How grand is Grandmark? - SCA's spare part decision in RSA – Part 2

How grand is Grandmark? - SCA's spare part decision in RSA – Part 2

By Darren Olivier   Friday, September 27, 2013   No comments:

This is the second post by guest blogger Jeremy Speres on the Grandmark decision. In this post he considers whether Grandmark is a death knell for aesthetic designs for spare parts and summarises the trade mark aspect of the decision which is important as not all trade mark use is infringing use, it seems.

"This writer would have liked to have seen the court grapple more with the arguments for and against aesthetic design registrations for spare parts, as neatly put by Lodewyk Cilliers here.  The arguments raised by Mr Cilliers are supported by Dr Mikhalien du Bois and Prof. Visser, who go on to raise three other issues arising from the High Court decision in an excellent academic article in the SA Mercantile Law Journal.

 ed - Aesthetic Body Parts

In the High Court, BMW had attempted to argue that their designs were only partly functional and included aesthetic elements that entitled them to registration as aesthetic designs.  The High Court rejected this argument, in part because BMW had not distinguished between the specific functional and aesthetic features of its designs.  One gets the feeling that both courts could not have so easily dismissed BMW’s argument in this regard if BMW had adopted a more specific definitive statement for its designs.  BMW had adopted the so called “omnibus” definitive statement in terms of which the applicant for a design simply lays claim to the shape/configuration/ornamentation/pattern as shown in the representations/drawings accompanying the design application.  That is, no specific features are claimed.  Definitive statements have been likened to claims in a patent specification and are used to determine whether the design meets the novelty, originality and other inherent  requirements, as well as the scope of protection (see Burrells referenced above).  Perhaps a more specific definitive statement, carefully identifying the aesthetic features that are claimed by the applicant, presents a potential way for Original Equipment Manufacturers (OEMs) such as BMW to obtain some limited form of protection in their spare parts designs.  However, even if faced with a more specific definitive statement, it is difficult to see a later court overcoming the SCA’s reasoning that spare parts are intended to serve the sole purpose of replacing the original parts and are therefore wholly functional and unregistrable as aesthetic designs.

On appeal, BMW persisted with its claim of trade mark infringement, although interestingly it only relied upon one of the five registered marks it originally relied upon before the High Court – specifically the BM mark.  The appeal court adopted the same approach it followed in the SWARTLAND decision in determining whether the mark was used “as a trade mark” or “badge of origin”.  That is, the court looked to the context in which the mark was used (on the packaging of Grandmark’s components) in making this assessment, finding that a customer would not view the trade mark in isolation.  The court held that because the articles in question bore numbering and lettering surrounding the BM mark, and one article contained the wording GORDON AUTO BODY PARTS CO.LTD, the trade mark could not be said to be used as a badge of origin, but was instead used to identify the component concerned (and not the source of the component).

Grandmark is already billing their victory as a win for consumers (and their insurance companies) – see here.  BMW has, so far, been quiet – hopefully they aren’t too busy computing price increases necessitated by this judgement!" 

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

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

By Darren Olivier   Wednesday, September 25, 2013   No comments:

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."

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