England and Wales High Court (Patents Court) Decisions

IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
PATENTS COURT

		Royal Courts of Justice Strand, London, WC2A 2LL
		16 March 2005

Mr Peter Prescott QC:

1. On 17 February 2005 I delivered a judgment in this case on a preliminary point of law. It is accepted on all sides that it raises two important legal principles, the one on the constitutional law of the United Kingdom, the other on European law.
2. I have given permission to appeal on the first principle. At the request of the Secretary of State for Trade and Industry I have ordered her to be a party to the proceedings in order that she may appeal even if the other parties should settle their differences: see R v. Secretary of State for the Home Department, Ex Parte Salem [1999] 1 AC 450. I have indicated, and Mr David Pannick QC for the Secretary of State very properly accepts, that if that should happen it would be most desirable to appoint an amicus curiae (for example, Mr Pushpinder Saini) to argue the point on the other side, in view of its public importance. I have decided to refer the second principle to the European Court of Justice for a preliminary ruling under Article 234 of the Treaty.
3. The preliminary point of law I had to decide was whether a certain 12-month grace period applied in favour of Registered Design 2,059,677. Oakley had put the design into commercial use in the United Kingdom shortly before applying for that registration. According to the law we used to have in this country (Registered Designs Act 1949, as amended by Parliament in 1988) that would have sufficed to make the design registration invalid. And according to Regulation 12 of the Registered Design Regulations 2001, unless it is ultra vires, our old law on validity does indeed apply to registrations of that vintage. The question was whether Regulation 12 was ultra vires. If it was ultra vires the new law would apply instead, with the result that the grace period would work in Oakley's favour and save their registration^[1].
4. Thus the judgment concerned the relationship between the Registered Designs Act 1949 as amended by Parliament ("the 1949 Act"); Directive 98/71/EC of the European Parliament and Council of 13 October 1998 on the legal protection of designs ("the Directive"); and the Registered Designs Regulations 2001 ("the 2001 Regulations"). The Secretary of State had purported to make the 2001 Regulations pursuant to the powers of section 2(2) of the European Communities Act 1972.
5. I held that:-

(a) Section 2(2) of the European Communities Act 1972 empowered the Secretary of State to choose methods which were appropriate to bring about a substantive result that was required by the Directive, making regulations for that purpose. Those regulations could validly amend an Act of Parliament.

(b) But section 2(2) did not empower her to bring about a substantive result that was contrary to what was required by the Directive.

(c) Nor did it empower her to bring about a substantive result that was required neither by Parliament nor the Directive. That would be to exercise a significant policy choice, and would require primary legislation.

(d) Article 11.8 of the Directive contained a derogation. It permitted, but did not require, Member States to keep their old national law on the validity of existing design registrations.

(e) The 2001 Regulations were made on 8 December 2001 and came into force on the next day. This was a breach of the Directive. It was mandatory to transpose the Directive into national law no later than 28 October 2001, see Article 19.

(f) By Regulation 12 of the 2001 Regulations, the Secretary of State had purported to prescribe that the validity of certain existing design registrations should be governed by the 1949 Act.

(g) If Regulation 12 was valid it would mean that the grace period was not available in favour of Oakley's registered design, because the 1949 Act contained no such provision. But if Regulation 12 was invalid then the grace period would apply, because the "default" provision as required by the Directive would kick in. That is Article 6.2, see paragraph 53 of my main judgment.

(h) It was arguable that if Member States were to exercise that derogation at all, it had to be done by 28 October 2001 at the latest, since it was the purpose of the Directive to achieve harmonisation of national registered designs legislation as a matter of urgency, and it had to be done in a manner that was both transparent and legally certain.

(i) If that were so, Regulation 12, having been made after 28 October 2001, would be contrary to the Directive. Because the point was not acte claire it should be referred to the European Court of Justice for a ruling under Article 234 of the Treaty.

(j) If, on the other hand, it was competent for the United Kingdom to avail itself of the derogation by adopting a national measure to that end, even after 28 October 2001, the position would be as follows.

(k) Regulation 12 would be partly valid, and to that extent could be saved according to the doctrine of substantial severability, as follows.

(l) Although Regulation 12 of the 2001 Regulations did purport to adopt the derogation (and although that was to exercise a policy choice which properly belonged to Parliament) nevertheless it was valid, subject to what follows. It was valid because it coincided with what Parliament had done when it enacted and amended the 1949 Act. Put otherwise, Parliament had last spoken in 1949 and 1988, and nobody else had the power to decide otherwise unless mandated by European law.

(m) However, Regulation 12 was in one respect too wide, because it purported to apply to design registrations applied for after 28 October 2001. This was contrary to what had been required by the Directive. The Directive required that the validity of those registrations should be governed by the new law.

(n) It would be appropriate notionally to amend the defective part of this secondary legislation and apply it subject to the amendment. Thus Regulation 12 takes effect as if, instead of the words "before the coming into effect of these Regulations", there were substituted the words "before 28 October 2001".

(o) However, that would not save Oakley's registered design, because it was applied for before 28 October 2001.

6. The upshot is that Animal have succeeded on the preliminary point of law so far, unless the ECJ should rule in Oakley's favour on the point I have decided to refer for a preliminary ruling under Article 234.
7. Before me today there was some discussion as to what would happen if the ECJ did rule in Oakley's favour. I held that, if that were to happen, Oakley would win: the 12-month grace period would operate in their favour. I stated that would set forth my reasons in writing, and now do so.
8. Suppose the ECJ does rule that, after 28 October 2001, it became too late for any Member State to adopt a national measure which purported to avail itself of the derogation contained in Article 11.8 of the Directive. It would follow that it was not open to the United Kingdom to adopt, on 8 or 9 December 2001, a provision equivalent to Regulation 12. It would be contrary to Community law.
9. It would also follow that Regulation 12 would be ultra vires for that reason. In my judgment, whatever else section 2(2) of the European Communities Act 1972 may or may not empower the Secretary of State to do, it does not empower her to make regulations that purport to bring about a particular result that is forbidden by Community law. In this case that particular result would be: continuing to apply our old national law to the validity of registered designs by adopting a measure to that effect after it was too late to do so.
10. The remaining question is whether, in those circumstances, Regulation 12 would be severable according to our law. If severable, the rest^[2] of the 2001 Regulations would remain and would be valid. If not severable, the whole of the 2001 Regulations would be invalid.
11. In my judgment Regulation 12 would be severable. I refer the reader to paragraphs 143-147 of my main judgment, and draw particular attention to the last of those.
12. The substantial purpose of the Secretary of State in making the 2001 Regulations was to implement the Directive. That purpose could be achieved as a matter of substance even if Regulation 12 had to be struck out. On the hypothesis I am considering there would be no option to do otherwise. The United Kingdom, by exceeding the time limit prescribed by Article 19 of the Directive, would have lost the opportunity to avail itself of the derogation afforded by Article 11.8. Therefore it would have no option but to implement the rest of the Directive, without the derogation.
13. The alternative would be to hold that the 2001 Regulations were ultra vires in their entirety. I reject that. The result be contrary to Community law, for we would not have implemented the Directive at all. In my judgment we can be confident that any reasonable secondary legislator who somehow had foreknowledge of the ECJ's assumed ruling on 8 December 2001 would have made the 2001 Regulations without Regulation 12.

Note 1   Section 1B(6)(c) and (d) of the Registered Designs Act 1949 as substituted by the 2001 Regulations, and conforming to Article 6.2 of the Directive.    [Back]

Note 2   Except and to the extent that other particular Regulations suffered from the same vice, and had to receive the same treatment. See paragraph 175 of my main judgment.    [Back]