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Friday, 10 July 2015

Were the condoms "made in Germany" and why does it matter?

One of the more vexing questions in product marking is the circumstances in which a product may describe itself as having been “made in” a given place. This Kat previously tackled the issue in the context of national legislation in Switzerland regarding the use of “Swiss made” with respect to the manufacture of watches (“Do you know now much Swatch is in your watch?”). There, it was pointed out that such a designation does not mean that 100% (indeed, maybe only as little as 50%) of the watch components need actually be made in Switzerland. A similar question was raised in the German courts, reaching the Bundesgerichtshof, in its Decision of 27 November 2014 (I ZR 16/14), "CONDOMS - Made in Germany". The IPKat is grateful to Silke Freund, of the Munich office of Katfriends Boehmert & Boehmert, for recently summarizing this decision in English ("Use of the indication 'made in Germany', in the era of global division of labour"). What follows is this Kat's understanding of the decision and its implications.

At issue was a claim for unfair competition regarding the use of the designation “CONDOMS --  made in Germany." The Bundesgerichtshof rejected the defendant’s complaint against the denial of leave to appeal and upheld that the designation “Made in Germany” was improper. It noted that the mere fact that the making of a product is the result of a “division of labour” among several countries is not of itself determinative, since the modern consumer does not expect that 100% of the manufacture of a product will necessarily take place in a single country (in this case, Germany). What then was required to state that the condom product was “Made in Germany”? The answer is that, for the designation to be accurate, the quality and characteristics of a condom deemed by consumers to be essential must have taken place in Germany. The Court identified the essential characteristics with respect to a condom as impermeability and tear-resistance. As such, the question is where the process of manufacture that confers on the condom product these essential characteristics has occurred.

The Bundesgerichtshof noted that the defendant was supplied with the natural rubber latex condom product, appropriately shaped, from outside of Germany. The defendant then individually sealed the condom product in foil packaging, to which it added certain required markings. The sealed items are then appropriately packaged together with printed instructions for use. In this connection, the defendant carries out in its own laboratories batch quality control tests on randomly selected products, in accordance with German DIN-standard regulations. These tests determine, inter alia, whether the products meet the standard for both impermeability and tear-resistance. The defendant advertises the product on-line that meet these quality criteria by using the designation—“CONDOMS—Made in Germany.” Against this background, the Court affirmed that the condom products at issue could not claim to be “made in Germany.” This is because while the sealing, packing and quality control of the product had been carried out in Germany, all the actual manufacturing process had taken place outside of Germany. Under such circumstances, the product was not “made in Germany.”

The Bundesgerichtshof ruled that Article 24 of Regulation 2913/92 (the Customs Code) was not to the contrary. By Article 24:
“Goods whose production involved more than one country shall be deemed to originate in the country where they underwent their last, substantial, economically justified processing or working in an undertaking equipped for that purpose and resulting in the manufacture of a new product or representing an important stage of manufacture.”
With respect to the condom product at issue, Germany did not satisfy the requirement of being the country of origin. Adherence to the quality standards set under German law had no impact on whether the product in question had made in Germany. The term “hergestellt in Deutschland”/ “made in Germany” means exactly what is says, namely that the process of manufacture had taken place in Germany.

The result of this case seems reasonable, based on the legal standard as described. That said, this Kat does wonder whether the issue of quality in accordance with the German national standards should be so easily dismissed. After all, it is presumed that the defendant sought to claim that its condom product is “made in Germany” not solely because of its geographic provenance but because such provenance itself connotes an assurance of high product quality. This Kat wonders how that consideration is brought to bear under Germany law.

Decision of the OLG Köln here
Decision of the Bundesgerichtshof here

5 comments:

John L. Welch said...

I don't feel that it makes a vas differens.

CEN said...

The manufacturer could've marketed the product easily along the lines "tested for quality in Germany" or "aocording to DIN standards" etc. They would not need to refer to the product as being "made" in Germany. Therefore, I think the judgement is correct.

