Wednesday, 25 September 2013

How grand is Grandmark? - SCA's spare part decision in RSA

This is the first in a two post commentary by guest blogger Jeremy Speres of Floor Swart on the Supreme Court of Appeal decision in BMW v Grandmark which was delivered last week. This post deals deals with the alleged design infringement by BMW. The second post provides further commentary, addressing whether this decision does actually spell the end of spare part protection under design law in South Africa, as well as dealing with trade mark aspects of the decision.

S14(6)-are those teeth sharp ?
"Two members of the statutory committee appointed to review the predecessor to the current Designs Act once decried the current Act as follows: “the Act is rather like a camel…in the humorous sense of a camel being a horse designed by a committee” (as quoted in Burrells South African Patent and Design Law, citing Prof. Coenraad Visser in turn).

The parties in the long-running BMW v Grandmark dispute are all too familiar with the camel-esque nature of parts of the Designs Act.  Prof. Roshana Kelbrick previously summarised the facts and the findings of the High Court in a sterling piece on this blog here.  After BMW appealed the matter to the Supreme Court of Appeal, it was the turn of the Bloemfontein court to attempt to smooth the camel’s back. 

Alas, for those readers who had hoped for some clarity as to the scope of section 14(6) of the Designs Act, the appeal court expressly declined to consider it (see para 7).  Despite this, the appeal court did however concur with the High Court in a manner that will make it very difficult for spare parts to be protected through the Designs Act in future.  Section 14(6) can be read here.

Prior to the High Court decision, the general thinking was that section 14(6) prevents the protection of spare parts as registered functional designs, but that they could possibly be protected as aesthetic designs (provided the Act’s other requirements are met) as a result of the legislature not expressly including aesthetic designs within the ambit of the section 14(6) exclusion.  However, as Prof. Wim Alberts and Sara-Jane Pluke (the latter successfully represented Grandmark before both courts) have pointed out in an erudite piece in Without Prejudice (September 2012), the High Court effectively adopted an approach that extended the section 14(6) exclusion to aesthetic designs as well.  This was a result of the court’s finding that spare parts are, by their nature, wholly functional (their sole purpose being to replace other parts), and are therefore not registrable as aesthetic designs.  The appeal court concurred (see para 13).

On appeal BMW raised the argument that its spare parts are not wholly functional but incorporate elements that “appeal to and are judged solely by the eye”, entitling them to registration as aesthetic designs.  In this regard, BMW argued that because the designs of its vehicles as wholes qualify for aesthetic design protection, it follows that their constituent components must too.  The court dealt with this swiftly, stating that the component designs must be judged on their individual qualities, independently of the vehicle as a whole.  They are not selected because they appeal to the eye, but solely for the function they perform – to restore the vehicle to its original form (see paras 12 – 13).

Cheetah beater
To counter such reasoning, BMW submitted that an owner of one of its vehicles may conceivably choose to replace an original component with a component of a different design in order to modify the appearance of the vehicle, indicating that components do in fact have aesthetic qualities.   The appeal court however reversed that submission and found that it had to consider BMW’s components as covered by their registered designs and not the modified components of others instead.  In the words of the court, “Perhaps there are eccentric motorists to whom it might appeal to fit a BMW fender, for example, to a vehicle of a different kind – though it is difficult to imagine one – but the designs are not to be judged by their appeal to eccentricity.”  It is at this point in the judgement that one gets the distinct impression that we won’t be seeing Nugent JA (who wrote the unanimous judgement) driving around with a giant tail wing anytime soon…

Accordingly, the appeal court agreed with the High Court and held that BMW’s aesthetic designs were purely functional and fell to be revoked."

No comments: