Oakley Inc v Animal Ltd & Ors

The power to implement a Community directive by subordinate legislation extends to choices and transitional arrangements expressly contemplated by the directive. Section 2 of the European Communities Act 1972 is a sui generis mechanism for giving effect to the United Kingdom’s Treaty obligations. It is not construed restrictively merely because regulations made under it may amend primary legislation.

Section 2(2)(a) does not require a line-by-line division between a directive’s mandatory core and its optional provisions. A statutory instrument selecting an expressly permitted option may be made for the purpose of implementing, or enabling implementation of, the Community obligation. Section 2(2)(b) permits additional measures arising naturally from, or closely related to, that implementation, but does not confer an unlimited power to legislate on matters having only a tenuous connection with the directive.

Oakley brought proceedings alleging infringement of registered designs for sunglasses. One design had been published before registration. Its validity depended upon whether the old law preserved by regulation 12 of the Registered Designs Regulations 2001 applied, or whether the grace period introduced under Directive 98/71/EC applied.

Peter Prescott QC, sitting as a deputy High Court judge in the Patents Court, held that the Secretary of State lacked power under section 2(2) of the European Communities Act 1972 to preserve the former law. He declared regulation 12 ultra vires and refused to sever it from the remaining Regulations. The Secretary of State appealed the ruling on vires, supported by Animal. Oakley appealed on severability.

The central issue was whether section 2(2) authorised subordinate legislation selecting an option expressly permitted by a directive, including a transitional option preserving existing domestic law.

1. The Secretary of State’s appeal was allowed. The Registered Designs Regulations 2001, including regulation 12, were validly made. The severability issue therefore did not arise. Waller LJ gave the leading judgment. May and Jacob LJJ agreed with the result and the essential reasoning.

2. Section 2 of the European Communities Act 1972 is a sui generis legislative mechanism flowing directly from the United Kingdom’s Treaty obligations. Although regulations made under section 2(2), read with section 2(4), may amend primary legislation, the restrictive approach ordinarily associated with a Henry VIII clause does not govern the implementation power. The regulations must instead be construed in the context of the directive and the Community obligation being implemented: per Waller LJ at [19]–[23] and Jacob LJ at [61]–[70].

3. Section 2(2)(a) does not require a directive to be divided line by line into mandatory and optional provisions. Implementing a directive ordinarily requires choices about form, methods, enforcement and transition. A choice expressly conferred by the directive may therefore be implemented by subordinate legislation. Article 11(8) of Directive 98/71/EC expressly permitted Member States to preserve former grounds of invalidity for earlier design registrations. Regulation 12 selected that permitted transitional option and was made for the purpose of implementing, or enabling implementation of, the directive: per Waller LJ at [24]–[29], May LJ at [42]–[46], and Jacob LJ at [52]–[67].

4. Waller LJ further explained, obiter, that section 2(2)(b) adds a power to make measures which naturally arise from, or closely relate to, the primary European implementation purpose. A merely tenuous connection is insufficient. A significant policy choice is not automatically outside the power. May LJ agreed that section 2(2)(b) is confined by its language and context, while Jacob LJ regarded its precise ambit as dependent upon the particular instrument and context: [30]–[39], [47], [73]–[80].

1. Court of Appeal (Civil Division): The Secretary of State’s appeal was allowed. The court held that the Registered Designs Regulations 2001 were validly made. Oakley’s severability appeal consequently required no determination.

2. High Court, Chancery Division (Patents Court): Peter Prescott QC, sitting as a deputy High Court judge, held on 17 February 2005 that regulation 12 was ultra vires and refused to sever it from the remaining Regulations. No neutral or report citation is stated.