EC Design Protection: A Case of Sub-optimal Tailoring?

The paper spends some time arguing that the pervasive underutilization of the EC design protection regimes by the European fashion industry is evidence of the benefits associated with a low-IP environment. On the question of why the design protection mechanisms in the E.C. and the U.K. haven’t seemingly been resorted to with any great frequency, a few points might be worth considering.

The first is that, in the U.K. at least, the interplay between four regimes – (i) the Registered Designs Act, 1949 (implementing the community registered design), (ii) s. 51 of the CDPA, (iii) unregistered design protection (Part III of the CDPA) and (iv) community unregistered design protection – has resulted in a considerable amount of confusion over the contours of each regime and the extent to which they remain complementary/overlapping/exclusive. It is then plausible to argue that the over-saturation of rights in this area coupled with the complexity involved in working them is to a large extent responsible for their under-utilization (a quasi anticommons situation – where the under-utilization isn’t of the resource, but of the rights).

Another possible (and indeed more likely) reason why the fashion industry hasn’t been making recourse to these mechanisms may derive from the threshold requirements of each of the regimes. The registered and unregistered design regulations of the E.C. (1998 and 2002) both require that to qualify for protection, a design must be “new” and possess “individual character”. The former is identical in many respects to the patent law requirement of novelty, but the latter requires showing that the “overall impression produced” by the design on an individual user differs from that produced by past designs. To qualify under the U.K.’s unregistered design laws, the design needs to be “original” and non-commonplace. The non-commonplace requirement, though less onerous than a novelty one, nevertheless mandates a review of overall market trends.

By all accounts it seems like the creative process in the fashion industry is largely incremental (2nd Circuit in 1940: “too slight a modification”). If this is case, then it remains more than likely that the real reason for the fashion industry not using design rights in the EC/UK is its inability to meet the requirements of the regime – most of which (at least in relation to unregistered protection) are determined during an actual litigation. Given that none of the design regimes was tailored specifically to the fashion industry (in the way say, semiconductor topography protection is) – it might be argued that a more nuanced regime would actually be of greater utility.

I’m a little hesitant about the lessons that can be drawn from the difference in regimes – without a detailed comparative industry performance study. Unlike the case of the database right, there doesn’t appear to be a disparity between fashion industry revenues on both sides of the Atlantic. Having existed for ages in a no-IP environment (for designs), isn’t it possible that the (European) fashion industry simply found the complex regime of designs grossly inadequate? If this were indeed the case, I’d be inclined to argue that a better-tailored industry-specific right might generate far more interest.

Just a thought, ludicrous as it might sound, but would an INS v. AP –type protection be more useful: (i) involving an anti-free riding right (as opposed to an open-ended in rem right), (ii) restricted to copying, and (iii) determined circumstantially ex post as opposed to ex ante. Obsolescence was key in INS and it certainly seems to be of importance (even if artificial/purposeful) in the fashion industry.

Comments

[James Grimmelmann]

I would expect that an environment of uncertainty would lead to over-enforcement rather than under-enforcement. It costs a design house much less to risk (ineffectively) asserting a questionable right than for a competing house to run the risk of successfully being sued for infringing the questionable right. And as for multiple overlapping uncertain rights, so much the better--the odds of winning on at least theory only go up if you get more chances to roll the dice.

So I would think one would need some additional factor besides just uncertainty--industry norms, perhaps, or the piracy paradox--to explain why the EC has seen underenforcement of the design laws on the books.