2020/12/09 – 5 Tdo 1231/2020 (summary)

Resolution of the Supreme Court of 9 December 2020, Ref. No. 5 Tdo 1231/2020
(Regulation (EC) No. 6/2002, Community designs, “repair” clause)

The case concerns the accused who was allegedly offering for sale and then selling wheel discs imitations of various car brands produced according to the protected industrial designs. He was equally accused of offering for sale and then selling non-original center caps with imitations of trade mark of several car companies. According to the court of first instance in Třebíč, the accused thus breached the relevant provisions of the Law No. 441/2003 Coll., on Tade Marks, and Law No. 207/2000 Coll., on the Protection of Industrial Designs. It found the accused guilty of the offence of infringement of the rights to trade mark as well as of the offence of infringement of protected industrial rights according to the Criminal Code. It imposed the accused the cumulative punishment of forfeiture of possessed items. The judgment was then confirmed by the Regional Court in Brno.

Within the extraordinary appeal, the Supreme Court dismissed the decisions of the lower courts and their line of reasoning. The Supreme Court stated that the factual findings in the court of first instance judgment were completely insufficient and that the description of the act did not allow to conclude that the elements of a criminal offence were met. According to the Supreme Court, every decision rendered in the present case, including the resolution to commence the prosecution, contained an error consisting in the absence of the identification of the intangible legal assets, i.e. the industrial rights and trade marks, which were allegedly infringed by the action of the accused.

Regarding the interference with the rights to an industrial design, the authorities did not establish a particular industrial right which the accused interfered with and thus, it was not established whether it concerned the industrial right protected on national, European or international level. Since the authorities have not reached an unambiguous conclusion in this regard, it could not then be transmitted into the description of the act in any of the decisions rendered so far in the criminal proceedings. The Supreme Court incurred from the court file that the accused predominantly interfered with the industrial designs of the European Union registered at EUIPO. They were therefore protected primarily by the Regulation No. 6/2002 on Community Designs, with the applicable provisions being Art. 19 (1) and Art. 110 (1) of the Regulation. The latter provision contains the so-called “repair clause” intended to liberalise the trade with spare parts of complex product for the purpose of its repair, especially in the automotive industry. The Supreme Court noted that if it was to be found that the accused was in fact selling the discs covered by the European Union legislation concerning community designs, it was necessary to assess with due consideration as to what extent did he breach the EU Law, and particularly Art. 110 of the Regulation. Even if the accused did not fulfil the requirements stipulated in Art. 110, it was necessary to assess the fault of the accused in relation to the interference with this provision, particularly whether the accused acted intentionally. According to the Supreme Court, it was apparent that the accused could not know, at the time of committing the criminal offence reproached to him, how would the Court of Justice of the EU interpret Art. 110 of the Regulation since the relevant case-law did not exist at that time. The Supreme Court stressed that the accused had fulfilled even several conditions flowing from the subsequent case-law of the Court of Justice (see C-435/16 and C-397/16), e.g. obligation to inform the clients that he does not sell the original part.

The Supreme Court then noted that the lower courts committed the same errors with regards to the selling of non-original center caps with imitations of car companies´ trade marks. It was not established in what particular way the accused interfered by his own action with the rights to a particular trademark and whether the applicable legal framework should be national, European or international. At the same time, the Supreme Court refused the argumentation of the accused who claimed that in order to differentiate the spare parts, it was necessary to place on the discs the center caps with the European Union trade mark. According to the Supreme Court, the accused did not have the right, without the consent of the producer, to use a logo of car manufacturers on the center caps. The Supreme Court stressed that also with respect to the trade marks, it is necessary to assess the fault of the accused and notably whether his action was intentional.

The Supreme Court concluded that the errors contaminated the criminal prosecution of the accused already from its commencement. Due to those errors, the condemnation of the accused could not be upheld and the errors had to be rectified already within the pre-trial proceedings.