South Africa Design Law

On 18 September 2013 the Supreme Court of Appeal handed down a decision in terms of South Africa Design law in the case of BMW v Grandmark.  The case dealt with a very important issue, namely if a vehicle manufacturer can use design registrations to stop third parties from importing and selling so-called “replacement parts”.  Replacement parts are parts that look like the originals, but are in fact made by unauthorised manufacturers.  It is well accepted that replacement parts are typically cheaper than original parts.  For this reason, this judgment has huge implications for the vehicle and replacement parts industries.

The South African Designs Act allows two types of design registrations, namely –

(i)             AESTHETIC designs – i.e. designs having features which appeal to and are judged solely by the eye, irrespective of the aesthetic quality thereof; and

(ii)            FUNCTIONAL designs – i.e. designs having features which are necessitated by the function which the article to which the design is applied is to perform.

In terms of the Act, a functional design cannot cover a spare part for a vehicle, machine or equipment.  There is no similar exclusion in respect of aesthetic designs.

The case was first heard in the North Gauteng High Court and it was subsequently ruled that BMW could not stop Grandmark from selling various replacement parts, because the design registrations were invalid.  There were four AESTHETIC design registrations involved, covering the following parts: a bonnet, a grill, a headlight assembly, and a front fender.  

The Appeal Court said that it was common cause that Grandmark was importing and selling parts that were “exact embodiments of the four designs”.  What it had to decide, however, was whether BMW’s four registrations were valid Aesthetic design registrations.  Grandmark claimed that the designs were invalid because they were functional in nature. Grandmark demanded that the registrations be cancelled, alternatively that the matter be referred to the Competition Tribunal.  Their argument was that to register designs, which are functional in nature, as Aesthetic designs (possibly to circumvent the spare parts exclusion) is an abuse.

The court looked at the major design law cases (there have been very few) to determine just what an Aesthetic design is.  In the South African case of Homecraft Steel Industries v SM Hare the court referred to the seminal British case of Amp v Utilux, where the court said this: “The phrases ‘appeal to’ and ‘judged solely by the eye’ denote features which will influence choice or selection… the feature must have some individual characteristic… it must be calculated to attract the attention of the beholder… there must be in some way a special, peculiar, distinctive or striking appearance – something which catches the eye and in this sense appeals to the eye.”  On the issue of whose eye is to be considered, the court in a later South African case of Swisstool Manufacturing Co v Omega Africa Plastics said that “While the eye is to be the eye of the court, the court should view the design through the spectacles of the customer”.  

This led the court in the BMW case to conclude as follows:  “What emerges from the analysis is, essentially, that aesthetic designs are those that invite customer selection – and customer discrimination between articles – solely by their visual appeal.”

The court was prepared to accept that BMW spends much time, money and expertise on designing the appearance of its vehicles. But it did not accept the argument that simply because a vehicle qualifies for registration as an Aesthetic design, so does its component parts.  The court said that the design of a component must be judged on its own qualities, independently of the design of the entire vehicle.  Vehicle components, said the court, “are not selected by customers for their appeal to the eye”. Rather, they are “selected for the function they perform – which is to replace a component so as to restore the vehicle to its original form.”  The court summarised it as follows: “The eye through which the design must be judged is that of the likely customer, who will choose it so as to maintain the form of the vehicle. Indeed it can be accepted from their nature that most customers will not even see the component before it is fitted to the vehicle, not make any selection at all, other than giving instructions for the restoration of the vehicle.”

So BMW’s AESTHETIC design registrations were invalid.

The implications of this judgement are that vehicle manufacturers can certainly not rely on FUNCTIONAL design registrations to stop the sale of replacement parts, because of the specific exclusion in the Designs Act. And they will now also find it very difficult to use AESTHETIC design registrations.  Some manufacturers may draw comfort from the fact that the court did make a point of saying that there are certain components (e.g. wing mirrors, wheels, seats and steering wheels) which are intended to be interchangeable between vehicles, and that some of these might be registrable as AETHETIC Designs. 

Copyright - R. Gunter Attorneys. Turning ideas into assets.
Design & Hosting by
Globex Internet Services