Belgium: Failure To Inform Court About Circumstances Giving Rise To Doubts Regarding Validity Of Design While Seeking Seizure Constitutes Fault Under Belgian Law

In a judgment of 28 February 2018, the Brussels Court of Appeal (the "Court") held that, by failing to inform it that specific circumstances could cast doubt on the validity of the right at stake, in casu a design right, while seeking seizures on that basis, the right holder committed a fault within the meaning of Article 1382 of the Civil Code, i.e., the general principle of tort liability.

The dispute arose between Devoted 2 Passion NV ("D2P"), a wholesaler active in the lighting sector, and Globall Concept BVBA ("Globall Concept"), a wholesaler active in the same sector, and Hubo Belgie NV ("Hubo"), a franchise organisation selling lighting products bought from Globall Concept directly to end-users.

In 2010, before the Brussels Commercial Court, D2P had claimed that Globall Concept and Hubo were infringing the Community design which it had registered on 10 January 2008 with the European Union Intellectual Property Office ("EUIPO").  The design concerned Christmas lights and Globall Concept and Hubo sold similar lights. Hence, D2P sought the seizure of the counterfeiting products. D2P's request was granted on 30 December 2010 and the contested goods were seized in January 2011. On 23 February 2011, Globall Concept started third party proceedings to challenge the decision of the Brussels Commercial Court of 30 December 2010. These proceedings were declared unfounded by a decision of 10 May 2011.

On 28 March 2011, D2P brought an action before the Brussels Commercial Court seeking a cease-and-desist order against Globall Concept and Hubo as they were still selling the products concerned. The proceedings were stayed on the grounds that Globall Concept had started an invalidity application relating to D2P's Community design before the EUIPO. EUIPO ruled on 21 January 2013 that the design was invalid for lack of individual character. Following this decision, in the resumed proceedings, Globall Concept and Hubo requested the release of the seized products and lodged a counterclaim against D2P for damages on the basis of Article 1369bis of the Judicial Code. This provision enables a defendant in seizure proceedings to claim compensation from the applicant for damages caused by a seizure that was later released.

At first instance, the Brussels Commercial Court dismissed D2P's claim and awarded damages to both Globall Concept and Hubo. D2P appealed to the Court. In its judgment of 28 February 2018, the Court noted that, contrary to what Globall Concept and Hubo had maintained, Article 1369bis of the Judicial Code does not provide for an objective liability, i.e., a liability not requiring a finding of fault or breach of a duty of care. Rather, D2P's liability in this respect should be assessed under the conditions laid down in Article 1382 of the Civil Code which requires the existence of a fault, a causal link and harm. An objective liability in such a situation would unduly discourage right holders to exercise their rights and to request seizures where an infringement is suspected, the Court reasoned.

The Court then examined whether D2P committed a fault within the meaning of Article 1382 of the Civil Code. In this respect, it noted that there was a presumption of validity for D2P's registered design and that the validity of the latter was only challenged by Globall Concept on 12 September 2011, i.e., after the seizures in question had been carried out. Nonetheless, the Court also underlined that D2P was aware since 2007, or at least should have been aware, of circumstances potentially undermining the validity of its design since its design had been disclosed in 2006, i.e., more than twelve months before its registration and therefore outside the "grace period". The Court therefore concluded that, by failing to inform the Court of those circumstances while seeking seizures on that basis, D2P committed a fault in the sense of Article 1382 of the Civil Code. The Court added that Globall Concept and Hubo had suffered harm and that the causal link between D2P's fault and this harm was established.

As a consequence, the Court rejected D2P's appeal and declared Globall Concept and Hubo's counterclaim for damages meritorious. Globall Concept was awarded EUR 161,349.06 while Hubo was awarded EUR 81,217.40.

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