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The New UE “Designs Package”: The Art of Enhancing the Value of Intangible Assets
The new UE “Designs Package”: how can a company enhance the value of its intangible assets?
Companies’ intangible assets have become decisive competitive assets.
When referring to “intangible assets”, one generally thinks of goodwill, trade marks, patents and digital data.
Designs, however, are often regarded as secondary.
That is an economic, legal and strategic mistake.
Under French law, the French Intellectual Property Code defines designs as follows:
“The appearance of a product, or part of a product, may be protected as a design, where it is characterised in particular by its lines, contours, colours, shape, texture or materials. These characteristics may be those of the product itself or of its ornamentation.
A product means any industrial or handicraft item, including parts intended to be assembled into a complex product, packaging, get-up, graphic symbols and typographic typefaces, with the exception of computer programs.”
Like patents and trade marks, designs are industrial property rights, provided that they are duly registered with the INPI for France, the EUIPO for the European Union, or WIPO for international protection outside the European Union.
Since they protect the appearance of products, designs are highly competitive assets. Their strategic value for businesses means that they should be properly protected.
Yet in 2024, France registered only 5,300 designs, and Switzerland only 650.
The “Designs Package”, introduced by two legal instruments — Directive (EU) 2024/2823 for national laws, including France, and Regulation (EU) 2024/2822 for the European Union — encourages companies to enhance the value of these intangible assets by simplifying their registration and adapting the regime to new technologies, while also strengthening their legal protection.
The new rules may be summarised as follows.
A. New rules for obtaining protection
An expanded definition of designs
Protection is no longer limited to the shape, contours, colours and texture of a product. It now also extends to animations, movement and dynamic transitions.
In addition, protection may cover non-physical forms of products, such as graphic user interfaces.
Simplification of filing and creation of multi-class applications
In order to take account of creations generated or presented through new technologies, the representation of the product may now take a static, dynamic or animated form, using any appropriate means, such as sketches, photographs, videos or 3D modelling.
Furthermore, whereas previous applications had to be limited to a single class under the Locarno Classification, the Designs Package now allows several designs belonging to different classes to be included in a single application, up to a limit of 50.
This offers companies significantly greater flexibility in the management of their intellectual property portfolios.
Simplification of costs and payment arrangements
The costs of multi-class filings have been reduced, and a one-month payment period is now granted. This simplifies the administrative and financial management of applications.
Companies may also request deferment of publication for up to 30 months. Failing such a request, publication will take place automatically at the end of that period.
A new development: automatic vesting of rights in the employer
This means that where an employee creates a design in the course of his or her duties, the company automatically becomes the owner of the rights.
This automatic vesting of rights in the employer may, however, be subject to two limits:
First, it may be derogated from by an internal agreement, for example in the employment contract.
Secondly, certain national laws may strictly prohibit such automatic vesting.
B. Strengthening of the rights of the holder
The right to prohibit
The Designs Package allows the holder of the right to prohibit the downloading and distribution of files intended for 3D printing.
The right to intercept
The holder of protection may now prevent counterfeit goods from entering the territory of the European Union, even where those goods are merely in transit and are neither manufactured in, nor intended to be marketed within, the European Union.
A new right to bring invalidity proceedings
A new right has been introduced allowing invalidity proceedings to be brought directly before industrial property offices, in France before the INPI.
A presumption of validity
In infringement proceedings, the Designs Package introduces a presumption of validity in favour of the registered design.
As a result, it will be for the party challenging the right to prove that the registered design is invalid.
A new symbol indicating design registration
A new marking symbol may be used to indicate that a design is registered.
This marking is intended to be informative, but it also has the practical advantage of deterring potential infringers.
Caution: the Designs Package creates new rights, but also new exceptions
Although protection has been strengthened, certain acts of reproduction are now permitted where their purpose is to identify a product or to refer to it as originating from the holder of the design.
Comparative advertising or the marketing of comparable products may therefore refer to a protected design in order to inform consumers.
Similarly, acts carried out for the purposes of comment, criticism or parody are permitted.
These exceptions remain subject to compliance with honest commercial practices and must not cause excessive prejudice to the normal exploitation of the design.
Finally, the Designs Package introduces an exception to the monopoly of rights holders in relation to spare parts intended to restore the appearance of a complex product.
Conclusion
By creating new and strengthened rights while simplifying the administrative process for registration, the legislator has also introduced new complexities into an already sophisticated area of intellectual and industrial property law.
Business leaders should therefore exercise caution and seek advice from specialist advisers when protecting and enhancing the value of their intangible assets.
The WEST AVOCATS team remains at your disposal.
Thierry Ygouf de Varese
French & Swiss Attorney at Law
www.west-avocats.fr
Sources:
- Bull Sent CJUE
- BRDA
- RG UE
