the EU 15 .
Further information in support of the impact assessment was drawn from close collaboration with the EUIPO and several other studies and reports it had prepared, as well as other available studies and data collections prepared by national and international public authorities, including national IP offices, academics and other stakeholders.
• Impact assessment
As this proposal is presented in a package alongside the proposal to revise Directive 98/71/EC, the Commission conducted a joint impact assessment for both it and the parallel proposal to recast Directive 98/71/EC 16 . This impact assessment was submitted to the Regulatory Scrutiny Board on 27 October and was given a positive opinion by the Board on 26 November 2021. The final impact assessment takes into account comments contained in that opinion.
1. The disruption in intra-EU trade and barriers to competition in some Member States with regard to repair spare parts.
2. The discouragement of businesses, in particular SMEs and individual designers from seeking registered design protection at EU or national level - due to the high costs, burdens and delays in obtaining protection and the limited predictability around it.
While the spare parts issue (first problem) and the issue of divergent (procedural) provisions as part of the second problem are due to be addressed in the parallel revision of the Directive, the partly outdated procedures for registering Community designs and sub-optimal fees to be paid for registered Community designs must be dealt with in the revision of Regulation (EC) 6/2002.
The following sole (straightforward) option was considered for resolving the problem of complex procedures for registering RCDs and tackling the objective of making protection more accessible and efficient:
Option 2: Simplification and streamlining of RCD procedures (including through alignment with the EU trade mark reform). This option involves in particular updating the requirements for representing designs, deleting the ‘unity of class’ requirement for multiple design applications, and aligning RCD proceedings with EU trade mark proceedings.
The following option with sub-options was considered for resolving the problem of sub-optimal RCD fees and tackling the objective of making RCD protection more affordable:
Option 3: Lower RCD registration fee and easier multiple applications. This option requires the removal of the ‘unity of class’ requirement for multiple applications and the adjustment of payable fee amounts. To ensure equal treatment of applicants with smaller and larger filing volumes, adjusting the payable fee amounts also involves introducing a flat fee per additional design and thus abolishing bulk discounts granted at different levels dependent on the number of designs contained in a multiple application.
To counterbalance these benefits at filing stage, the above measure is coupled with an increase in subsequent renewal fees. This model allows easier access to RCD protection, in particular for SMEs (cheaper acquisition of the right and first renewal), while at the same time ensuring that only those RCDs utilised in the market place remain on the register, by progressively increasing subsequent renewal fees for second, third and fourth renewals.
In both sub-options 3.1 and 3.2, the headline fee for obtaining a single RCD would be reduced from EUR 350 to EUR 250. And then for each additional design forming part of a multiple application, the fee would be EUR 125 17 under sub-option 3.1, and EUR 100 under sub-option 3.2.
- first renewal – EUR 70;
- second renewal – EUR 140;
- third renewal – EUR 280;
- fourth renewal EUR 560 18 .
For this sub-option, the sum of fees for the first two renewals are equivalent to those under the current fee level, that is EUR 210 in total 19 .
In contrast, under sub-option 3.2 all renewal fees would be higher than under the current system.
The adjustment of fees would in any case be coupled with a simplification of the fee structure by abolishing the publication fee and adding this fee to the registration fee. To align RCD rules with those for the EU trade mark, the transfer fee for RCDs would be abolished.
The benefits of the fee reduction would primarily go to users of the RCD system. Businesses would get more value for money and would not pay more for the EUIPO services than is strictly necessary. This would enable SMEs and individual designers in particular to limit their costs and to compete with larger firms under more advantageous conditions. This would benefit consumers and, ultimately, society as a whole.
To make RCD protection more accessible and affordable for businesses and keep abreast of technological advancement, Option 2 on simplification and streamlining of procedures combined with Sub-option 3.1 on fees (which does not entail an excessive, disproportionate increase in renewal fees compared to Sup-option 3.2), promises to generate positive impacts and clear benefits for businesses, in particular SMEs and individual designers.
• Regulatory fitness and simplification
This proposal and the parallel proposal for recasting Directive 98/71/EC was included in Annex II of the 2022 Commission work programme 20 - therefore they are part of the regulatory fitness programme (REFIT).
This proposal aims to align the RCD protection system in the EU with the digital age and make it more accessible and efficient for applicants. In terms of digitalisation, the proposed update of the requirements for representing designs would allow applicants to reproduce their designs in a clear and precise manner using generally available technology. This would facilitate in particular the filing of new digital design types.
