Dear readers,

Last month again saw some interesting decisions, which we have compiled for you in the current issue of TRADEMARK INSIGHT. Below you will find our summaries of decisions of German courts, the EUIPO Boards of Appeal and the EUGC. The decisions on the elimination of the risk of recurrent infringement, on the principles of distinctive character acquired through use, on the consideration of subsequent grounds for opposition and, finally, on the principle of forfeiture are likely to be of particular interest.

We hope you find our summaries useful reading and enjoy them.

 Thorsten Klinger and Dr Andreas Renck.

Index

Elimination of the likelihood of repeated infringement (BGH)

In a trade mark infringement proceeding, the German Federal Court of Justice (Bundesgerichtshof, BGH) recently dealt with the impact of a cease-and-desist declaration in accordance with the so called Hamburger Brauch on the likelihood of repeated infringement in preliminary injunction proceedings. The following summary therefore deals with German specialities of procedural law (for anyone who would prefer to skip this decision).

The Hamburger Brauch: The so-called Hamburger Brauch (Custom from Hamburg) is a form of contractual penalty promise that has developed from case law. In principle, it is necessary for the warned party to undertake to pay a contractual penalty in the event of a breach of the cease-and-desist declaration. The amount of this contractual penalty is generally fixed, regardless of whether it is a first infringement or already the fifth subsequent infringement.

This problem has given rise to the so-called Hamburger Brauch in Germany, according to which no quantified contractual penalty is agreed, but only an appropriate contractual penalty. The debtor agrees to pay a contractual penalty, which is set by the creditor (rightholder) at his reasonable discretion and, if necessary, can be reviewed by a court for reasonableness. In practice, this takes into account that several infringements are far more significant than a first infringement. If the court considers a lower contractual penalty to be appropriate in its decision, the debtor only has to pay the lower amount.

The background to this decision: The decision was preceded by preliminary injunction proceedings against an infringer who submitted the requested cease-and-desist declaration without a concrete contractual penalty (and thus in Hamburger Brauch-style). After another infringement, the rightholder issued another warning notice and again demanded the submission of a cease-and-desist declaration with a quantified contractual penalty. Again, the infringer had given the declaration only in accordance with the Hamburger Brauch and thus without naming a specific contractual penalty. The rightholder then pursued his goals by taking legal action against this, since in his view, such a declaration without a contractual penalty would not be suitable to eliminate the risk of repetition.

First Instance decision (Regional Court Braunschweig): The Regional Court of Braunschweig dismissed the application for an injunction because no likelihood of repetition was seen by the judges, since the infringers declaration to cease and desist according to Hamburger Brauch (without specified contractual penalty) had successfully eliminated the danger of repetition in this case.

Second Instance decision (Higher Regional Court Braunschweig): The rightholder filed an appeal against this first instance decision before the Higher Regional Court (OLG), which was only successful with regard to acts of infringement being in core similar. In all other respects (i.e. with regard to identical acts of infringement), the OLG held that the declaration was to be qualified as an expression of a serious intention to cease and desist. Not accepting this declaration (as done by the rightholder) did not prevent the danger of repetition from ceasing. The fact that it was a repeated cease-and-desist declaration with an unquantified contractual penalty did not prevent the elimination of the likelihood of repetition.

Final decision (German Federal Court of Justice): The rightholder raised an appeal against the Higher Regional Courts decision before the BGH and was now successful. Contrary to the opinion of the Court of Appeal, the BGH held that the claim for injunctive relief was not extinguished by the issuance of the cease-and-desist declaration in accordance with the Hamburger Brauch, not only with regard to the infringing acts identical to the core, but also with regard to the identical infringing acts. According to the BGH, in general, the defendant has to be prohibited from continuing acts of infringement unless there were special reasons against this. Such a special reason could generally be seen in a cease-and-desist declaration with a penalty clause. The repeated submission of a cease-and-desist declaration with an unspecified penalty clause (in accordance with the Hamburger Brauch did not in principle prevent the danger of repetition from ceasing to exist. However, the BGH held that this would be the case after the rightholders rejection of the cease-and-desist agreement. 

