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The EU’s “Fortress Europe” approach to merit a change of practice for designers relying on these rights for protection in both jurisdictions.
EU Design law provides that any new design which has individual character will benefit from an automatic design right that protects against copying. The right, known as Unregistered Community Design Right (UCD), lasts for a period of three years from the date the design is first made available to the public (disclosed) within the Community (EU). UCD protects both shape and surface decoration, and thus the whole or part of a product. It is a very useful form of protection that is relied upon by those whose designs can be short lived such that registration tends not to be economically viable, particularly the fashion industry. The UK will introduce an equivalent right, to be called Supplementary Unregistered Design right (SUD), on exit day (1 January 2021). The SUD will be identical to the UCD except that it will apply only to the UK and will arise when the design is first made available to the public in the UK (plus Hong Kong, New Zealand and some UK dependent territories).
There has been some uncertainty in UK circles as to the interpretation of what “first made available to the public in the Community” actually means and which is key to establishing whether UCD (or in due course SUD) will arise or not. The prevailing European view, which includes the EU IPO, is that there needs to be first disclosure in the geographical territory of the EU to give rise to UCD. An alternative view is that a disclosure anywhere will suffice, provided that in the normal course of business the disclosure could reasonably have become known to the circles specialised in the sector concerned, operating within the EU. According to this view, a well-publicised disclosure outside of the EU (say for example at New York Fashion Week, or in due course London Fashion Week) will still give rise to a UCD, given that it will likely have become known amongst fashion circles in the EU as well. The question has been referred by the English Courts to the Court of Justice of the European Union (CJEU) for a preliminary ruling in Beverly Hills Teddy Bear Company vs PMS International Group plc  EWHC 2419 (IPEC), though it is not clear if the CJEU will adjudicate on this before the end of the transition period (or at all).
In negotiations for a post-Brexit Free Trade Agreement (FTA) with the EU, the UK government has been pushing for an agreed interpretation that disclosure in either the EU or UK will give rise to both UCD and SUD rights, and/or that disclosure anywhere will suffice, if the disclosure has become known in the circles specialised in the sector concerned, operating in the UK or EU. It has recently (early October 2020) become clear that the UK government’s desired interpretation is to be rejected by the EU, who will continue to favour the prevailing European view that only a disclosure in the geographical territory of the EU will give rise to UCD. The UK government has indicated they will follow suit; only first disclosure in the physical territory of the UK (plus Hong Kong, New Zealand and some UK dependent territories) will give rise to the equivalent SUD right.
This outcome presents a real practical problem for those who regularly rely on these short lived rights to protect their new designs in the EU and UK. If there is first disclosure in the UK (for example, at London Fashion Week), the wider automatic protection of a UCD will be lost, whilst the UK disclosure may still be enough to prevent the rights owner from obtaining a valid Registered Community Design, unless an application for it is filed within the one year grace period from first disclosure. The converse applies to those who first disclose in the EU, for example at Paris Fashion Week. A possible solution to this conundrum could be to arrange simultaneous disclosure events in the UK and EU, though it will be some time before this is tested in court. Until such a practice has become the industry norm and has been tested in court (or the CJEU settle the question in a preliminary ruling in favour of the alternative view set out above), the safest option will be to register designs in the territory where there is no first disclosure, so as to ensure the design has some protection in that jurisdiction going forward. Rights owners will need to be vigilant to ensure applications to register their designs are filed during the one year grace period from first disclosure, or risk a loss of all rights in that territory through a loss of novelty in that design as a result of the disclosure in the “other” territory.
For more information on the impact of Brexit on designs, see our Brexit page here.