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Wednesday, September 28, 2005

News from EU Designs Directive.

On September 14, 2004, the EU Commission had published a

Proposal for a Directive of the European Parliament and of the Council amending Directive 98/71/EC on the legal protection of designs. The European Commission had chosen to propose to give consumers more choice and value when they buy visible replacement vehicle parts, such as bonnets, bumpers, doors, lamps, rear protection panels, windscreens and wings. The proposal would amend the legal protection of designs Directive (98/71) by removing Member States option to maintain design protection for such items. The proposal would allow independent part manufacturers not linked to the producers of finished vehicles - to compete throughout the EU market for visible replacement parts, potentially worth some EUR 10 billion annually. The Commission estimated that these parts are 6-10 % more expensive in Member States where they are subject to design protection. Non-visible parts, like engine or mechanical parts, are not concerned by the proposal. Neither are components in new vehicles.

On July 17, 2005, the

Opinion of the Committee on Economic and Monetary Affairs for the Committee on Legal Affairs on the proposal for a European Parliament and Council directive amending Directive 98/71/EC on the legal protection of designs (COM(2004)0582 – C6-0119/2004 – 2004/0203(COD)) (Draftsman: Wolf Klinz) was finalised.

Mr. Klinz wrote:

"[...] Your rapporteur wishes to express his strong support for the Commission's Proposal. It is not satisfactory that we have a single market for new cars but no single market for spare parts.

A liberalisation of the secondary market of spare parts will lead to more competition and push the development of the internal market. The prices will become more elastic. Innovation is not negatively affected. In fact it might be increased since VM will tend to design the parts of their products in such a way that independent suppliers will find it difficult to manufacture these spare parts. Your rapporteur supports the claim for intellectual property, but in our opinion it is no obstacle for a liberalisation of this market. In addition, it is remarkable that there is only one single case where a VM sued another VM for the copying of design in the primary market, even if some models greatly resemble each other. SMEs will benefit from the liberalisation. The liberalisation will have positive effects on the employment in the EU and finally the individual consumer will be able to have the freedom of choice and should be able to accept the responsibility for that choice.

A liberalisation of the secondary market of spare parts is the right way forward. [...]"

This report has not been adopted unanimously. In particular,

Mr. Karsten Friedrich Hoppenstedt seems to have

favoured a tougher wording:

"[...] (1a) Whereas the abolition of design protection is contrary to internationally recognised intellectual property principles and would set a dangerous precedent as regards protection of intellectual property rights in other sectors; whereas this would be the case even though the European Union has promised, in particular within the WTO, to use its influence to ensure that the intellectual property protection arrangements accepted in third countries will put an end to counterfeiting and forgery;

[...]

(3a) Design protection is a lawful right granted to manufacturers of spare parts for complex products to compensate them for their innovation efforts.

[...]

(3d) Whereas to abolish design protection outright would benefit neither consumers nor European SMEs and SMI;

[...]

(3e) Whereas to abolish design protection would be contrary to the Lisbon strategy, the aim of which is to foster the Union's capacity for innovation and for research and development;

[...]

1. Protection as a design shall apply for a period of ten years for a design which constitutes a component part of a complex product used within the meaning of Article 12(1) of this Directive, for the purpose of the repair of that complex product so as to restore its original appearance.

[...]"

I am curious as to to learn of the result of a later plenary vote of the European Parliament to come.

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