Roufousse T. Fairfly said...

Part 1/2

How ironic...

The expression "made in Germany" was originally perceived to be of a badge of shame imposed by the UK Merchandise Marks Act 1887, in order to clearly differentiate counterfeit cheap foreign imitation, and prevent a certain budding industrial power on the continent from freeloading on the reputation of domestic suppliers.

This Act is quite probably the reason why the manufacturing place came to be usually given in English.

S. 16(1): All such goods, and also all goods of foreign manufacture bearing any name or trade mark being or purporting to be the name or trade mark of any manufacturer, dealer, or trader in the United Kingdom, unless such name or trade mark is accompanied by a definite indication of the country in which the goods were made or produced, are hereby prohibited to be imported into the United Kingdom, and, subject to the provisions of this section, shall be included among goods prohibited to be imported as if they were specified in section forty-two of the Customs Consolidation Act 1876.

From the footnotes:

The marking of goods with the names of places in this country, whether as the address of a manufacturer or alone, will be an offence against the section, but as the illegality of the mark arises from its falseness, this false character will be removed by the addition of a definite indication of the place or country in which the goods were produced; as, however, the simple addition of the name of a foreign place to the English address, such as London and Paris, would not indicate in which place the goods were made, it will be necessary, in order to comply with the section, that a definite statement should be added, such as “manufactured in Germany,” to indicate the origin of the goods.

With regard to direct false indications of origin the matter is simple enough. If knives are imported marked Sheffield when they have been manufactured in Germany, it will be evident that a fraud has been committed.

But in the case of indirect indications of the matter is not so simple. The use of the English language in descriptive expressions such as “superfine make” on a label applied to goods coming from a foreign-speaking country is undoubtedly, under the Act, a false indication of manufacture in the United Kingdom, and so possibly would the use of single words, such as “patent,” “registered,” or “warranted,” or English measures, such as yards, feet, inches, dozens, or any usual abbreviations of such words. In the event of such words being applied to goods, a counter-statement as to manufacture abroad should be added to secure the goods from detention.

Similarly, any words which might imply manufacture by English firms, such as “& Co.,” would bring any goods so labelled within the section if the goods came from foreign-speaking countries, and would also require a definite indication of manufacture abroad.

In addition to these indications of British manufacture, there are many other words used on goods in other languages which might be false or not according to the country from which they are imported. Such words, for instance, as “Mode de Paris,” on goods brought from Germany would clearly be a misdescription, but such words would be legal if the goods came from France. This is in exact accordance with the law at present existing in France on the subject.

Roufousse T. Fairfly said...

Part 2/2

I gather that timepieces were the burning issue of the day:

Under these regulations, watch cases made abroad and sent to this country for assay, and marked with the new hall marks applicable to foreign watch cases, will be allowed to be re-imported, provided the watch inside bears no mark, as in that case the hall mark showing the foreign origin of the watch case will equally apply to the movements, and the article, when sold, will be evidently a foreign-made watch, and no purchaser need be deceived.

[...]

Should the watch case be of English make and genuinely marked, and have been sent abroad for the purpose of being finished, or for any other cause, the usual proof of the exportation must be produced to show that they are British returned goods.

[...]
When watch cases are imported with the watches in them, and the cases are unmarked, or are marked with the proper foreign assay mark, or with the British assay mark as placed on watches made in this country, but, in addition, an equally conspicuous statement that the movements were made abroad, either above or below the assay mark, and there are no marks on the works indicative of manufacture in this country, then the watches would not be liable to detention.


Replace "Assaying" in 1887 by "Quality Control" in 2015, and think of "counterfeit watches", and consider the questions of passing off, geographical indications, and the determination of the provenance goods of composite origin, then you'll surely think: Plus ça change...

Anonymous said...

Your readers are a bit slow. We've had the "vas deferens" joke, but no-one has discussed the weakness of the defence argument and brought out the time honoured line "it will never stand up in court."

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