The Trademarks Law Review: Germany
Embedded in the European system, yet equipped with a confident own voice and some highly regarded national peculiarities, Germany, with its legal framework, is rightfully perceived as an attractive jurisdiction for trademark owners. Due to the efficient but diligent German Patent and Trade Mark Office (DPMA), experienced courts and established case law, Germany remains an outstandingly stable and reliable jurisdiction when it comes to registering and enforcing trademark rights. Strengthening the alignment of the German trademark system with EU law, a recent reform in German trademark law has brought some significant changes both in substantial and procedural law.
Because Germany is a member of the European Union, its national trademark system is deeply intertwined with the European Union trademark (EUTM) system. The two systems run in parallel (i.e., a German trademark is legally independent from a homonymous EUTM), although their geographical scope of protection does, in part, overlap. Hence, it may often be advisable to combine the systems and seek both EU and German trademark protection. As of 14 January 2019, the German Trade Mark Modernisation Act entered into force, amending the German Trade Mark Act. Some provisions, such as amendments to invalidity actions based on earlier rights, only came into force on 1 May 2020. Transposing the EU Trade Marks Directive 2015/2436, the reform resulted in an even closer alignment of the two legal frameworks. However, there remain some important differences between the two systems that practitioners should keep in mind. This chapter highlights the most important recent changes to German trademark law, as well as the differences between German and EU trademark law where relevant.
The Trade Mark Act is by far the most important source of German trademark law. Further supplementary legal norms are the Regulation concerning the implementation of the Trade Mark Act, the Act on the Extension of Industrial Property Rights, the Patent Costs Act and the Guidelines for Trade Mark Registration and Opposition Proceedings.
As Germany is a contracting party of the Madrid Agreement and the Madrid Protocol, international registrations covering jurisdictions outside Germany may be obtained using a national German trademark as basic registration; likewise, protection in Germany may be secured by an international registration based on a foreign national trademark. In addition, Germany is a contracting party of:
- the Paris Convention for the Protection of Industrial Property;
- the Nice Agreement, which harmonises the classes for the goods or services for which the mark is registered;
- the Vienna Agreement, establishing an international classification of the figurative elements of marks;
- the TRIPS Agreement on Trade-Related Aspects of Intellectual Property Rights;
- the Trade Mark Law Treaty; and
- the Singapore Treaty on the Law of Trademarks for the standardisation of national and regional trademark registration procedures.
All German trademark applications have to be filed with the DPMA. The decisions of the DPMA regarding the registration of trademarks may be reviewed by the Federal Patent Court (BPatG), whereas the Federal Supreme Court (BGH) serves as a court of last resort, reviewing only legal (not factual) aspects of the BPatG decision. EUTMs registered with the European Intellectual Property Office, and international registrations designating Germany and registered with the World Intellectual Property Organization (WIPO), are also valid and enforceable in Germany.
Protected commercial designations, such as company names, cannot be registered with the DPMA or any other German authority. The German Trade Mark Act requires no such registration, as protection is granted without further administrative steps for signs used in trade as a name, company names or special designations of a business operation or an enterprise. In the case of legal disputes, civil courts will decide upon the existence of such rights.
With regard to domain name protection, all domain names ending with the .de top-level domain have to be registered with the German Network Information Centre (DENIC). Because of data protection legislation, DENIC employs a restrictive approach regarding accessibility of domain holder information. Information on availability and ownership of .de domains may only be provided to trademark owners whose trademark rights are potentially being infringed by the domain in question, or to applicants who have obtained an enforceable title against the domain holder.
iii Substantive law
The legal basis for the protection of trademarks, company names, trade names, business names and geographical indications is the German Trade Mark Act. With regard to company names and names of natural persons, both the German Civil Code and the German Commercial Code set out additional provisions for their scope of protection.