The detailed overhaul of the representation requirements (which is to follow under the required new secondary legislation to be enacted) would be greatly beneficial for both applying businesses and the EUIPO, as it would significantly reduce the potential for deficiencies and increase legal certainty.
In terms of simplification, the proposed abandonment of the ‘unit-of-class’ requirement would allow businesses to file (more) multiple design applications by combining several designs in one application without being restricted to products of the same nature. In addition, the proposed adjustment and simplification of the RCD fee schedule would reduce administrative burdens (in particular by abolishing the publication fee and introducing a flat fee per additional design filed within a multiple application) and make registration easier and more transparent for RCD applicants.
Relevant cost savings are specified and summarised in Table 8.1 of the impact assessment.
• Fundamental rights
The initiative would improve the possibilities for designers to protect their rights, bringing a positive impact on fundamental rights such as the right to property and the right to an effective remedy. To make the design protection system in the EU more balanced, it also aims to provide for a more robust catalogue of limitations on design rights, taking account of fairness- and competition-based considerations.
Contents
- BUDGETARY IMPLICATIONS
- Specifically, the present initiative to amend the Regulation is driven by the following objectives:
- In the impact assessment the Commission considered two main problems:
- The following option with sub-options was considered for resolving the problem of sub-optimal RCD fees and tackling the objective of making RCD protection more affordable:
- The fees for renewals under sub-option 3.1 are as follows:
- - Update of terminology and provisions on EUIPO governance
- - Provisions on EUIPO governance (Title XI)
- - Definition of design and product (Article 3)
- - Object of protection (Article 18a)
- - Scope of rights conferred by a registered design (Article 19)
- - Limitation of the rights conferred (Article 20)
- - Repair clause (Article 20a)
- - Design notice (Article 26a)
- - Principle of cumulation (Article 96(2))
- - Requirements of design representation (Articles 36 and 36a)
- - Multiple applications (Article 37)
- - Alignment with EU trade mark proceedings
- - Payable fees (Annex I)
- - Alignment with Articles 290 and 291 TFEU
This proposal would not have an impact on the European Union budget and is therefore not accompanied by the financial statement provided for under Article 35 of the Financial Regulation (EU, Euratom) 2018/1046 of the European Parliament and of the Council of 18 July 2018 on the financial rules applicable to the general budget of the Union and repealing Regulation (EU, Euratom) No 966/2012.
5. OTHER ELEMENTS
• Implementation plans and monitoring, evaluation and reporting arrangements
The Commission will use EUIPO annual reports and statistics to monitor in particular the evolution of design filings at the EUIPO, the usage of design protection by SMEs (based on future statistical disaggregation) and changes in (i) the number of multiple applications (ii) the number of designs with renewed protection and (iii) the number of renewals.
The monitoring activities would take into account the required implementation period (including to enact the necessary new secondary legislation based on the delegated and implementing powers to be conferred to the Commission) as well as sufficient time for market participants to adapt to the new situation.
A set of pertinent indicators as referred to in Section 9 of the impact assessment would be considered for evaluating the changes. Such evaluation would be done five years after full implementation of all the required changes, including at the level of secondary legislation to supplement and implement the provisions of Regulation (EC) No 6/2002.
• Detailed explanation of the specific provisions in the proposal
For the sake of consistency, and following the entry into force of the Lisbon Treaty, the use of the term “Community” is obsolete. Therefore, the terminology used in Regulation (EC) No 6/2002 is aligned to both the Lisbon Treaty and Regulation (EU) 2017/1001 on the EU trade mark. Henceforth, registered Community designs or RCDs will be known as registered EU designs (REUDs).
As the main provisions on governance of the EUIPO were amended in Regulation (EU) 2017/1001, the supplementary provisions contained in Regulation (EC) No 6/2002 are adapted accordingly.
The definitions are updated, clarified and broadened with the purpose of (i) making the proposal for a Regulation future-proof in the light of technological advancement and (ii) providing greater legal certainty and transparency as to the eligible subject matter of design protection.
In particular, in response to the advent of new technological designs which are not embodied in physical products, it is proposed to update and broaden the product notion so as to better cover and distinguish those products visualised in a graphic, embodied in a physical object or apparent from the spatial arrangement of items to form an interior environment.
