The Council of the EU finally endorsed a repair clause… which may never be applicable in practice
12/10/2023
On 25 September 2023, the Council of the EU adopted its General Approach on the revision of the Design Directive (“DD”, 2022/0392 COD) and the Design Regulation (“DR”, 2022/0391 COD). Member States agreed on the introduction of a new EU repair clause (Art. 19 DD, Art. 20a DR), in view of allowing consumers to choose among competing suppliers of spare parts when repairing their products, thus paving the way to a more accessible and affordable right to repair in Europe, ending unjustified spare part monopolies, creating jobs and growth in the circular economy, and improving consumer’s purchasing power. However, none of this may ever happen if the text remains unchanged.
An unbearable burden of proof will make the EU repair clause practically inapplicable
It is highly concerning to see that the Council has not clarified the burden of proof imposed on repair spare part providers when invoking the repair clause (Art. 19(1) DD, Art. 20a(1) DR). The European Commission’s proposal states that design protection shall not be conferred on a spare part used “for the sole purpose” of repair, yet without specifying the burden of proof for this condition. Current litigations in Germany show that in the absence of a more explicit wording, courts see the burden of proof on spare part providers, acting in quality of design users. However, it is impossible to provide this negative evidence, i.e. to prove that spare parts cannot be used for any other purpose than repairs.
The design legislation should provide sufficient legal certainty and predictability to the users of the EU repair clause, by explicitly specifying that the spare part is “designated for repair purposes according to the information on the product or accompanying material”. Such clarification will avoid unnecessary and costly litigations, thus ensuring the applicability of the EU repair clause in practice.
An excessively long transition period, delaying the achievement of a right to repair
As proposed by the European Commission, the Council has endorsed an excessively long and mandatory transition period on existing designs imposed to the Member States which do not have yet a national repair clause in place, which will exclude all existing products from the scope of the EU repair clause in those countries for 10 more years (Art. 19(3) DD).
This will reduce the purchasing power gain for consumers by more than 50 according to the European Commission’s impact assessment.[1] There is no technical or legal obstacle whatsoever to reduce this period, and “no broad economic justification” to maintain design protection on visible spare parts, as mentioned in the evaluation report.[2] The TRIPS International Agreement does not constrain the EU to maintain design protection on spare parts and already allows countries to adopt repair clauses.[3]
A 3-year transition period would provide sufficient time for Member States to apply the EU repair clause while transposing the new Design Directive into national law. Regardless of the agreed transition period, Member States should at least be allowed to apply the EU repair clause at an earlier date if they wish so. There is no reason to oblige them to maintain design protection on repair spare parts.
Necessary clarifications on the consumer information requirements
ECAR welcomes the clarification made by the Council to the consumer information requirements (Art. 19(2) DD, Art. 20a(2) DR), in which repair spare part providers must inform their consumers about the “commercial origin” of the product to be used for repair purposes. Yet still, the text would gain further clarity by referring to the “direct customer” of the repair spare part provider, as final consumers are rarely directly engaged with spare part producers in a commercial relationship (professional repairers often act as intermediaries).
The European Parliament is preparing compromise amendments that are expected for finalisation in the course of October 2023. ECAR calls on the trilogue negotiators to pay particular attention to the burden of proof imposed on repair spare part providers (Art. 19(1) DD, Art. 20a(1) DR) and to the transition period on existing designs (Art. 19(3) DD). Those two critical aspects are indispensable for the concrete applicability of the EU repair clause.
[1] Reduction of the annual saving gain for consumers down to 4 to 13 million EUR only (in a scenario where only new designs are covered by the repair clause during 10 years), instead of 340 to 544 million EUR (in a scenario where both new and existing designs are covered by the repair clause during 10 years), i.e. reduction by more than 50. Source: European Commission, Proposal for a Directive on the legal protection of design (recast), COM(2022) 667, summary of the impact assessment, p. 5.
[2] European Commission, Evaluation of EU legislation on design protection, SWD(2020) 264.
[3] Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), Article 26(2), foresees “limited exceptions to the protection of industrial designs (…), taking into account the legitimate interests of third parties.”