Rims Hit Regulation: Replica Rims and the Spare Part Exception

We all know that design is one of the key features that car manufacturers focus on to build their brands and develop a loyal customer base. This is particularly true of premium car brands.

Of course, the value of high-end design makes a tempting target for manufacturers and sellers for after-sales parts. This has brought them into conflict with car manufacturers who, naturally, want to protect their intellectual property.

This was the issue at the heart of a recent dispute between BMW and an importer and seller of replica rims.

Copies Cause a Tug of War

Replica RimsBMW has protected the design of its rims on the EU-level by registering them as Community Designs. When BMW became aware of the replica rims, BMW took action against them.

The importer of the replica rims argued that the rims were legal, because they were covered by Article 110(1) of the Community Designs Regulation known as the spare parts exception. This exception essentially states that the owner of a Community Design cannot prevent other parties from manufacturing and selling spare parts.

Given that the regulation is a political compromise that leaves the definition of what exactly is considered a spare part somewhat unclear, the ground was set for the dispute.

Replica Rims Are Not Spare Parts

The scope of the spare part exception has been contested throughout Europe over the past years in various proceedings, typically between car manufacturers and spare part producers or their retailers.

In this Finnish case, the key arguments revolved around a part of the wording of the exception that states that for the exception to apply, the part must be used ‘for the purpose of the repair of [a] complex product so as to restore its original appearance’. In this case, the complex product was a car.

The Helsinki District Court found that rims are not used to ‘restore the original appearance’ of a car, but to improve or modify it. This being the case, the replica rims were not considered spare parts and not protected by the exception.

Rims Alter, Nor Restore, a Car’s Appearance

In its reasoning, the Court compared rims to a front wing of a car. In the Court’s view, a spare part front wing must be identical with the one being replaced, but aluminium rims are used to give the car a different, typically more trendy, appearance.

From a legal perspective, the District Court followed the dominant approach in European case law, citing the recent ruling of the Danish Supreme Court from 10 March 2015 and the well-known decision of the UK High Court in BMW v Round and Metal from 2012 in support of its reasoning

More Certainty for Design Rights Holders

Even though the decision is in line with European case law, it remains precedent setting in Finland. Owners of Community Designs now have more certainty when seeking to intervene in the sale of replica rims in Finland.

If you’re interested in Community design rights, the spare part exception and perhaps EU trade mark law, you should have a look at the recent decision of the Court of Justice of the European Union (CJEU) in Ford Motor Company vs Wheeltrims Srl (C-500/14). In that case the CJEU, responding to a preliminary reference, held, some might say unsurprisingly, that the spare part exception under Article 110(1) does not provide a defence to an alleged trademark infringement.


Full disclaimer: we acted for BMW in the dispute.

Sakari Salonen
Kim Parviainen

Start-ups, Batten Down Your IP!

It’s the beginning of one of the most anticipated weeks of the year, Slush week. Slush is now the Finnish business event of the year, having come a long way from a small underground event to one of the biggest tech and entrepreneur events in the Europe only in eight years.

No matter what exactly your start-up is doing, intellectual property (IP) is going to be relevant at some point. In the rush of getting your company going and putting your idea on the map, it can be easy to forget to protect the results of your work. That can be a costly, maybe even fatal, mistake.

Protect Your Trademarks

Trademarks are the cornerstone of brand building and add value to your company, but only if they’re properly protected. Registering a trademark is fairly easy and the fees won’t break the bank, but all too often start-ups don’t think to do it early enough.

By not registering your trademarks in time, you’re leaving yourself wide open to competitors who will be able to take advantage of the recognition and brand you’ve worked to build. On the other hand, it’s also crucial to make sure that your company isn’t violating anyone else’s trademarks. If you think getting your trademarks organised is a hassle, just wait till you’re in the middle of an expensive trademark dispute that could put your business on hold for months or, at worst, kill it.

Make Sure Your IPs Are Really Yours

The second issue that the start-ups too easily forget is that the IPs are not automatically transferred from your sub-contractors or employees and managers to the company. A start-up should early on put together a scheme for transferring IPs to the company itself and implement the scheme through separate agreements.

slush_blogState clearly and unambiguously in your sub-contracting, employee, management and shareholder agreements that the title to IP is transferred to the company. Licensing or buying the rights later on may turn out to be costly and difficult.

If you’re an investor, it’s not a bad idea to check that transfer clauses have actually been included in the company’s agreements and that the target company is the true IP proprietor.

Patent, Patent, Patent

Naturally, patents play a bigger role in some fields than others, but you should always check whether your innovations and products are patentable. What you need to remember is not to publicly disclose your invention before you apply for patents or utility models. Patents will help your start-up operate more freely without having to fear information leaks, and will give to you tools to act against product copying. What you also need to check is that your products or services do not infringe the rights of third parties. Patented innovations often also tend to increase the value of a company.

The better your start-up has protected its IP, the more value it will have, because the most valuable assets start-ups typically have are IP rights. A well-managed IP portfolio will also attract investments by reducing risks and is a signal of professionalism and quality—characteristics that will help your start-up gain the eye of investors  in a competitive field of other eager newcomers.

Have a great Slush week, and don’t forget to batten down you IP!

Sakari Salonen
Jaakko Lindgren