For greater legal certainty in relation to the ‘visibility requirement’, a specific provision is proposed to be added whereby design protection is conferred only on those features of appearance, which are shown visibly in the application for registration.
To enable design right holders to more effectively address the challenges brought by the increased deployment of 3D printing technologies, it is proposed to adjust the scope of design rights accordingly.
In addition, following the EU trade mark reform, it is considered important for the effective fight against ever increasing counterfeiting activities to also add to the legal framework on RCDs a corresponding provision, permitting right holders to prevent counterfeit products transiting through EU territory or being placed in another customs situation without being released for free circulation there.
To ensure a better balance of legitimate interests involved and taking account of the case law of the Court of Justice of the European Union (CJEU) 21 , it is proposed to complement the list of permissible uses by adding ‘referential use’ and ‘critique and parody’.
In line with the insertion of a repair clause into the Directive, the transitional repair clause currently contained in Article 110 of Regulation (EC) No 6/2002 is proposed to be converted into a permanent provision.
For the sake of consistency with the repair clause inserted into the Directive and in view of the case law of the CJEU 22 , it is proposed to explicitly restrict the scope of application of the repair clause to component parts whose appearance is dependent on the appearance of the complex product concerned.
In addition, it should be made explicit that the repair clause can be used as a defence against infringement claims only if consumers are duly informed of the origin of the product to be used for repairing the complex product.
A design notice is made available to holders of registered EU designs, permitting them to inform the public that the design has been registered.
The principle of cumulation of design and copyright protection is maintained, while taking account of the fact that, since the original legislation was adopted, harmonisation has progressed in the copyright area.
The proposed amendment to Article 36(1)(c) of Regulation (EC) No 6/2002 intends to ensure that the representation of the design allows all the details of the subject-matter for which protection is sought to be clearly distinguished and published, regardless of the means of representation used. Given the negligible number of specimens filed, it is further proposed to abolish the option of filing a specimen instead of a representation of the design.
The aim of the proposed new Article 36a is to empower the Commission to specify the details to be contained in the application for a registered EU design, including the updating of the standards of design representation to be fit for the digital age (see also above under regulatory fitness and simplification).
It is proposed to abolish the so-called ‘unity of class’ requirement so that applicants are able to combine several designs in one multiple application without being limited to products of the same Locarno Class and with the possibility of benefiting from a bulk discount.
Several amendments are proposed to make RCD proceedings more efficient while ensuring consistency with the EU trade mark regime. Such amendments include (i) the abandonment of the option to file an RCD application through one of the central industrial property offices of the Member States or the Benelux IP Office, (ii) the introduction of the option to apply for the continuation of proceedings or the revocation of a decision by the EUIPO, and (iii) the extension of the rules on professional representation to cover the whole European Economic Area.
Given the essential importance of the amounts of RCD fees for the overall functioning of the design protection system in the EU and its complementary relationship as regards national design protection systems, and for the sake of consistency with Regulation (EU) 2017/1001 on the EU trade mark, both the amounts of RCD fees and the rules on payment currently laid down in Commission Regulation (EC) No 2246/2002 (the Fees Regulation) are proposed to be integrated into Regulation (EC) No 6/2002. The Fees Regulation will therefore become obsolete and is proposed to be repealed.
Compared to the amount of RCD fees currently set out in the Fees Regulation, it is further proposed to reduce the level of the application fee, which together with the abolition of the ‘unity of class’ requirement for multiple applications, shall make access to registered EU design protection more affordable, in particular, for SMEs and individual designers, which tend to file fewer design applications than larger firms.
In addition, it is proposed to simplify the schedule of RCD fees (such as by merging the registration fee with the publication fee to become a single application fee) to further increase the accessibility, transparency and user-friendliness of the system for companies and designers applying for registered EU design protection.
The Regulation confers powers on the Commission to adopt certain rules. Those rules are currently provided in (i) Commission Regulation (EC) No 2245/2002 of 21 October 2002 implementing Council Regulation (EC) No 6/2002 on Community designs and (ii) Commission Regulation (EC) No 2246/2002 of 16 December 2002 on the fees payable to the Office for Harmonisation in the Internal Market.
As this has not been done yet, it is necessary to align the powers conferred on the Commission under the Regulation with Articles 290 and 291 TFEU. The proposal therefore intends to insert a number of specific new empowerments for the Commission to adopt delegated and implementing acts.