According to the BGH, the court of appeal had correctly assumed, that the repeated submission of a cease-and-desist declaration according to the Hamburger Brauch was in principle sufficient to eliminate the likelihood of repeated infringement. Although, generally a declaration to cease and desist with a higher contractual penalty was required in the event of repeated infringements, according to the judges, the Hamburger Brauch met this requirement because it permitted fixing a contractual penalty in any amount and the trade mark proprietor was therefore free to set a higher contractual penalty in case of repeated infringements.

However, the court held that the rejection of the cease-and-desist declaration precluded the lapse of the danger of repetition in the present case. The obligation to pay a contractual penalty was not already established by the receipt of the cease-and-desist declaration, but only by its acceptance. In principle, the danger of repetition already ceased to exist upon receipt, but claims for payment could only be asserted after acceptance of the cease-and-desist agreement.

The fact that the receipt of a cease-and-desist declaration in principle already means the cessation of the risk of repetition is justified by its deterrent effect. In the case of a repeated infringement, however, the deterrent effect requires a further contractual penalty obligation, since the first one obviously did not deter the debtor (infringer) from a repeated infringement. Such a deterrent effect is only given if the infringers offer to conclude a cease-and-desist agreement is binding even after the usual acceptance period.

If the injunctive creditor (rightholder) refuses to accept such a declaration, from that point on there is no such thing as a contractual penalty as a remedy to control behavior and deter the debtor from future infringements. As a result, in cases of repeated acts of infringement, the final cessation of the danger of repetition was therefore dependent on the creditor, who could prevent the final cessation of the danger of repetition vis-à-vis the creditor by his rejection of the cease-and-desist declaration directed towards the conclusion of an appropriate contractual penalty agreement.

(BGH, judgment of 1.12.2022, I ZR 144/21)

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Descriptive character and distinctiveness of the sign "essence" (EUGC)

The EUGC recently ruled on the protectability of the sign "essence", shown below left, for various food supplements and foodstuffs in classes 5, 29, 30 and 32. The Office had previously refused the application as descriptive for all goods except milk and honey. This was upheld by the Board of Appeal.

The action against this before the EUGC was unsuccessful. According to the judges, the sign is understood as an indication of an extract or concentrate used as a perfume or for flavoring. For the goods in question, it would therefore be understood as a descriptive indication that the goods contain essences, for example from plants. Contrary to the applicant's submission, the court held that the first letter 'e' in the sign at issue is not perceived in isolation from the rest of the sequence of letters, but is perceived by the relevant public as the first letter of the word 'essence'. In this respect, the judges saw a difference from the previous decision cited by the applicant with regard to the sign shown below on the right, in which the graphically designed 'e' is placed above the word 'essence' and occupies a separate and independent position within the mark. With regard to the distinctive character of the figurative element, the Court agreed with the Board of Appeal and held that the public would perceive it as purely decorative.

(EUGC, judgment of 7.12.2022, T-738/21)

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Likelihood of confusion between "Buffet" and "BUFF" (EUIPO)

The EUIPO Board of Appeal ruled on the likelihood of confusion between the signs "Buffet" and "BUFF", each of which claimed protection in Class 25 (amongst others). The Opposition Division had previously rejected the opposition despite the fact that the claimed goods were largely identical, because the additional letters "et" significantly lengthened the sign applied for, so that visually and phonetically there was at most a below-average similarity. Further, the consumer remembers the clear conceptual idea 'buffet', so that the signs are conceptually dissimilar. This would neutralize the weak similarity of the signs according to the opposition division, so that overall, despite the partial identity of the goods and the increased distinctiveness of the opposing mark acquired through use, there is no likelihood of confusion.

The opponent successfully appealed against the decision rejecting the opposition. The Board of Appeal confirmed the statements on the comparison of goods and the distinctiveness of the signs. However, in the context of the comparison of the signs, an average visual similarity was to be assumed, since the addition "et" in the sign applied for did not signify a substantial extension of the earlier mark and, moreover, the double letter "FF" contained in both signs had a dominant role. Notwithstanding the below-average phonetic similarity and the different meanings for parts of the English-speaking public, a neutralization of any similarity of the signs by clear conceptual differences was not discernible. This applies not only to the public for which neither sign conveys a specific meaning, but also to those who understand only one of the two signs. In the case of a lack of conceptual understanding, at least for one term, there was no (possibly neutralizing) difference, but merely a lack of similarity, which had a neutral effect on the comparison of the signs.

