The collector-car world was recently stunned by the news that a Swedish court awarded judgment to Jaguar Land Rover (JLR) in its copyright infringement case against Karl and Ann-Christine Magnusson. The court ruled that the Magnussons, who were in the process of building a C-type replica, had violated JLR’s copyright in the C-type form. Their replica was ordered to be destroyed and the couple also face substantial damages and attorney fee liability.
Negative reaction was swift among Jaguar enthusiasts in Europe, with descriptions such as “Jaguar — the unacceptable face of capitalism,” and “Big business crushes Swedish couple.” The outcry prompted JLR to post an open letter “to the Jaguar community” explaining its position, excerpted here:
You may have seen a recent news story relating to a C-type replica which portrays Jaguar Cars negatively… We wanted to reassure our customers and loyal enthusiasts that most of this news release was misleading, conjecture or completely untrue. At Jaguar Land Rover we wholeheartedly value our communities’ continued support. Importantly, we want to allay any fears amongst the network of enthusiasts that Jaguar Land Rover might pursue individual owners of replica Jaguars and insist upon their destruction. This is not true. We will, however, take action to stop businesses using our Intellectual Property illegally for their own profit, as in this case… We have never, nor would we, take action against private owners of pre-existing individual replica vehicles, nor insist upon the destruction of their cars. In this case Jaguar Land Rover offered the defendants an opportunity to retain their completed replica for private use and enjoyment, however, this was declined, and the defendants chose to continue with their plans to make money from our copyright.
Who are they?
Karl Magnusson and his wife, Ann-Christine, are lifelong Jaguar enthusiasts; both worked as designers in the automotive industry prior to their retirement. The Magnussons claim that they were simply building a C-type replica in their home garage for their personal use and enjoyment, and dispute being engaged in a commercial venture.
JLR and the court disagreed, pointing to the presence of a second chassis and numerous additional parts as evidence that the Magnussons intended a commercial enterprise, manufacturing and selling at least two C-type replicas.
Perceptions of unfairness
The Magnussons expressed their feelings of betrayal. They point to a lengthy list of facts that demonstrate the unfairness of JLR’s position, including:
- They had numerous contacts with JLR from 2015-17 while they were building their replica, with interest in cooperation expressed.
- At least 1,500 replica C-types have been built globally in the past 45 years.
- Jaguar has a history of supporting the replica industry.
- At least three Jaguar CEOs have supplied close to 2,000 drawings to replica builders as well as given awards to replica builders.
- Jaguar senior management, past and present, have privately built and raced C-type replicas themselves.
- The Engineering Manager at JLR Classic, who testified as a witness in court, has a Suffolk C-type replica in his garage.
- The Jaguar Land Rover “Classic Drive” experience includes driving C-type and D-type replicas that were not built by JLR.
No case in the U.S.
The idea that a manufacturer could hold a copyright to the design of a car seems weird, so I consulted Bert Krages, my local go-to intellectual property lawyer. Krages was very informative and explained that JLR would not have much of a claim in the United States.
There are basically three approaches to protecting intellectual property rights in automobile body designs under U.S. law.
The first is the use of design patents. These patents protect the ornamental design of functional items, such as the shape of an automobile body or even the tread pattern of a tire. Design patents provide the strongest level of protection, but they expire 14 or 15 years after the patent was issued (depending on when the application was filed) and cannot be renewed.
The second approach is trade dress protection. Trade dress consists of the visual appearance of a product or its packaging that is sufficiently distinctive to be associated with a particular source of the product. It can apply to the overall appearance of a product but can also extend to parts of the appearance. A good example is BMW’s distinctive two-kidney grille design.
To be enforceable, trade dress must be associated in the minds of consumers with a specific source, and a reasonable risk must exist that consumers might be confused as to the source of the product. It is this “likelihood of confusion” element that places limits on how far trade dress protection can extend.
For example, a Porsche 911 with a green body and yellow wheels would not face a trade dress claim from John Deere for infringing on its well-recognized color scheme for agricultural equipment. No reasonable consumer is going to confuse a 911 with a tractor.
Trade dress protection is the strongest protection automobile manufacturers have to prevent other commercial ventures from making replicas of their cars. However, it applies only to commercial use and thus would not prevent making a replica for personal use.
Copyright law provides a more-limited degree of protection to automobile manufacturers because it does not extend to functional or utilitarian articles, such as automobile bodies. However, copyright provides strong protection to sculptural or graphic features that might adorn such an article. Examples include Rolls-Royce and Jaguar hood ornaments as well as the horse designs used in Ferrari’s and Porsche’s crest logos.
Note that copyright protects the expression of a concept or idea, but not the concept or idea itself. The reason that Ferrari and Porsche can both depict rearing horses in their logos is because the horses are depicted differently. Copyrights, like patents, eventually expire but can remain viable for many decades if properly registered.
Based upon this explanation, it seems likely that the Magnussons would have won if the case were brought in the U.S.
European differences
Krages points out that the law can be different in other countries. I thus turned to SCM contributor Martin Emmison for the view from the other side of the Atlantic. Emmison confirmed that U.K. law is different, and copyright can provide protection for automotive designs. Or, at least, for the old ones.
The U.K.’s 1988 copyright legislation states that if a utility-type design (50 or more items produced of that design) was capable of protection under our Design Rights legislation, that design falls outside U.K. copyright protection.
But a 2017 amendment provides an exception to that. If it is shown that the design in question was protected by copyright in any European Union jurisdiction on or before July 1, 1995, then it still may have copyright protection.
This means that if JLR could get a judgment of copyright infringement for the C-type body shape anywhere in the E.U., then JLR could sue U.K. replica businesses (such as Ecurie Ecosse, Lynx Motors, Proteus and others) for infringement of the C-type shape in a British court. I suspect that is why they decided to pursue the Magnussons in the Swedish court.
That may well be the legal strategy: Sue a small guy who can’t easily defend himself somewhere to establish the precedent that copyright law applies. Then use that precedent to go after the bigger fish. This would allow JLR to eliminate the competition so it can build and sell its own replicas, or “continuation” cars, as Magnusson and other enthusiasts insist is JLR’s plan.
What next?
The Magnussons are seeking assistance via GoFundMe and have filed a request for leave to appeal.
The JLR action follows repeated actions by Ferrari to protect its rights to the GTO shape, with at least one of these suits on appeal.
No matter their outcome, these cases demonstrate that automotive manufacturers are increasingly concerned about preservation of their intellectual-property rights. That may have been spurred on by E.U. rules that provide for cancellation of trademarks not currently used. It may also be related to the numerous “re-creations” that manufacturers are now building — and the accompanying fear that it will not be so easy to sell them if most everyone who wants one already has a replica. It may also be an effort to force the replica manufacturers to pay royalties.
Regardless of motivation, it seems that Jaguar is behaving badly. After 45 years of replica encouragement, it now changes course as it announces that it is building its own C-type continuation.
We don’t have all the answers, but it doesn’t seem likely that the police are going to come to your garage and confiscate your replica car. It may just become harder to buy one in the future. ♦
John Draneas is an attorney in Oregon and has been SCM’s “Legal Files” columnist since 2003. His recently published book The Best of Legal Files can be purchased on our website. John can be contacted at [email protected]. His comments are general in nature and are not intended to substitute for consultation with an attorney.