EU Community Design Right: must a design be first disclosed in the EU?

With Brexit looming, this lurking issue has come sharply into focus after a reference to the CJEU from the English Intellectual Property Enterprise Court (IPEC).

The all-important questions are these:

• For a design to qualify for unregistered design right (UCD), must its first public disclosure take place within the EU?
• Or is it also sufficient for the first disclosure to happen outside the EU, if members of the trade within the EU would have known about it?

There have been divergent views on this for some time, in particular following the German Supreme Court finding in favour of the former interpretation in the case Gebackpresse II back in 2008. Until now, there has surprisingly not been a reference on it to the CJEU.

Now we have such a reference from IPEC in the case Beverly Hills Teddy Bear Company v PMS International [2019] EWHC 2419:

• On the facts, the first disclosure of some designs took place at a trade show in Hong Kong. It was common ground that the designs would have become known at the time to trade circles within the EU.
• The main question referred to the CJEU is whether, to qualify for UCD, the first disclosure of a design must take place "within the geographical confines of the Community".
• If the answer to that question is Yes, then the claimant's designs would not qualify for UCD on the basis that, by the time that the designs came to be publicly available in the EU, they would be invalid (for lack of novelty) because of the earlier disclosure in Hong Kong.

This issue is of crucial importance for many international businesses, the fashion sector being a prime example. Depending on the outcome, and assuming Brexit goes ahead, it would create a strong incentive for a fashion house to showcase its designs for the first time at a show in Paris or Milan, rather than London.

Having said that, doing so could then lead to not qualifying for UK design right protection. Even if the UK and EU were to reach a reciprocal arrangement, this would still not solve the problem for a business from another country outside the EU.

If the CJEU gives a judgment which follows the Gebackpresse II case, one practical solution may be for a business to try to create simultaneous disclosure in more than one territory. Another may be for to rely more heavily on design registrations though the costs of doing so for a large number of designs will be an obvious factor.

Assuming that the CJEU is willing to make a ruling post-Brexit on a reference from an English Court, the decision it makes will have a vital impact on a strong form of cost-effective IP protection on which many creative businesses have come to rely.