The BoA held that an overall assessment, taking into account the doctrine of interdependence, showed a likelihood of confusion, so that the contested decision had to be annulled.
(EUIPO BoA, decision of 16.12.2022, R 528/2022-2)

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Principles on distinctive character acquired through use in the EU (EUIPO)

In 2020, HUMMEL HOLDING AS applied to the EUIPO for registration of the sign shown below as a EU position mark for footwear, in particular leisure and sports footwear in Class 25. Following an objection on the grounds of lack of distinctiveness, the applicant pointed out that in the absence of inherent distinctiveness, it claimed distinctiveness acquired through use.

However, the Office rejected the application even after the applicant had submitted extensive evidence, as acquired distinctiveness had not been proven. There was no doubt that the entire population of the EU had already been exposed to the trade mark, due to the considerable marketing expenditure for example. Nevertheless, it could not be assumed that the applicant had acquired distinctive character with its mark in all countries of the EU.

The applicant's appeal was now successful. The Board of Appeal (BoA) found that acquired distinctiveness had to be proven where the sign applied for lacked inherent distinctiveness, which in the present case was the entire territory of the European Union. While it was excessive to require such proof for each individual country, this should not be understood to mean that such proof was sufficient only for a substantial part of the EU. Rather, it must be assumed that the proof provided for one Member State could also be relevant for other Member States due to the internationalized trade, which is partly grouped into marketing areas. Such evidence could be provided either globally for all Member States concerned or separately for different Member States or groups of Member States.

The market share held by the trade mark, the geographical extent, the duration of use and the extent of investment in the trade mark were held to be relevant factors by the BoA. Further, the board found that it was also necessary that a significant proportion of the relevant public in the Member State concerned, when looking at the sign, recognized that the products bearing it came from a single undertaking.

In particular, due to the special nature of the EU and its character as a single market, the existence of smaller regions and markets should not be disregarded, although their size and distribution should always be taken into account. Overall, the totality of all the evidence must constitute a quantitatively and geographically representative sample of distinctive character acquired through use throughout the territory of the European Union.

In the present case, the applicant had succeeded in proving, by means of extensive evidence, that it had acquired distinctive character through use throughout the entire territory of the European Union. In this context, the applicant's long-standing sponsorship of major sporting events was of particular importance, which had led to the trade mark being regarded as iconic in European handball. The Board of Appeal found that the applicant had also rightly pointed out that the particularities of globalized trade had to be taken into account. The applicant had successfully been able to show in a credible manner that the evidence relating to a distributor was certainly to be taken into account for different Member States. Overall, the BoA held that a sufficient proportion of the public recognized the sign as an indication of origin.

(EUIPO BoA, decision of 7.10.2022, R 208/2022-1)

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Distinctiveness of the sign "HUQQA" (BPatG)

The BPatG recently dealt with the distinctiveness of the word/figurative mark "HUQQA" for goods in Class 34 and 35, including tobacco products, smoking accessories, pipes and trade fair services. The sign resembled the term "Huka" or "Hookah", which has also entered German language, so that the sign is perceived as a mere reference to a product.

The DPMA had previously found a lack of distinctiveness for the goods having a connection to tobacco or hookahs. The word "HUQQA" was a synonym for hookah. The graphic design also did not confer any distinctive character on the sign, as the elements did not show any particular complexity or originality, but were merely decorative and customary in advertising. Furthermore, there was also a need to keep the sign free.

The appeal filed against this decision was upheld by the BPatG. According to the court, the sign at issue had the required minimum degree of distinctiveness. It was true that the word element of the trade mark was indeed a modified form of the term for an Indian "Hookah" or "Huka", which had also been lexically registered in Germany for a long time. The public also understands the term accordingly, so that it constitutes a descriptive indication in connection with the goods and services in dispute. Furthermore, neither the double consonant sequence "QQ" nor the different letter size led to distinctiveness.

Distinctive character was nevertheless created by the graphic design. According to the judges, the additional arch-like element below the letter combination "QQ" achieved a certain characteristic visual effect in comparison with the trade mark shown at the bottom right, which had been rejected before. The court agreed that upper and lower lines are in principle simple graphic elements customary in advertising, which also applies to the additional arch in this case. However, the combination of the two arches and the letter combination "QQ" created a special pictorial effect within the overall sign, which was perceived as a laughing face. Instead of a possible corresponding objective of the trade mark proprietor, the obvious perception by the targeted public must be taken into account. The two arched elements thus do not merely have an ornamental effect.

