Bayerische Motoren Werke Aktiengesellschaft (BMW) v Round And Metal Ltd & Anor

Factual and Procedural Background

The Plaintiff is the registered proprietor of several Community Registered Designs and Community Trade Marks relating to alloy wheels for motor cars, specifically for BMW and MINI cars. The First Defendant ("Company A") imports and sells replica alloy wheels replicating the Plaintiff's designs. The Plaintiff claims that Company A has infringed its Community Registered Designs and Community Trade Marks, and also alleges passing off. Company A denies these claims and raises counterclaims related to the detention of a consignment of alloy wheels by the UK Border Agency and a letter before action sent by the Plaintiff's solicitors. The Second Defendant ("Defendant") is jointly liable for any infringements attributed to Company A.

The Plaintiff called two witnesses who provided evidence largely supportive of its claims, while the Defendants' sole witness's evidence was treated with caution due to inaccuracies. The dispute principally revolves around the correct interpretation of Article 110(1) of the Council Regulation 6/2002/EC on Community designs ("the Community Designs Regulation").

Legal Issues Presented

1. Does Article 110(1) exclude certain design features from protection or act as a defence against infringement claims, affecting the burden of proof?
2. Does Article 110(1) apply only where the design of the component part is dependent on the appearance of the complex product?
3. What is the meaning of "used for the purpose of the repair of that complex product" within Article 110(1)?
4. What is the scope of "so as to restore its original appearance" in Article 110(1)?

Arguments of the Parties

Defendants' Arguments

• Article 110(1) operates as an exclusion from protection, meaning the burden lies on the Plaintiff to show the right applies.
• The wording of Article 110(1) and recital (13) indicates protection is excluded for certain designs.
• There is a clear distinction between Article 110(1) and Article 20, with the latter creating defences and the former excluding rights.
• The legislative history supports their interpretation.
• Commentaries by Copinger & James and Sykes support their view, though opposing views exist.
• Article 110(1) applies regardless of whether the design is dependent on the complex product's appearance.
• The test for "used for repair" is based on intrinsic properties and suitability, not on actual usage.
• "Original appearance" includes appearances resulting from upgrades by previous owners.
• Later Commission proposals are not admissible aids for interpreting the Regulation.
• Article 110(1) is a permitted exception under TRIPS Article 25(1), not requiring broader justification.
• They submit that the interpretation of Article 110(1) should be referred to the Court of Justice of the European Union (CJEU).

Plaintiff's Arguments

• Article 110(1) operates as a defence, placing the burden on the Defendants to establish its applicability.
• The wording of Article 110(1) and recital (13) indicates that registration is not prevented, only enforcement in certain circumstances.
• There is no material difference between Article 110(1) and Article 20.
• The legislative history supports their interpretation.
• Commentaries by Laddie, Prescott and Vitoria, and Musker support their view.
• Case law from Community Design Courts in Italy and Spain supports that the burden lies on the Defendants.
• Article 110(1) applies only where the design of the component part is dependent on the appearance of the complex product.
• The test for "used for repair" is objective and focuses on the normal use of the component part.
• "Original appearance" means the appearance as supplied by the manufacturer or authorised dealer, excluding subsequent upgrades.
• The interpretation of Article 110(1) is sufficiently clear not to require a reference to the CJEU.
• Article 110(1) should be interpreted consistently with recital (13), the Designs Directive, and TRIPS obligations.

Table of Precedents Cited

Court's Reasoning and Analysis

The court undertook a detailed analysis of Article 110(1) of the Community Designs Regulation, considering its wording, legislative history, related provisions, and relevant case law. It concluded that Article 110(1) does not exclude registration of designs but operates as a defence limiting enforcement rights in specific circumstances, placing the burden on the Defendants to prove applicability.

The court interpreted Article 110(1) in light of recital (13), holding that it applies only to component parts whose design is dependent on the appearance of the complex product. It found that alloy wheels are not dependent on the car's appearance because replacement with different designs is a realistic option, supported by marketing evidence showing multiple wheel designs for each model and the availability of retro-fit accessories.

Regarding the purpose of use, the court held the test is objective, focusing on the normal use of the component part. It found that the replica wheels sold by Company A are predominantly used for upgrading cars rather than repairing them, supported by evidence such as sales mostly in sets of four, the larger size of replica wheels compared to factory standard wheels, and the supply of logo stickers indicating upgrade intent.

The court also interpreted "original appearance" as the appearance when the complex product was first sold by the manufacturer or authorised dealer, excluding appearances resulting from later upgrades by previous owners.

The court considered the arguments on burden of proof, legislative history, international obligations under TRIPS, and relevant case law, ultimately finding the Plaintiff's interpretation more consistent and supported by the legislative intent and jurisprudence. It declined to refer the matter to the CJEU, finding the interpretation sufficiently clear.

On the Community Trade Marks claims, the court found infringement by Company A in relation to the supply of logo stickers and certain eBay listings. It rejected Defendants' arguments that use of the marks was not in relation to identical goods or that there was no likelihood of confusion. The court emphasized the likelihood of confusion among end users and subsequent purchasers, noting that Defendants did not take sufficient steps to prevent confusion.

The court found that defences under Articles 12(b), 12(c), and 13 of the CTM Regulation did not apply, as the use was not necessary to indicate intended purpose and was likely to cause confusion. It also declined to reach a conclusion on the passing off claim, given the finding of trade mark infringement and lack of full argument on passing off.

Finally, the court dismissed the Defendants' counterclaims, as these depended on the Plaintiff's failure which was not established.

Holding and Implications

The court held that Company A has infringed the Plaintiff's Community Registered Designs and Community Trade Marks, and that the Second Defendant is jointly liable for these infringements. The Defendants' counterclaims are dismissed.

The direct effect is that the Plaintiff's intellectual property rights in the Community Registered Designs and Trade Marks are upheld against the Defendants' importation and sale of replica alloy wheels and associated logo stickers. No broader legal precedent was established beyond the application of Article 110(1) as a defence, confirming its interpretation consistent with recital (13) and existing case law. The court's decision clarifies that replica wheels used primarily for upgrading do not fall within the scope of the repair exception under Article 110(1).