In a notable decision of 26 February 2009 (case reference I ZR 219/0 “Thermoroll”) - which was only recently published in its entirety - the German Federal Supreme Court (BGH) decided that it is “significantly misleading” and consequently an unfair commercial practice under section 5 German Unfair Competition Act, if someone uses a trade mark in conjunction with the ® symbol without being the owner or licensee of the mark or without being otherwise authorised. Things may be judged differently only if the unauthorised user is the proprietor mark of a trade mark that is similar to the trade mark that was used together with ® symbol and use of the mark amounts to “genuine use” of the registered mark under Article 26 (3) German Trade Mark Act.
The facts of the case are a rather complicated and may be simplified as follow: both parties, the claimant and the defendant, were companies active in the field of curtains and blinds and involved in a dispute over the use of the mark Thermoroll. To make things even more complicated, the mark Thermoroll was a registered trade mark which, inter alia, covered blinds, curtains, but which was owned by third party that was not involved in the court case. The claimant, however, was the owner of a trade mark registration for the similar mark Termorol [IPKat: minus the “h” and with one “l” only] but had [for valid reasons which we will not mention since they would confuse matters further] used advertising material that included the sign Thermoroll together with the symbol ® before February 2006 even though it (the claimant) was only licensed to use Thermoroll from February 2006 onwards. The defendant filed counterclaims for information and damages against the claimant arguing that that the use of the mark Thermoroll in combination with the ® symbol constituted misleading advertising under section 5 of the German Unfair Competition Act.
The Higher Regional Court of Karlsruhe, the court of appeal, had decided in favour of the claimant and had taken the view that the slight differences in the spelling of the marks (Thermoroll v Termorol) were not significant enough to mislead consumers and so fell out of the ambit of the Unfair Competition Act.
On further appeal, the BGH disagreed with the Karlsruhe court and decided that the claimant’s unauthorised use of the mark “Thermoroll®” before 16 February 2006 constituted misleading advertising. The fact that the claimant had been authorised to use the similar mark “Termorol”, which was registered for identical goods, did not change that its use of the “Thermoroll” mark was misleading.
The court held that the use of a trade mark used together with the ® symbol suggested two things to the relevant consumers: firstly, the existence of a registered trade mark spelled exactly as used in the advertising and secondly, that the advertiser was authorised to use this mark in its advertisement, either as trade mark owner or licensee.
The court took the view that use of a third party trade mark which not merely “insignificantly” differed from the advertiser’s own trade mark was caught as an unfair practice under unfair competition law. The differences between both marks could only be considered as insignificant if the mark used merely differed in elements which did “not alter the distinctive character of the mark in the form in which it was registered” as stipulated by Article 26 (3) German Trade Mark Act. Article 26 (3) German Trade Mark Act relates to “genuine use” of a trade mark.
Applying these principles, the court decided that use of “Thermoroll” did not constitute genuine use of “Termorol” mark under Article 26 (3) German Trade Mark Act due to the aural and conceptual differences between both marks and due to the fact that the relevant consumer would associate prefix “Therm-” with heat. Consequently, the differences between he marks altered the distinctive character of the registered mark and had therefore crossed the threshold of an “insignificant alteration”.
Given the claimant itself had considered the “Thermoroll®” mark as very important and had expected that its use would have a positive effect on consumers, it had obtained a competitive advantage by implying to be authorised to use the third party trade mark. The court found that the relevant consumers had been mislead and had taken a purchasing decision that they would otherwise not have taken. The court emphasised that it was a main purpose of prohibiting misleading practices to prevent competitors from using false information in the course of trade.
IPKat comment: the BGH provides us with some food for thought. The “take home” point appears to be that advertisers should make sure to use the mark as registered when using it in combination the ® symbol. Otherwise, in cases where the use of the similar mark crosses the threshold of an “insignificant” alteration, there is a genuine risk of falling within the ambit of Unfair Competition Law. In other words: using the ® symbol in combination with a registered trade mark in the course of one’s business (i.e. in advertising) without being authorised to use the mark will be seen as significantly misleading and consequently constitute an unfair commercial practice under the German Unfair Competition Act.
This Kat would be very interested in our readers’ views.