All registered German trademarks are protected under German trademark law. To register a trademark, the applicant must file a trademark application with the DPMA. A trademark will be registered once the DPMA has examined and confirmed its eligibility for trademark protection. Only then will the opposition phase begin, which lasts three months. This registration process is an essential difference between the EUTM and the German trademark system and entails an advantage for the registrant as he or she does not have to wait until after any opposition proceedings are concluded to enjoy protection for his or her already registered trademark. The 2019 trademark reform has abolished the requirement of graphic representability. As of 14 January 2019, trademarks need only be able to be represented 'in any way that allows determining the subject matter of the trademark protection'. Hence, applicants might now submit, for example, hologram or audiovisual trademarks represented in electronic files. The manageable number of applications for these new forms of trademarks at the DPMA has so far already raised some questions with regard to their formal representation. Based on these new challenges faced by national trademark offices, the EU has initiated a convergence project on new types of trademarks which may serve as guidance for practitioners both on EU and national level.
Unregistered trademarks enjoy protection under the German Trade Mark Act insofar as they have acquired public recognition as a trademark by use in trade or if they constitute a well-known mark. Whereas the sign must be well-known in Germany to constitute a well-known trademark, it must not necessarily have been used in Germany to acquire such status.
The German Trade Mark Act provides protection for registrations of indications of geographical origin as well as for collective marks. Since entering into force in 2019, the amended Act now also allows for certification marks to be registered and protected. The certification mark must be capable of distinguishing goods or services that are certified in respect of certain quality traits or other characteristics from goods or services that are not so certified. Natural persons or legal entities that carry on a business involving the supply of goods or services of the certified kind may not apply for a certification mark. As of September 2020, more than 100 applications for certification marks had been filed with the DPMA.
Commercial designations, such as company names, are also protected under the Trade Mark Act, provided that they are actually used in trade. The geographical scope of protection of commercial designations is not necessarily nationwide as the law grants protection only insofar as they are used in trade. Companies that are only active within a specific part of Germany may only claim protection for their commercial designations in that area.
Domain names as such are not covered by the German Trade Mark Act. Registration of domain names with the DENIC is subject to availability. However, a domain name might qualify as an unregistered trademark if it has acquired public recognition as a trademark by use in trade. Similarly, domain names may qualify as company names. In addition, an already registered domain name may be registered as a trademark.
Registration of marks
i Inherent registrability
Trademarks may be registered if the DPMA does not consider an absolute ground for refusal to be applicable. In contrast to patent and trademark offices in some other jurisdictions, there is no ex officio examination on relative grounds (see Section III.ii). Hence, a trademark, inter alia, has to be distinctive (i.e., not be descriptive of the goods or services, not deceive the public and not be contrary to public policy). A sign may also acquire distinctiveness by use in trade. To prove acquired distinctiveness, the owner may submit, inter alia, market share data, advertisement material and consumer surveys indicating that at least 50 per cent of consumers perceive the sign as an indication of origin. In 2019, new absolute grounds for refusal were introduced. As of 14 January 2019, the DPMA refuses registration of trademarks that consist of geographical indications and designations of origin; in particular, for foodstuffs, wines and spirits protected under national or European legislation or conventions. Third parties, such as manufacturer associations, may now submit written statements, explaining the reasons why the trademark should not be registered ex officio. However, the expected rise in complaints from third parties regarding protected geographical indications and designations of origin has not yet been borne out.
The duration of protection for registered trademarks commences with the date of filing. For all trademarks registered before 14 January 2019, the protection lapses 10 years after registration, by the end of the last day of the month of registration (e.g., a trademark registered on 7 January 2019 would lapse by the end of 31 January 2029). Trademarks registered on or after 14 January 2019 lapse exactly 10 years after registration (e.g., a trademark registered on 15 January 2019 would lapse by the end of 15 January 2029). Upon payment of renewal fees, trademark protection can be renewed for additional 10-year periods. There is no limit as to how often trademark protection may be renewed.
Fees for German trademarks are significantly lower than those for EUTMs. The basic application fee for a German trademark is €300 (€290 for electronic filing) and includes the fee for three classes of goods or services. Each additional class of goods or services costs €100. Renewal fees are €750 (including three classes) and €260 for each additional class.
ii Prior rights
The DPMA does not assess ex officio whether the registration of a trademark may be refused on grounds of earlier rights. Earlier rights must be invoked by the respective right holder in an opposition proceeding. Hence, right holders are advised to constantly monitor trademark registrations. Later 'attacks' based on prior rights are possible after the opposition period has ended, but require action in court (see Section III.iii). Applicants, on the other hand, should ensure that no identical or confusingly similar earlier marks have been registered prior to seeking registration themselves.
iii Inter partes proceedings
Any owner of an earlier right may lodge an opposition within a three-month period after the date of the publication of the registration of the challenged trademark. As of 14 January 2019, an opposing party may file an opposition on the basis of several earlier rights, while the previous system required a separate opposition for each earlier right invoked by the opposing party. The 2019 reform also introduced a cooling-off period during opposition proceedings. Upon joint request of the parties, the DPMA may grant a period of at least two months for the parties to reach an amicable settlement.