The BPatG also found no need to keep the mark free, as the trade mark did not enjoy protection for use of the word element as a sign in any form, but only in the specific graphic form.
(BPatG, Beschl. v. 23.1.2023, 29 W (pat) 23/20)

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Bad faith of the application for the sign "hepsiburada" (EUIPO)

The EUIPO Board of Appeal recently dealt with the absolute ground for refusal of bad faith of the application for the EU word mark "hepsiburada" in invalidity proceedings. Previously, the Cancellation Division had rejected the corresponding application. According to various pieces of evidence, the applicant is indeed an extremely successful and well-known company in the EMEA region with considerable growth in Europe. However, the applicant did not provide sufficient evidence that the trade mark proprietor had acted in bad faith by applying for a sign identical to the Turkish corporate name or the earlier Turkish trade mark rights. After all, the applicant had previously also had the opportunity to claim trade mark rights in the EU trade mark system, which is characterized by the "first-to-file" principle. Bad faith could not be imputed to the applicant due to the applicant's limited efforts on the European market at the time of filing.

The applicant's appeal against the Cancellation Division's decision was now successful. In its assessment, the Cancellation Division erred in law in rejecting parts of the documents submitted by the applicant as being out of time. It was clear from these documents that the trade mark proprietor had acted in bad faith.

Contrary to the trade mark proprietor's submission, the contested trade mark claims goods and services which are identical to those of the identical Turkish trade marks. Since the applicant for the contested trade mark at the time was also active in the e-commerce sector and its Turkish managing director was also the managing director of a Turkish company, there were no doubts as to the applicant's knowledge of the existence and business activities of the applicant. The decision to apply for a trade mark was not based on business logic and use of the trade mark by the trade mark proprietor could not be proven either. All the circumstances led the office to find that the trade mark had only been applied for with the aim of obstruction and thus in bad faith. Finally, it was not necessary for the applicant to have carried out extensive business activities under the sign in question and to have a reputation for it in Europe.

 (EUIPO BoA, decision of 24.1.2023, R 639/2021-4)

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Consideration of belatedly submitted grounds for opposition (EUGC)

In this recent decision, the EUGC dealt with the question of whether the EUIPO may deal with the existence of a likelihood of confusion even in the case of a sole assertion of double identity.

In the underlying opposition proceedings, Hacker-Pschorr Bräu GmbH had taken action against the application of the trade mark "HACKER SPACE" from its word marks "HACKERBRÄU", "HACKER" and "HACKER-PSCHORR" as well as the word/figurative mark shown below. The opponent exclusively pleaded double identity, but not likelihood of confusion, within the scope of the online form of the EUIPO.

After being invited to submit further evidence on the opposition marks, the opponent also claimed a likelihood of confusion in its supplementary statement. After the Opposition Division partially upheld the opposition on the ground of likelihood of confusion, the Board of Appeal annulled the decision to that extent, since the opponent had not invoked likelihood of confusion when filing the opposition and there was obviously no double identity. A subsequent extension of the grounds for opposition was no longer possible at the latest upon expiry of the opposition period.

The action brought by the opponent against this was unsuccessful. Any argument as to why the opposition should obviously also have been based on a likelihood of confusion and why this should therefore have been taken into account by the Office in good faith as a ground for opposition was unsuccessful before the EUGC. In particular, the likelihood of confusion was not included in the ground of opposition of double identity.

The judges agreed that the EUIPO examination guidelines generally provide that a likelihood of confusion must be examined if the only ground for opposition claimed, namely double identity, is not present. However, they found the guidelines not to be legally binding. The Office's decisions must be based exclusively on the provisions of the EU Trade Mark Regulation and their interpretation by the case-law. The EUGC held that this was not precluded by any additional burden on the Office due to the necessity of further (invalidity) proceedings. The refusal was therefore justified.
(EUGC, judgment of 1.2.2023, T-349/22)

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Distinctiveness of the sign "420/7" (EUIPO)

The EUIPO Board of Appeal recently ruled on the distinctiveness of the sign "420/7" for e.g. cannabis for medicinal purposes, cannabis plants, seeds for growing weed and tobacco. The Office had previously refused the application on the grounds of an offence against public policy and morality. In its appeal against this, the applicant claimed that it had not been sufficiently explained why the element "420" constituted a code word for "cannabis" and that the examination had been improperly limited to this element.

