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BMW ‘astonished’ by ruling in trademark case

A SMALL importer and distributor of spare parts for vehicles has won a legal battle that spanned 13 years against BMW SA, one of the country’s largest motor manufacturers.

The Gauteng North High Court last week dismissed with costs the application brought by BMW that Grandmark International had been infringing on its design rights by importing and selling spare parts, including bonnets, headlight assemblies, grills and front fenders that had been fitted to BMW models.

Guy Kilfoil, BMW communications manager, said the company was “astonished” by the judgment.

“We are still analysing the decision but believed strongly that trademark laws are there for a reason and should be protected.”

Sara-Jane Pluke, legal representative of Grandmark International, said the decision was significant since many of the parts imported by the company could be bought for a quarter of the price charged by the original motor vehicle manufacturers such as BMW, Toyota and VW.

“Ultimately it is the consumer that pays the biggest penalty,” she said. Grandmark had also talked to the Competition Commission, but would not pursue the matter after receiving relief from the court.

Mr Kilfoil said BMW SA would study the judgment in full and decide on appropriate steps.

Judge Natvarial Ranchod said it was not clear what merited the monopoly right BMW sought to enforce about the design rights.

The court said the onus was on BMW to establish the scope of its monopoly, at least insofar as infringement of design was concerned. BMW failed to discharge that onus. Judge Ranchod said BMW’s failure to identify any novel aesthetic features of its design was in his view “fatal to its cause of action for design infringement”.

BMW did not state anywhere in its founding papers what the aesthetic features of the design rights were. “The relevant parts were spare parts, which if considered separately from the car as they must be, have in my view no features that will or may influence the choice or selection or have some individual characteristics which are calculated to attract the attention of the beholder.”

Grandmark attacked the designs in a counter-application to the infringement application by BMW, saying they were not aesthetic designs and they lacked novelty or originality. Grandmark said it was not attacking the overall design of the vehicle.

It was all about replacement parts for the vehicle, and Grandmark said the spare parts should be looked at in isolation and not as part of the overall design of the car. Judge Ranchod agreed with the argument.

The Design Act of 1993 distinguished between aesthetic and functional designs and the attempt by BMW to bypass that provision by registering the parts as aesthetic designs “fall to be revoked”, the judge found.

http://www.businessday.co.za/Articles/Content.aspx?id=177071

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