Saving the European car industry by block exemption?

EurActiv.com reports on last week's summit meeting of ministers from the Member States to discuss national measures to help the car industry.  The Commission's spokesman cited the block exemption as one of the possibilities for helping the industry, in addition to the various types of financial support available from other sources.

I took the view right from the start of the block exemption project, in 1980 when the first drafts started to circulate, that competition law was perhaps the only instrument of industrial policy available to the Commission.  The block exemption could be used to achieve a great deal more than just regulating dealer agreements, and of course since then the scope of the regulation has increased to cover spare parts manufacture and disclosure of technical information.

But its effectiveness as an instrument of industrial policy will surely be attenuated if - as is the current general drift of Commission thinking - it is reduced to something much smaller and less ambitious.  Removing dealer protection (or "flanking") provisions will deprive the block exemption of a lot of its effectiveness.  Even if the abuses currently singled out for special attention in the Regulation can still be dealt with under general competition law principles, that's a slow and inefficient way to handle the matter.

On the other hand, what could be written into a new block exemption that might help save the industry?

Car design protection in China

Not directly to do with the Block Exemption, but worth passing on: my friend Paul Jones tells of a design case in China between Fiat and Great Wall Motor Company. Fiat claimed that Great Wall's Peri infringed its design patent protecting the appearance of its Panda model.  The two cars can be seen here and here.

Last year an Italian court upheld a similar claim, but Fiat have had less success in the Chinese courts, with a decision of the Hebei Province Higher People’s Court going against it.  As the report of the judgment is in Chinese, I will defer to Paul's formidable language skills and quote his report:

The test for infringement of a design patent in China is very similar to the test in the United States. In the U.S.  as a result of the decision in Egyptian Goddess (Comment and link to decision: http://thettablog.blogspot.com/2008/09/design-patent-owners-will-worship-cafcs.html) the test is that of the eye of the ordinary observer giving such attention as a purchaser usually gives the two designs are substantially the same, such that the resemblance is such to deceive such an observer, inducing the observer to one product supposing it to be the other ( see a Congressional Research Service paper on the topic at p. 16: http://assets.opencrs.com/rpts/RL34559_20080701.pdf) .

In China a design patent registration does not require the submission of claims, but only of pictures. To obtain its design patent Fiat submitted four pictures – front, left right and rear. To support their contention of infringement they commissioned a market research firm to interview people outside supermarkets, stadiums and other public places in Beijing, Shanghai, Guangzhou and Chengdu. The interviewers showed the people a display board with pictures of each of the two car models. They also had their Beijing lawyers purchase a Great Wall car to obtain access to the design parameters.



Both the Intermediate and the Higher Court rejected the survey. The Higher Court pointed out that no attempt was made to focus on potential car-buyers, who would pay much more attention to determining the origin of the car that they might buy. The participants in the survey were simply members of the general public. The court also said that looking at pictures was not the same a s looking at a three dimensional car.


Further the court noted that motor vehicles have been developing for over a hundred years and are being continuously refined and improved. The holder of  a design patent cannot stop others from improving on existing technology. Design patents protect only the unique aspects of the car design, in this case as shown in the side views, but average consumer of motor vehicles would be more  interested in the vehicles size, shape and technical parameters than in just the elements protected by the design patent. Thus differences in the design of the front of the car should thus also be considered. The test for infringement is whether the designs are the same or similar to the average purchaser. The court decided that in this case the car designs were not.