Upon request by a third party, a trademark may be revoked due to, inter alia, non-use within five years of registration, genericisation of a trademark or deceptiveness acquired by use of the trademark.
Furthermore, any third party may lodge an invalidity action based on absolute grounds for refusal or earlier rights, provided that the ground for refusal or the earlier right still exists at the time of the invalidity decision.
Revocation and invalidity actions can be filed either with the DPMA or with the civil courts. Under the former system, however, trademark owners were only able to file invalidity actions based on earlier rights with a civil court. This has changed as of 1 May 2020. Under the new regime, all revocation and invalidity actions, including invalidity actions based on earlier rights, at the choice of the claimant, may be filed either with the DPMA or with a civil court.
With regard to the decisions of the DPMA, appeals may be lodged with the BPatG. The decisions of the BPatG can only be reviewed on points of law by the BGH if the BPatG has allowed such an appeal on points of law in its order or if a significant procedural right has potentially been violated.
With regard to the decisions of the civil courts of first instance, appeals may be lodged with appellate courts (OLG). Decisions of the OLG may be reviewed on points of law (not facts) by the BGH.
Regional courts are exclusively competent as courts of first instance for civil trademark litigation. Regional courts specialised in trademark litigation have been established, thus guaranteeing that highly qualified judges with expertise in intellectual property law are handling trademark cases.
In Germany, the relatively high number of 18 regional courts serve as EU trademark courts of first instance. They are the competent courts when it comes to actions for infringement or threatened infringement of an EU trademark, actions for a declaration of non-infringement, actions for compensation under the EU Trade Mark Regulation and for counterclaims of revocation or invalidity of an EU trademark.
ii Pre-action conduct
German trademark and civil procedure law does not require pretrial formalities for a claim to be admissible. Claimants, however, should consider sending out warning letters or cease-and-desist letters before going to court. If they file a claim without having served the defendant with a warning letter and the defendant instantly acknowledges the claims brought against him or her, the claimant bears the costs of the court proceedings as, in this case, the defendant had not given rise to be sued; this is in contrast to the general rule according to which the defeated party bears the costs. Parties fearing that an ex parte injunction may be ordered against them may submit their position on the subject to a central register for protective briefs.
Alternatively, trademark disputes may be settled by arbitration and other procedures of alternative dispute resolution. Although associations such as the German Arbitration Institute provide support for the conduct of arbitration-related tasks in Germany, and an arbitration award has the same inter-party effect as a final and binding judgment handed down by a court, such litigation alternatives are rarely used in Germany. Alternative dispute resolutions concerning domain names can be fought out before general arbitrators, as German law does not provide for a specific arbitration or alternative dispute resolution mechanism for domain names. Neither does the WIPO Center offer dispute resolution services for .de domains.
iii Causes of action
As the competent courts for trademark infringements are – specialised as they may be – ordinary regional courts, they are also competent for unfair competition, domain names and commercial designation disputes. All these types of disputes may be brought before the court in one and the same proceeding, be it as part of the statement of claim, by extension of a claim or a counterclaim, provided that the parties are the same and the court is territorially competent to hear all disputes.
