For the half-year to 31 December 2014, the IPKat's regular team is supplemented by contributions from guest bloggers Rebecca Gulbul, Lucas Michels and Marie-Andrée Weiss.

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Wednesday, 3 November 2010

BGH: if it looks the same, it must have the same quality

An interesting case was decided by the German BGH on 15 April of this year (the grounds for the decision only became available on 29 October). The plaintiff Waldemar LINK GmbH & Co. KG had marketed since 1982 a femur prosthesis (hip replacement) under the brand "SP II". This femur prosthesis has a characteristic S-shape (see red line in the image, for nit-pickers, from this angle it's an inverted S-shape) that has many benefits and was covered by a patent that expired. It is very successful and enjoys a high reputation for quality in the market. After expiration of the patent, a competitor started selling a hip replacement under the label "AS PLUS" which resembles very closely the "SP II" model of the claimaint.

Waldemar LINK GmbH & Co. KG brought suit against the competitor based on unfair competition. Both first instance courts (LG and OLG Hamburg) dismissed the claims.

There was no likelihood of confusion between the products because of the different signs ("SP II" versus "AS PLUS") they were marketed under.

While the SPII product enjoyed "wettbewerbliche Eigenart" (I will not try to translate this concept), this could not form the basis for an injunction given the technical necessity of the form (para. 22).

Post-sale confusion was also ruled out under the particular circumstances; a surgeon is expected to carefully plan an operation and is highly unlikely to just take the "wrong" prosthesis simply because it looks similar (I certainly hope so! Those interested can find a guide on how to implant the replacement here - don't do this at home, lawyers.).

But, and here it gets interesting, the BGH held that (para. 51):

Da der gute Ruf des Produkts der Klägerin auf dessen Qualität beruht, wird er unangemessen beeinträchtigt, wenn ein nahezu identisches Produkt nicht denselben oder jedenfalls im Wesentlichen denselben Qualitätsmaßstäben genügt, die der Originalhersteller durch seine Ware gesetzt hat.

I'll try a translation:
Because the good reputation of the plaintiff's product is based on its quality it is inappropriately impaired when an almost identical product does not meet the same, or at least essentially the same, quality standards that the manufacturer of the original product has set by his product.

Because the lower court had not made any findings on the quality of the competitor's product, the case was sent back for additional findings.

In other words: you can market a product that looks very similar to the market leader, but only if it in fact is very similar (quality-wise) to the market leader. A very interesting development, and it reminds me of the thesis advanced by Roland Mallinson (Taylor Wessing) and Andreas Lubberger (Lubberger - Lehment) at the MARQUES Conference in Berlin that if a look-alike creates an association with a market leader, this is a form of comparative advertising and as such only permissible if the products are indeed comparable - also quality wise. And suddenly, courts have to go on a fact finding mission regarding the quality of look-alikes...


4 comments:

mcvooty said...

That doesn't sound right. Once a patent expires, anyone ought to be able to make the invention of whatever quality. And comparative advertising doesn't have to be between products of equal quality.

Birgit Clark said...

"wettbewerbliche Eigenart".... how about "competitve uniqueness"? This is in the context of Article 4(9) UWG, isn't it. Very interesting decision.

Anonymous said...

Maybe there's a new market for Lego...

Anonymous said...

I, of course, realize that the German courts are not bound by U.S. law or the reasoning of its courts. However, how can the reasoning that was used here be considered to be sound in view of the counterarguments that prevailed in TrafFix Devices, Inc. v. Marketing Displays, Inc.?

A feature that is functional and protected by patent long enough to be associated in the minds of consumers with the patent owner, can then become protectable as a quasi-trademark of the patent owner, potentially in perpetuity? In addition, the quasi-trademark right does not extend to precise copies of the functional features, but only to 'poor' copies of those functional features?

If a look-alike creates an association with a market leader due to functional limitations, how does requiring that the product be comparable, particularly quality wise, foster compeition? Quality is not an unbounded good, and there can be rational reasons to trade off quality in view of factors such as price.

Completely bizarre...

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