The Board of Appeal upheld the appeal and remitted the case back to the examiner for re-examination, where the application was then refused on the grounds of descriptiveness and lack of distinctive character. The sign was understood as a descriptive indication of cannabis available 7 days a week. The applicant also appealed against this decision.

The Board of Appeal now dismissed the appeal as unfounded. The element "420" is understood by the general public and the relevant specialist public as a reference to cannabis and the element "/7" to daily availability. For the goods claimed, which were either cannabis or closely related to it, the sign did not go beyond the descriptive effect, so that the sign lacked distinctive character.

The previous official decision, in which the examiner had refused the application solely on the grounds of an infringement of public policy and morality, had no binding effect. In particular, it could not be inferred from it that a final decision had been taken on the (non-)existence of certain grounds for refusal. Overall, the application had therefore been rejected without any error of law.
(EUIPO BoA, decision of 24.1.2023, R 1689/2022-1)

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Likelihood of confusion between "SFR SPORT 1" and "sport1" (EUGC)

The EUGC had to decide on the likelihood of confusion between the marks "SFR SPORT 1" (application mark) and "sport1" (opposition mark) shown below. The decision of the Opposition Division granting the opposition was annulled by the Board of Appeal - there was no likelihood of confusion between the signs. The opposing party's action against this was now partially successful.

The court first confirmed the assumption of a comprehensive similarity of goods and services. However, in the context of the comparison of the signs, the Board of Appeal erred in law by not sufficiently taking into account the increased distinctiveness of the opposing mark through use. The Board of Appeal's assumption that the public would understand the elements 'sport' and '1' as mere generic indications did not have the effect of weakening the distinctive character. Due to the increased distinctiveness of the opposing mark through use, the public would recognize the opponent's sign "sport1" in the contested mark.

Furthermore, according to the judges, the finding of an enhanced distinctiveness cannot be diminished by other factors. At least for the identical goods and services for which the opposing mark claims an enhanced distinctive character, a likelihood of confusion had therefore to be found after an overall assessment, despite a rather weak similarity between the signs. The decision of the Board of Appeal should be annulled to that extent.
(EUGC, judgment of 8.2.2023, T-141/22)

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Registrability of "ULTRA" (EUIPO)

Anheuser-Busch LLC is the proprietor of the EU trade mark "ULTRA" shown below, protected for beer in class 32. Amstel Brouwerij B.V. filed an application for invalidity against this trade mark in 2020 on the grounds of lack of distinctive character. The Cancellation Division rejected the application in 2021.

The applicant's appeal was unsuccessful. The Board of Appeal now found that the term "ULTRA" was distinctive without a reference word, as no concrete message was conveyed by the sign. There was no laudatory or otherwise positive effect for the claimed product "beer". Nor had the applicant succeeded in proving such an effect through third party uses occurring on the market, as the term "ULTRA" was never used in the sole position in the evidence submitted, but always with a reference word. Nor is anything to the contrary apparent from the earlier decisions of the EU General Court and of the EUIPO concerning the sign element 'ULTRA', as the term is always used there in combination with a reference word.

As a vague term which does not convey a concrete meaning to the public in relation to the goods claimed, the sign is not descriptive and is distinctive. The decision of the Cancellation Division was therefore not objectionable.
(EUIPO BoA, decision of 24.1.2023, R 2088/2021-5)

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Likelihood of confusion between "SkyBoxing" and "SKY" or "SKY BOX" (BPatG)

In 2014, a German private individual applied for registration of the sign "SkyBoxing", shown below, at the German Patent and Trademark Office (DPMA) for various services in Class 41. Sky International AG filed an opposition against this on the grounds of likelihood of confusion with its two earlier EU word marks "SKY" and "SKY BOX".

The Opposition Division of the DPMA rejected the oppositions. The opposing services were at least highly similar. However, the meaning of the two signs would lead to a different understanding by the public. In particular, the opposition mark "SKY BOX" would not be understood as a reference to the English verb for "box". Any increase in the distinctive character of the opposing mark is irrelevant.