iv Conduct of proceedings
Proceedings commence with filing a written statement of claim. The claimant must present all factual and legal grounds to substantiate his or her claim. Evidence must either be submitted (e.g., as annex) or 'offered to be provided' (i.e., the written submission announces the introduction of evidence if the fact to be proven remains disputed). The defendant will then submit a written statement of defence. Replies and rejoinders may follow. Since trademark matters are heard by regional courts, parties must be represented by a professional practitioner (i.e., a member of the Bar). Upon the first oral hearing before the court, the judge will only discuss the factual and legal points of the case that he or she deems to be crucial for his or her decision. Upon prior written court order for evidence, the parties may be asked during the hearing to present evidence they had offered within their submissions, such as witnesses or expert opinions. Usually the judge will indicate which arguments he or she considers to be more convincing. In many cases, the court will try to facilitate leading the parties to an amicable resolution of the legal dispute. If an amicable settlement cannot be reached and the dispute does not require further submissions or oral hearings, the court is supposed to pronounce its decision within three weeks of the last oral hearing. In the case of lengthy and complex matters, however, the court may take more time to draft its decision. German procedural law follows the principle that the party that has not prevailed in the dispute is to bear the costs of the legal dispute. Costs have to be shared proportionately if and when each of the parties has prevailed for a part of its claim or defence. With regard to the attorney fees, the extent of the costs to be compensated is capped. Only statutory fees and expenditures of the attorney of the prevailing party are to be compensated. Actual fees are often higher than the statutory fees, as the latter serve as legal minimum.
German procedural law does not provide for pretrial discovery nor does it entail full disclosure proceedings. Nevertheless, German courts may allow evidence to be introduced that was previously gathered by way of a discovery or disclosure proceeding outside the German jurisdiction.
Courts may order remedies, such as cease-and-desist orders, damages, claims for disclosure of information, claims for destruction and claims for publishing the court's judgment. The latter rarely happens in practice. German law does not provide for punitive damages to be awarded. With regard to damages for trademark infringement, the claimant may choose the method by which the actual damage is calculated. He or she can decide to calculate the damage based on a licence analogy, claim the profit the defendant made as a result of the trademark infringement or estimate the profit he or she lost due to the trademark infringement.
In recent cases, the BGH has, based on a cease-and-desist claim, ordered the infringer to recall the infringing products. These rulings were heavily criticised because, according to German law principles, cease-and-desist claims generally do not entail an obligation to act. A respective case before the constitutional court is still pending. It is not possible to foresee the extent to which the BGH's case law on recall claims will remain valid in the future.
Other enforcement proceedings
Intentional trademark infringements are punishable under German criminal law with imprisonment of up to five years or a fine. In the course of criminal proceedings, infringing products may be secured by seizure. The trademark owner may participate in the prosecution alongside the public authority as a private accessory prosecutor, or combine the criminal proceeding with civil law infringement claims, or both.
Customs enforcement of trademark rights is largely harmonised by EU law. Trademark owners registered with the customs authorities will be informed with regard to counterfeit goods seized by customs. Subsequently, trademark owners can ask for the counterfeit goods to be destroyed. Because of the European Union Customs Union and the Schengen Agreement, border controls focus on third-country goods arriving through German airports and seaports.
Recent and pending cases
Recent German court decisions deal with shape marks, exhaustion, registration of colours per se and the requirements of distinctiveness.
The last chapter of a long-fought trademark battle between international chocolate giant Mondelez (to which Milka, one of Germany's most popular chocolate brands, belongs) and German Ritter Sport over trademark protected square-packaging shape for chocolate bars ended with the BGH ruling in favour of the traditional square packages used by the German brand. In its decision of July 2020, the BGH confirmed trademark protection for the square shape mark, which had been registered with the DPMA for about 20 years, by refusing to follow Mondelez' argument that the iconic Ritter Sport packaging shape 'gives substantial value' to the chocolate within the meaning of the German Trade Mark Act (and the EU Trade Mark Directive). In a delicate, but vaguely worded, attempt to interpret an already ambiguous legal text, the BGH did not declare the shape mark invalid on absolute grounds of refusal as 'the consumers' decision to buy the product in question is not largely determined by the shape'. Earlier attempts to have the Ritter Sport trademark declared invalid on other grounds had been equally squashed by the BGH in 2017.
