Court rules against asthetic design registration of car parts

Genesis Analytics was commissioned to provide expert economic advice and assistance for Grandmark International, an importer of motor vehicle components.

The assignment related to Grandmark’s sale of certain imported replacement body parts for BMW vehicles. BMW objected to the company’s sale of four replacement parts for which BMW has registered designs, including the headlight assembly and bonnet of a particular model.

It also objected to Grandmark’s use of a particular trademark. Key to the assessment were the competition law considerations relevant to intellectual property disputes, an area in which Genesis was able to offer its knowledge and experience.

Genesis' analysis indicated that Grandmark's provision of these products was legitimate on competition grounds and any restrictions were potentially anti-competitive. This related to the use of both warranties and aesthetic design registrations to prevent competition in the market for replacement parts.

In a landmark ruling in September 2013, the Supreme Court of Appeal upheld a previous High Court decision in favour of Grandmark. The court found, based on its interpretation of the Designs Act, that BMW could not use aesthetic design registration to prevent the use of replacement parts sourced from other manufacturers, including Grandmark.

In light of the above, both courts found it unnecessary to rule on the competition aspects of the case and therefore no findings were made by either court concerning whether the registration and/or enforcement of aesthetic designs by BMW were or are anti-competitive.