The opponent's appeal against this before the German Federal Patent Court (BPatG) was now successful. According to the judges, it was true that there was no relevant visual similarity of the signs due to the design of the trade mark applied for. However, an above-average phonetic similarity could be found, especially since the word element characterizes the overall impression. The sign applied for would be perceived by the public as two words because of the internal versal. The element "boxing" is understood as descriptive, which is why the public concentrates on the element "sky", which is identical to the opposing mark. This led the judges to come to the conclusion of an above-average phonetic similarity and, after an overall assessment, to the assumption of a likelihood of confusion between the signs at issue.
(BPatG, decision of 20.12.2023, 28 W (pat) 16/20)

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Infringement of a shape mark by model cars (OLG Hamburg)

The Hanseatic Higher Regional Court (OLG Hamburg) ruled on the infringement of Volkswagen AG's 3D trade mark shown below on the left (hereinafter "Bulli" trade mark), protected amongst other goods for model cars in class 28, by the model vehicles distributed by Model Car World GmbH, shown below on the right. The defendant was formerly itself a licensee of the plaintiff and continued to distribute the model cars in dispute after termination of the license agreement.

The core of the proceedings was, in addition to the genuine use of the trade marks, in particular the question of whether the sale of model cars constituted use infringing trade mark rights. As a result, the OLG overturned the first-instance decision and awarded the trade mark proprietor a claim for injunctive relief and comprehensive follow-up claims.

Comments on use preserving rights: First, the OLG had to deal with the question of genuine use of the trade mark. Such use was still denied by the Regional Court in the first instance decision, also with the argument that the license agreement at issue here obviously could not cover the subsequently registered trade mark. The OLG now held differently: It was clear from the contract that the shape of the Bulli as such was also the subject of the license, which is why the use by the defendant could be attributed to the plaintiff.

Comments on the use indicating origin: Contrary to the opinion of the Regional Court of Hamburg, the evaluations of the "Opel-Blitz II" decision of the Federal Supreme Court (judgement of 14.1.2010 - I ZR 88/08) were not transferable to the present constellation. In "Opel-Blitz II", the BGH had assumed that faithful replicas of vehicles did not (also) have an indication of origin function, as the connecting factor of the traffic's idea of origin was motor vehicles and not toys.

The OLG now contradicted this. After all, a different assessment would have the consequence that a shape mark registered (also) for toys or model goods would always have a gap in protection from the outset. A right-preserving use could never be achieved by true-to-original replicas if one argued that the public would only take an indication of origin from the replica for the replicated original product.

Accordingly, use as a trade mark exists if the public can get the impression that the goods are authorized. In this respect, the respective specific customs of the industry had to be taken into account. In the automotive industry, the public had long been accustomed to recognizing an indication of origin in the external shape of vehicles. Manufacturers therefore endeavored to create characteristic features with an identity-creating function by means of consistent design features typical of the manufacturer. This also applied to toys in Class 28.

Surveys of the public also showed that the public regularly took the shape of model cars as an indication of origin. Furthermore, the public assumed that the production and sale of such true-to-the-original model cars required a permit or license from the original vehicle manufacturer. In this respect, the principles developed for merchandising articles were to be applied.

In any case, there was a likelihood of confusion between the 3D mark and the vehicle models. In addition, there was also a claim based on protection of reputation.

Finally, the defendant had no legitimate interest in using the 3D mark without consideration. In particular, the defendant could not rely on a "legally secured exception" that had existed for 20 years. The model area, as a representation of reality, was also not a (trade mark) legal vacuum. The effects of the shape mark should not be undermined by such objections that would ultimately render the trade mark protection null and void.
(OLG Hamburg, judgment of 26.1.2023, 5 U 61/21)

Note: Incidentally, the Cologne Higher Regional Court (judgment of 29.4.2022, 6 U 178/21) recently ruled exactly the opposite in a case concerning faithful reproductions of a DACHSER truck and a DACHSER warehouse. The Higher Regional Court of Cologne found that the two models did not infringe the trade mark either due to a likelihood of confusion or due to exploitation of reputation. According to the court it was true that the model manufacturer profited from a possible good reputation of the brands taken over due to the increased attractiveness and the resulting incentive to collect. However, this was inevitably connected with the reproduction of objects existing in reality. If the manufacturer, in reproducing the trade mark without advertising surplus, limited himself to a faithful reproduction in detail, this would affect neither the function of origin nor the function of guarantee due to the special public expectation and the customary practice in the field of model making. The touching of the advertising and communication function, if any, was not unfair.

