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Auch! Audi’s infringement claims come to a screeching halt in the Court of Appeal.

Introduction

On June 22, 2022 Borgarting Lagmannsrett (The Court of Appeal) passed judgement in the case between Audi AG (Audi) and Starco AS (Starco). The case relates to Audis design registered rims, and whether Starco infringed on Audis rights by importing and selling the rim Angel, made by G.M.P. Group S.r.l. (GMP).

Audi registered their rim design on October 17, 2019 (reg. no. DM/203217). The rim is custom made for Audi’s cars, especially Audi R6S Avant, but also fits other models, such as the Audi e-tron. The design development started in 2016. GMP later developed the rim Angel, which fits on multiple Audi models. GMP registered the Angel design in the EU on august 27. 2020 (reg. no. DM/212217). Both designs have five spokes and a fan or trapeze shaped design.

In the district court Audi lost on all counts and is here the appealing party. Audi demands that Starco stops their marketing and sales of the rim Angel, that they destroy the rims they have on hand and that they compensate them for damages. In the interim between the case before the District Court and the Court of Appeal, the case regarding the EUIPO design registration of the rim Angel has been resolved. Audi claimed that the design was an infringement on their previous design, and succeeded in their arguments before the EUIPO, resulting in the EU registration of Angel being declared invalid.

The Norwegian Design Act

The Court of Appeal starts by assessing whether the design Angel gives the informed user a different overall impression than Audis registered rim design. The informed user has knowledge of the different rim designs, and their knowledge is more detailed and greater in scope then the average consumer, but the informed user is no expert. The assessment must be based on how the designs appear in the registration, but with regards to how the design would look in actual use. The assessment is a global assessment, where one has to pay attention to the design as a whole, rather than identifying and listing all the differences that may be present.

During the global assessment the informed user will direct its attention to the areas where the designer is not hampered by the technical demands present and will rather focus on areas where the designer has ample room to implement its design. Applied to rims, the rim needs to be round, adjusted to standard tires and be applicable to said tires. The Court of Appeal states that rims are a type of fashion product and expresses, with reference to older Norwegian judgements and theory, that this leads such products to enjoy a smaller sphere of protection than products that are not fashion products.

More important to the court’s assessment was the fact that there is a high saturation of designs in this design space. This has imposed de facto limitations on the designer’s options when designing the product. In this case, Starco’s representatives referenced the almost 20. 000 unique rim designs that were registered, where multiples resembled Audi’s designs, and that Audi alone held the rights to 300 active rim designs. With so many registered designs for rims, the distance new applicants needed to maintain from older designs was reduced.

Furthermore, Audis rim design only represented adaptations of previously known designs, which according to legal theory would reduce the scope of protection compared to actual innovative designs.

Both designs were also deemed to comprise parts of a larger trend for rim designs, where the rims took a fan-like shape. This would make the informed user more attentive to subtler differences between the designs.

During the assessment, the Court of Appeal points to the differences in angles, cavities and that the lighter colored line close to the wheel arch is slimmer. In the Court’s opinion this marks a large enough difference between the two designs. When assessing how the two designs will appear in use, the Court of Appeal points out that Audi’s rim appears airier when compared to Angel, and that it curves towards the nave. In total the difference between the deigns was sufficient as to not make Angel an infringement on the registered design.

The Norwegian Marketing Act

The Norwegian Marketing Act Section 30 sets out rules for protecting commercial entities from imitations. For the Norwegian Marketing Act section 30 to take effect, certain conditions must be met. It has to be use of another entities “work” in a way, and under such circumstances that it would be a “unreasonable exploitation of another’s effort” and it must constitute a “danger of confusion”.

The Court of Appeal starts by evaluating whether there is a “danger of confusion”, stating that it is imperative that the overall impression gained from the alleged copy matches that of the alleged original.  When performing this evaluation, the Court of Appeal bases its evaluation upon the assessment done in relation to the design registrations. They put weight to the point that the designs were both parts of a general trend present in the market, and as such there was no actual copying involved in the development of the design Angel. The Court of Appeal puts weight to the fact that GMP had not used Audis logo in their marketing of the rims, and instead had printed GMP on both the products and the packaging. Weight was also given to the fact that the Angel rims costs less than the rims form Audi, as well as the previously noticeable differences in the designs.

In an obiter statement, the court notices that there was no unreasonable exploitation of Audi’s efforts in that the customer gains knowledge that the rims will fit on Audi’s cars. This remained true when Starco offered a so-called “rim-configurator” on their website, where the customer could view the rims on different cars, among them Audi’s.

Comment

The judgement clarifies the relationship between the rules governing imitation protection in the Norwegian Marketing Act section 30 and the protection granted by the Norwegian Design Act when it re-utilizes large parts of one assessment in the next. The Court of Appeal still highlights the differences in the assessments, where consideration can be given to pricing and use of trademarks in the imitation assessment. The judgement also highlights the meaning of a saturated design space in the assessment of a designer’s freedom.

We at Acapo are uncertain as to why there is put weight to the fact that a product is a fashion product, and in this regard, we also would like to see a better use of legal sources from the Court of Appeal. The cited case law in Rt-1959-533 related to a type of window handles, which, in our opinion, is not a fashion product. Furthermore, the Supreme Court states that one has to consider the esthetic needs of the era when considering the freedom of the designer. This, as the Court of Appeal also points out, is not current law. In T-153/08 paragraph 58, the Court states explicitly that consideration is not to be given to the expectations the public may hold to a given product or type of product. In our opinion there is no legal basis to state that fashion products in general should enjoy less protection, apart from the fact that a trend can lead to a saturation in a given design space.

We’ll keep you posted here at Acapo.no if there is an appeal. This would be a great opportunity for the Supreme Court to handle a design case, as there is real need of clarification on whether fashion products enjoy less protection.

Read the judgement here: https://lovdata.no/avgjorelse/lb-2021-140047

 

For Acapo

 

Sjur Sølsnes

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