Germany: Trademarks II

Last Updated: 27 May 1998

I. Scope of Trademark Protection

A trademark owner - who has acquired trademark protection pursuant to Section 4 MarkenG - is entitled to an exclusive right in this trademark (Section 14 MarkenG). This includes the right to use the trademark exclusively and to prohibit others from doing so. However, in case of conflicting intellectual property rights covering signs and marks third parties are only prohibited from using the trademark without the consent of the owner if the trademark owner can rely on priority (Section 6 MarkenG). The priority in case of registered trademarks is the application date (or any earlier date which may be claimed). For signs which have acquired secondary meaning in the trade circles concerned, that time is relevant.

Section 14 para. 2 no. 1 to 3 MarkenG regulates the elements constituting a collision. The decisive criteria in this respect are "similarity" and "likelihood of confusion". The protection of a trademark does not only cover the use of an identical sign for identical goods but also protects the owner against use of an identical or similar trademark for goods or services which are, according to the view of the trade circles concerned, similar to those goods or services for which the trademark is registered (Section 14 para. 2 no. 2 MarkenG). Particularly in these cases a likelihood of confusion on the part of the public is given.

1. Similarity

In order to evaluate whether "similarity" is given one has to check whether the goods and services as registered for the trademark owner and those ofthe potential infringer indicate close connection points with respect to their origin, distribution place, features, economic importance and purpose of use so that the trade circles concerned attribute them to the same business. This point has to be considered in connection with the even more decisive question of a likelihood of confusion.

2. Likelihood of confusion

To determine the likelihood of confusion the registered trademark and the infringing sign are compared. Likelihood of confusion may be given in a tonal respect, a pictorial respect or regarding the meaning of the sign.

Further, it has to be distinguished between likelihood of confusion in a narrow and a broad sense. Likelihood of confusion in a narrow sense is given if the trade circles concerned actually confront the signs with each other. They may come to believe that only one and the same sign is existing or that, because of common features, one sign is a variation of the other sign. In contrast, a likelihood of confusion in a broad sense is given if the trade circles concerned nevertheless distinguish the signs but assume that both businesses using these signs are economically or organizationally connected.

In this connection it is important to distinguish strong and weak signs. Strong signs are trademarks which are deemed to be especially capable of protection because of their characteristic or acquired reputation. In case of weak signs even slight deviations can result in a denial of the likelihood of confusion.

A well-known sign having a reputation in Germany enjoys even stronger protection. For those well-known trademarks the owner may even claim protection for the use of an identical or similar sign for goods or services which are not similar to those for which a trademark enjoys protection, provided that the use of the sign results in a dilusion or an exploitation of the good reputation of the trademark having a prior time rank (Section 14 para. 2 no. 3 MarkenG).

II. Legal Procedure of Infringement Cases

1. In General

According to Section 140 para. 1 MarkenG, the owner of a trademark is entitled to sue an infringer for an injunction or for damages before special chambers at the Regional Courts ("Landgerichte") having exclusive jurisdiction without recourse to the value in dispute. After a judgment is rendered by a court of first instance the losing party may appeal the decision to the Court of Appeals. On further appeal the case will be finally determined by the Federal Supreme Court.

2. Remedies in an Infringement Suit

The owner of a trademark may demand a variety of remedies. His claim may be directed to receive an injunction against the infringer, to claim damages or to combine these claims in one proceeding.

a) Injunction

In case of a collision the owner of a trademark is entitled to prohibit a third party from using the sign. The trademark owner does not need to prove a direct infringement of the trademark, i.e. the use of the trademark in connection with the respective goods or services. It is already sufficient that the likelihood of confusion exists to find for a direct infringement of the trademark.

A trademark owner may enforce its trademark rights for an injunction either in a regular action before the courts (complaint, defense brief, oral hearing, witnesses, etc.), or more common, in an application for a preliminary injunction. In the latter proceedings an injunction may be granted ex parte. The right for an injunction follows from Section 14 para. 5 MarkenG.

b) Damages

According to Section 14 para. 6 MarkenG, the owner of a trademark is entitled to damages in case the infringing act was committed intentionally or negligently. However, the threshold to find negligence is not very high. The courts consider culpable infringement already to be given if an infringer could have taken notice of the trademark by a reasonable trademark research. Thus, almost every infringement will be considered to have occurred at fault.

In order to enable a trademark owner to determine the damages suffered, a court will order the infringer to provide the necessary information regarding the infringing acts (number of products manufactured and shipped, advertisements, etc.). The trademark owner may then chose among three options for calculating his damages: lost profit, profit of the infringer or usual reasonable license fees. A trademark owner may also claim compensation according to the rules of unjust enrichment. This claim does not depend on any fault of the infringer but leads to payment of a reasonable royalty only.

3. Available Defenses against the alleged Violation of Trademark Rights

The defendant in an infringement case has various options to defend himself:

a) The defendant may file a counter claim for cancellation of the trademark because of liability to revocation (Section 49 MarkenG) or because of the existence of prior rights (Section 21 MarkenG). Even if the defendant does not file a counter claim he can put forward as a defense that the claims are excluded because of legal validity of the registration of his trademark with later time rank (Section 22 MarkenG). This is the - more or less exceptional - case if a trademark with a prior time rank could have been canceled because of liability to revocation or because of absolute bars to protection on the date of publication of the registration of the trademark with a later time rank. The same applies if a plaintiff relies on a trademark or a trade designation having a reputation which has not yet become known in the business circles concerned on that date.

b) The defendant may also raise the objection that the owner of a trademark - which trademark has been registered for at least five years - has not been used within the last five years (Section 25 para. 1 MarkenG). In such case the plaintiff has the burden of proof with respect to the use of the trademark.

c) Somewhat similar is the plea of defendant that the owner of a trademark has acquiesced, for a period of five successive years, in the use of this trademark or trade designation while being aware of such use. In this case, the owner of the trademark or trade designation having a prior time rank cannot proceed against the use of the trademark.

d) A further defense is exhaustion. A trademark owner is not entitled to prohibit a third party from using a trademark in relation to goods which have been put on the market by him or with his consent in the European Union or other contracting states of the Convention concerning the European Economic Area under that trademark or trade designation. Exhaustion, however, is only applicable in cases where original goods are put on the market (Section 24 MarkenG).

e) Especially in the spare parts trade the regulation in Section 23 MarkenG is important. According to this provision a trademark owner is not entitled to prohibit a third party from using a trademark where such use is necessary to indicate the intended purpose of a product, in particular as accessories or spare parts - provided that such use is not contrary to honest practices.

f) Finally, the statutory limitation has to be considered as an argument of defense. Section 20 MarkenG provides a statutory limitation for the assertion of trademark claims of three years from the date on which the infringement of the trademark right became known to the trademark owner.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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