When comparing these two decisions, however, it must be taken into account that the proceedings before the Cologne Higher Regional Court did not involve a shape mark but a pure word mark, which, moreover, was not protected for toys and model goods in Class 28. Nevertheless, the respective statements on the perception of true-to-the-original replicas of reality by the public partly contradict each other.

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Likelihood of confusion between "U UNISKIN by Dr. Søren Frankild" and "UNICSKIN YOUR EFFECTIVE SOLUTION" (EUGC)

The EUGC had to decide on the likelihood of confusion between the signs "U UNISKIN by Dr. Søren Frankild" (trade mark applied for) and "UNICSKIN YOUR EFFECTIVE SOLUTION" (opposing trade mark) shown below, each claiming cosmetic goods in Class 3.

After the Opposition Division and the EUIPO Board of Appeal had already assumed a likelihood of confusion between the signs, the EUGC has now also confirmed the likelihood of confusion: The element "U" of the sign applied for, which is perceived as a single letter, is recognized by the public as a mere repetition of the first letter of the word "UNISKIN", and "UNISKIN" alone is therefore a distinctive element of the sign applied for. This is contrasted with the distinctive element "UNICSKIN" of the opposing mark.

Contrary to the applicant's argument, the judges held that the opposing mark has average distinctiveness, as it is not understood by the relevant Spanish public as being descriptive in the sense of 'unique skin'. Even if one assumes such an understanding by the public despite the incorrect spelling, "unique skin" has no concrete descriptive meaning.

The court found that the elements "unicskin" and "uniskin", which are thus opposed to each other, are almost identical. The only relevant elements for a phonetic comparison of the signs showed a high degree of phonetic similarity. It was to be assumed that a considerable part of the Spanish public would recognize the signs as mere fanciful terms and would not derive any meaning from them. Moreover, for a certain part of the public, which perceives the signs as indicating a reference to skin, there is an average conceptual similarity between the signs. The Board of Appeal did therefore not err in law in finding that there was a likelihood of confusion.
(EUGC, judjment of 8.2.2023, T-787/21)

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Forfeiture - HEITEC III (BGH)

Following the preliminary ruling of the CJEU of 19.5.2022 (C - 466/20), the German Federal Court (Bundesgerichtshof, BGH) now dealt with questions of forfeiture of the enforcement of rights in the "HEITEC" case.

Background: Heitec AG took action against the application for and use of an EU trade mark with the word element "heitech" by Heitech Promotion GmbH using its trade marks "HEITEC". In response to the trade mark proprietor's warning, the applicant proposed the conclusion of a coexistence agreement.  The trade mark proprietor then filed an action for an injunction.

The Nuremberg Higher Regional Court, as the court of appeal, assumed forfeiture because the trade mark proprietor had not taken sufficient measures to stop the use of the sign "Heitech" within a period of five years, knowing of the defendant's uninterrupted use of the sign. The BGH, which was hearing the case in the appeal proceedings, then referred a number of questions to the CJEU for a preliminary ruling. The CJEU ruled that a serious judicial assertion is required for the interruption of acquiescence. Without a legally binding solution, a mere warning does not end the estoppel. (For details and a discussion of the CJEU ruling, see Engage).

Decision of the BGH: The BGH now rejected the appeal. The asserted claims for injunctive relief and subsequent claims were forfeited. According to the findings of the Court of Appeal, which were free of legal errors, the use of the sign "Heitech" by the plaintiff had been tolerated for a period of five consecutive years.

In order to avoid forfeiture, it is necessary for the proprietor of the earlier trade mark right to take measures which clearly express his intention to oppose the use of the sign and to remedy the alleged infringement of his rights. Such efforts must also show sufficient consequence. Neither a warning nor a document initiating proceedings are sufficient in themselves to end acquiescence. If, due to a lack of diligence, the document initiating the proceedings is not brought into compliance with the formal requirements in due time, a clear and serious intention to pursue legal action must only be assumed once the deficiencies have been remedied.

