BMW prevails over Estonian company in replica rims dispute
The Tallinn Circuit Court upheld an action filed by Bayerische Motoren Werke Aktiengesellschaft (BMW) against Estonian company Kostar Plus OÜ (Decision 2-18-3770), requesting Kostar to cease the infringement of BMW’s registered Community designs (RCDs) – namely, to refrain from importing, distributing, possessing and storing the infringing rims. The defendant filed a cassation appeal with the Supreme Court of Estonia, but the court refused to accept it (Supreme Court’s regulation of 8 August 2022).
Defendant’s arguments
Kostar responded to BMW’s claim by arguing that it was selling the rims as sets. The original rims cost significantly more than the defendant’s replica rims – one original rim may cost more than a whole set of replica rims. Therefore, economically-minded customers who wished to restore the appearance of their cars would choose a set of replica rims instead of one original rim (especially when the other rims were worn due to weather conditions).
Kostar also pointed out that the court’s reasoning contradicted the 18 March 2020 judgment of the Supreme Court in Daimler v Kostar Plus, in which the Supreme Court stated that differences in dimensions do not exclude the applicability of the repair clause. The defendant stated that, visually, the difference in dimensions of the replica rims was not perceptible in situations where the rim was a) slightly wider than the original rim and the wheel offset was slightly smaller, or b) slightly narrower and the wheel offset was slightly larger. The position of the rim in relation to the edge of the wheel arch was visually equivalent. Similarly, it was not visually different if the rim was one inch (2.5cm) higher or lower. By comparison, the difference of 19 inches (48.2cm) and 20 inches (50.8cm) was barely perceptible on the rim, and the visual impression of the rim was also affected by the tire mounted on the rim.
The defendant pointed out that the difference in diameter of 2.5cm did not affect the overall appearance of the wheel and car. The RCD protects the visual appearance of the rim and the registration does not protect exact dimensions.
Plaintiff’s arguments
BMW stated that the defendant had not provided the court with evidence that it sold the rims other than as sets. Further, it followed from the submitted evidence that the plaintiff’s original rims were not produced in the same dimensions as the rims imported by the defendant. The plaintiff stressed that the importance of deviations in dimensions had been clearly emphasised by the Court of Justice of the European Union. Therefore, replica rims of different sizes cannot be considered as spare parts, even if they are visually identical to the original rims, because the original parts with such dimensions are not made by the manufacturer/design owner. If one of the original rims breaks, it cannot be replaced with spare parts of non-standard dimensions. The fact that the rims at issue were not intended to repair the vehicle to restore its original appearance was also implicitly confirmed by the statement from the manufacturer of replica rims that the rims were manufactured for customers who wanted to upgrade their cars, not repair them.
The plaintiff also pointed out that the defendant had not fulfilled its duty of diligence at the time the action was filed. The marking “NOT OE” on the replica rims was insufficient to inform downstream users that the rims were intended only for repair purposes to restore the original appearance of a vehicle. Based on its previous sales practice, the defendant had not provided any example of how it had sold rims for the repair of specific BMW vehicles in order to restore their original appearance. In addition, the defendant had not shown that the obligation to provide information had also been complied with in respect of customers who did not contact the defendant via the website. As compliance with the duty of diligence was a mandatory pre-condition for the application of the repair clause, it was for the defendant to prove that it had complied with such duty in each sale situation. There was a risk that the plaintiff’s RCD rights would continue to be infringed in the future, since the infringement had already taken place and the defendant did not prove that it had fulfilled the duty of diligence. The plaintiff was thus of the opinion that the infringing rims should be destroyed, as the infringing nature of the rims could not be eliminated by other means.
Decision
The court noted that, if the defendant sells the rims only as sets, it was not in its interest to offer the rims for sale as spare parts; this indicated that the defendant wished to offer replica rims to upgrade vehicles or purely for convenience, which is not permitted use of a design under Article 110(1) of Regulation 6/2002 on Community designs.
The court agreed with the plaintiff that, since the repair clause applies to the “actual repair of the vehicle to restore its original appearance”, the fact that the plaintiff offers rims of different sizes for different models of vehicles was irrelevant. Only the dimensions of the original rims that were on the vehicle when it was placed on the market were relevant.
In conclusion, the court stated that the defendant should cease infringing BMW’s RCDs – namely, the court ordered that the defendant should:
- refrain from importing, distributing, possessing and storing the infringing rims in the future; and
- give a declaration of intention to the Tax and Customs Board for the destruction of the infringing rims at the defendant’s expense and replace the declaration of intention with the court judgment.
Anneli Kapp, Patendibüroo KÄOSAAR
This article first appeared in WTR Daily, part of World Trademark Review, in September/2022. For further information, please go to www.worldtrademarkreview.com.
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