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German Court rules on Porsche design

The silhouette and outer appearance of the first Porsche is world famous. Up until today, we see the charismatic shaping mirrored in the current model series. It has been a remarkable and uncomparable success story ever since the first chief designer Erwin Komenda and his team worked out the initial Porsche design. Lately, Komenda’s heiress has taken the position that she should continuously participate in the revenues the car manufacturer generates with its current model series. Her reasoning is that – as mentioned above – the genuine shaping shines through.

The Regional Court of Stuttgart had to deal with the case. Komenda’s heiress based her motion on the so-called “bestseller” paragraph as set out in Sec. 32a of the German Copyright Act [Urheberrechtsgesetz – UrhG]. This provision allows for additional fairness compensation in cases where the author’s initial remuneration has proven to be inappropriate compared to the overall revenue generated with the work. However, the judges in Stuttgart denied the heiress such compensation (judgment of 26 July 2018, Ref. 17 O 1324/17, press release). In the court’s view, the current Porsche model series represent a free use within the meaning of Sec. 24(1) UrhG not triggering a right for additional compensation.

Facts

The plaintiff, Ingrid Steineck, is the daughter of the former Porsche chief designer Erwin Komenda. Until his death in 1966, Komenda worked for Porsche’s predecessor company. Among other things, he was involved in the development of the outer shaping of the famous chassis of Porsche’s 356 and 911. For his work, he received the ordinary salary of a chief design engineer in those days.

According to Ms. Steineck, the current model series, to a large extent, adopts and reflects her father’s original bodywork. Therefore, she sued for payment of the aforementioned fairness compensation. According to Sec. 32a(1) UrhG, the author – or his heirs – is entitled to such equitable on-top participation if the agreed remuneration must be considered “conspicuously disproportionate to the proceeds and benefits derived from the use of the work“.

This type of motion has been put forward on various occasions lately. For instance, in December 2017 the Higher Regional Court of Munich, based on the “bestseller” paragraph, granted the chief cameraman of the famous German movie “Das Boot” from 1981, an equitable on-top participation amounting to € 588,000 (cf. our German blog post). In the present case, the plaintiff aimed for substantially more than half a million Euros. She claimed an additional compensation up to € 20 million.

Decision

As a preliminary remark, it must be noted that it is common ground that the design of a car may be considered a work enjoying copyright protection. The fact that this is primarily a utility object does not preclude an act of genuine and original creation which is the precondition for copyright protection under German law (see the judgment of the German Federal Supreme Court, 13 November 2013 – Ref.: I ZR 143/12 – Geburtstagszug).

However, Sec. 32a UrhG requires the plaintiff to prove “the agreed remuneration being conspicuously disproportionate to the proceeds and benefits derived from the use of the work“. The court, however, reached the conclusion that the current model series Porsche is manufacturing and selling, though giving hints to the original shaping of Porsche 356 and 911, still differs considerably from the first Porsche design. The judges therefore hold that today’s shaping forms a free use of the original work. Reference is made to Sec. 24 UrhG which allows for the use without the need to obtain a license from the original author. Such “free” use is to be distinguished from mere adaptations and transformations within the meaning of Sec. 23 UrhG. Those may be published or exploited only with the consent of the author.

The Regional Court of Stuttgart also emphasizes that the shaping of the first Porsches and therefore the copyright work at issue in this case is of rather narrow scope. Even rather moderate modifications may lead to the user stepping outside of the scope of protection. Accordingly, the judges dismiss the claim. What is worth noting is the fact that, due to the court’s line of argument, it had not to decide who actually owns the copyright to the first Porsche design (which would have been an interesting decision to reflect upon).

Conclusion

It is not yet clear whether the case will go up to the second instance. However, the current judgment shows that reliance on the “bestseller” paragraph is not borderless. First, it is the work itself or a reproduction thereof that must be the basis of exploitation and revenue. Only if this is the case one may turn to the question of whether or not there is a conspicuous imbalance between the author’s initial remuneration and the profit made. In the case of the chief cameraman of “Das Boot” this matter was obvious. In the Porsche case, not so much.

At the end of the day, we note that not everyone who participated in the design of a successful vehicle or even series of vehicles is entitled to gain a share in the later profit once the design has become a “classic”. The Regional Court of Stuttgart made quite a statement here. This can also be applied to other car manufacturers and today’s general fondness of retro-designed cars.