The appeal's argument that a new five-year forfeiture period had always been set in motion by the further acts of infringement carried out since the warning notice was also unsuccessful. The Federal Supreme Court's case law on forfeiture under Section 21(4) of German trade mark law (MarkenG) in conjunction with Section 242 of German Civil Code (BGB), according to which repeated similar trade mark infringements that occur intermittently each time trigger a new claim for injunctive relief and cause the forfeiture period to start anew and, in the case of continuous acts, to be based on the beginning of the first use, cannot be applied to the present case of forfeiture under Section 21(1) and (2) MarkenG.

The forfeiture according to the principle of good faith as a case of inadmissible exercise of rights due to contradictory conduct is based on such case constellations in which the infringer has no own sign right position and trusts that the proprietor of the right will not enforce his sign right opposing the use. The forfeiture provisions of Section 21 (1) and (2) MarkenG, on the other hand, serve to balance the interests of two sign owners. Thus, the proprietor of a younger sign should be allowed to continue using it if the proprietor of earlier rights has not enforced them during a period of five consecutive years of use of the younger sign. The proprietor of the younger sign acquires a de facto right of continued use for all similar forms of use made during the five-year period of acquiescence.
(BGH, judgment of 26.1.2023, I ZR 56/19)

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Bad faith of a trade mark application (BPatG)

In a recently published decision, the German Federal Patent Court (BPatG) ruled on the bad faith of the application for registration of the sign "Kosmetiksalon Babette, Bar Babette, Bar in der Karl-Marx-Allee". The word mark registered for the operation of a bar in class 43 had to be declared invalid and cancelled due to bad faith, according to the court. With its decision, the BPatG overturned the previous decision of the German Patent and Trade Mark Office (DPMA) according to which the application had not been filed in bad faith.

The BPatG held that the application would obviously refer to the building located in Karl-Marx-Allee, which is known as "Kosmetiksalon Babette" and listed under this name in the Berlin register of historical monuments, and that it was made in bad faith. The judges found that it was obvious that the applicant wanted to continue the bar operated in above mentioned building under the same name at another location after the expiry of the lease contract with the buildings owner in order to maintain the customer base. However, according to the court, this was not a legitimate measure to promote the applicant's own competitive situation, as previously assumed by the DPMA.

Rather, the application had been filed with the intention of impairing the competitive development of third parties. The BPatG found that the bad faith was shown in particular by the fact that not only (as it would normally be the case) the establishments name "Bar Babette" or "Kosmetiksalon Babette" was applied for, but rather more both designation alternatives in combination with the specific address. It seemed obvious to the judges that the applicant wanted to monopolize all designations connected with the building in order to deprive subsequent tenants of designation possibilities. A self-interest outweighing this blocking effect had not been recognizable. Also, the address designation contained in the trade mark was misleading for the continuation of the premises at another address, so that the sign was no longer suitable as a sign after the expiry of the lease.

Lastly, a possible intention to offer the trade mark for sale to a future lessee was also abusive of rights, as from the outset, it aimed at coercing third parties to purchase it.
(BPatG, decision of 19.5.2022, 25 W (pat) 47/21)

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Likelihood of confusion between "FRITTZ" and "FRITZ" (BPatG)

In a recently published decision, the German Federal Patent Court (BPatG) ruled on the likelihood of confusion between the two word/figurative marks "FRITTZ" and "FRITZ" shown below.

In accordance with the German Patent and Trademark Office (DPMA), the court now assumed that there was a likelihood of confusion between the signs. The potato-based snacks claimed by the application mark were in the highly similar range to the goods claimed by the opposing mark, including bakery and confectionery products.

Irrespective of the specific graphic design, the judges confirmed that only the word elements had to be taken into account. In any event, the opposing signs were phonetically identical, since even if it were assumed that the public would not recognize the double letter 'TT' represented by stylized French fries as such, the sign applied for would still be pronounced by the public as 'FRIZ'.

(BPatG, decision of 8.12.2022, 30 W (pat) 514/21)

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Disclaimer: Please note that the decisions included in this newsletter are a subjective selection of relevant trademark decisions made by the authors without any claim to completeness.