In its Keine-Vorwerk-Vertretung decision of 2018, the BGH ruled that a domain name using a third-party trademark with reputation in Germany may be infringing the trademark owner's rights, even if the website offers used products and spare parts. The defendant tried to claim exhaustion and justified descriptive use in the spare parts business. The court, however, found that, in essence, the domain name holder had other options to promote his spare part business and that these additional options were less invasive than the use of the third-party trademark as part of his domain name. In a similar case, the BGH clarified that trademark use might be justified on grounds of exhaustion even if the third party is using unorthodox measures to promote the goods in question. Exhaustion also applies in cases where the third party has the promoted trademarked goods at his or her disposal, which does not necessarily mean that the goods in question are in stock. With regard to the registration of multiple colour marks, the BPatG clarified the requirements for submitting a precise representation of the mark in question. When registering colours per se, such a precise representation requires indicating the proportion of the different colours to be used, a definition of the borders between the colours (e.g., straight or curved line) and a definition of the colours themselves by using either the Pantone or the RAL code. In the case in question, the registrant had confusingly used both Pantone and RAL codes, resulting in contradicting colours. In Pippi Langstrumpf II, the BGH held that names of natural persons, such as Astrid Lindgren's Pippi Longstocking, may be deemed descriptive and hence devoid of distinctiveness. The descriptive meaning of the sign, however, is only relevant in cases where it is not unlikely that the sign is used in a manner for which it is deemed descriptive. If the only likely use is non-descriptive, the sign may well be registered.
Apart from the Federal Constitutional Court's case concerning the recall of infringing products (see Section IV.v), pending cases mainly include requests for preliminary rulings before the Court of Justice of the European Union (CJEU), lodged by German courts. One of these requests, submitted by the OLG Düsseldorf in November 2018, concerns the question of whether use of a trademark (Ferrari's testarossa mark) is genuine within the meaning of the EU Trade Mark Directive in the case of a trademark that is registered in respect of a broad category of goods, but is actually only used in respect of a particular market segment. While the OLG Düsseldorf tends to apply a rather strict assessment of genuine, right-maintaining use, it is uncertain whether the CJEU decision comes to the same conclusion. Another request for a preliminary ruling was lodged by the BGH in September 2018, asking the CJEU whether a person storing trademark-infringing goods on behalf of a third party without being aware of the infringement, stocks those goods for the purpose of offering them or putting them on the market, if it is not that person him or herself but rather the third party alone that intends to offer the goods or put them on the market. In this case, Davidoff licensee Coty sued Amazon – the BGH expressly tended to deny such a broad interpretation of an infringing act of storing as it would overstretch the limits of the storing person's liability. In 2020, the CJEU confirmed this view by ruling that the notion of 'use' must involve an active behaviour by the storing party aimed at offering or putting those goods on the market. Lastly, the BGH had, in its #darferdas decision, asked the CJEU for a preliminary ruling on whether a sign has distinctive character when there are, in practice, significant and obvious possibilities for it to be used as an indication of origin in respect of goods or services, even if this is not the most likely form of use of the sign. The BPatG had deemed the sign #darferdas to be devoid of distinctive character as it was likely to be used on the front of shirts as a mere decorative element. Following the preliminary ruling by the CJEU, the BGH, in #darferdas II, sent the case back to the BPatG to assess whether the sign in question could be distinctive due to a less likely use form, e.g. use of the sign on a label.
Now that the first statistics on the recent changes in German trademark law have been published, it appears that the new provisions have already been relatively well accepted. No numbers, however, have been published regarding the newly introduced cooling-off period. These new procedural rules on trademark oppositions still need to prove their efficiency and the opposing parties' conduct will show if the newly introduced cooling-off period will lead to more amicable settlements. Adoption to this newly introduced cooling-off period should be smooth as practitioners are already familiar with cooling-off periods from EUTM opposition proceedings.
It is yet to been seen to what extent the new certification mark can further establish itself. The DPMA is already confronted with new forms of trademarks and the associated difficulties of presentation. However, thanks to cooperation at European level, uniform guidelines for right holders may soon be available. In addition, the Ritter Sport case strengthened the position of shape mark owners. Thus, Germany will probably continue to prove to be an attractive and innovative jurisdiction for non-traditional trademark forms in the near future.
With regard to – long awaited – future decisions, the Federal Constitutional Court may finally shed some light on the question of whether and to what extent the defendant is obliged to recall trademark-infringing products based on a cease-and-desist claim.
Courts will continue to face more and more cases regarding the interaction between domain names and trademarks. To date, cases concerning influencer advertising through social media platforms have been assessed by German courts predominantly under unfair competition law aspects. However, trademark-related questions might emerge in this rather new legal practice area as more influencer business practices are being scrutinised before German courts.