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Rarely to date have the Courts had to decide on European plagiarism of the IP rights of Chinese manufacturers, especially when the alleged infringement is not in China but in the European market. In this case, a Hong Kong-based domestic appliance manufacturer based in Hong Kong noticed similar products on the German market, and brought a German civil case against the German commercial coffee firm who was selling the products, claiming infringement of unregistered Community Design rights. In ZR 126/06, a decision that will have importance to any non-European company, the German Supreme Court clarified the situation of a design first disclosed outside the EU: no valid protection exists.

In ZR 126/06 (Decision of the Federal Supreme Courts of Justice, 9.10.2008), a domestic appliance manufacturer based in Hong Kong (the claimant) had registered its design for a pastry press in China and, upon noticing similar products on the German market, the claimant brought a case before the German courts against the German commercial coffee firm who was selling the products.

The Unregistered Community Design right (UCD), as the name suggests, exists without registration in accordance with Art.s 11 and 110a(5) of the Community Design Regulation (CDR) for three years from the date of public disclosure.
Until now, the question of the consequences of a first publication of a design outside of the EC had been unclear since the wording of Art. 11 CDR does not explicitly require that the first disclosure take place within the EU. This was the question facing the German Federal Supreme Court.

The claimant argued that the publication of their registered Chinese design was observable within the EC, thereby forming a basis for a non-registered community design right. However, both the Hamburg District Court (OLG) and the German Federal Supreme Court (BGH) rejected this argument and found that, in order for such a right to exist, the first act of disclosure must transpire within the territory of the EC.

In reaching its decision, the Supreme Court relied on Art. 110a, added in the EU enlargement Treaties of 2004 and 2007, which clearly states that Unregistered Community Design rights cannot be based on prior disclosures outside the EU. On this basis the BGH determined that the first disclosure for a Design must transpire in the EC in order to attract valid protection.

Protection for a non-registered community design right arises in accordance with Art. 11, 110a CDR only if the design right is made publicly accessible for the first time in the territory of the community; a disclosure outside the Community is not sufficient to fulfil the requirements of Art. 11 CDR, even if made known to professional circles of the relevant commercial sector within the Community.
Acts of disclosure by the rights holder outside of the Community are prejudicial to novelty according to Art 7 CDR, if the design could be known to professional circles of the relevant commercial sector, active within the Community, during their everyday business.

As to unfair competition, the notoriety of the copied product usually necessary for a danger of deception regarding the product’s origin to occur must be present in the domestic market - regardless of the entitlement to equal treatment for residents of a given state and other member states of the Paris Convention according to Art. 1 II, Art. 2 I - the sole notoriety of a copied product abroad does not as a matter of principle suffice.

This decision clarifies the territorial effect of such non-registered rights offered within the EU, unhelpfully for those who first disclose outside its borders (and these are predominantly non-European companies). Other treaties have contained provisions limiting protection to where the first publication is in a Treaty country, but any country disadvantaged by that has only to accede to the treaty to avoid the problem – Europe, however, is a club which China can never join.

Although the German Supreme Court’s views must be given considerable weight, this decision is not binding on courts of other EU countries or on the European Court of Justice, which will have the final say. We hope that they find occasion to give their own views sooner rather than later.