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Eccentric teeth: sharpening up the passing off rules in Germany

18-12-2015

Jens Künzel

German unfair competition rules on passing off continue to be relevant in practice. It is not uncommon for a company to miss filing a design or patent covering a product, but it may be able to later file an unfair competition claim against a competitor if it believes its product has been copied.

Usually an original product enjoys some recognition with the relevant public, based on design features that set the product apart from comparable products. In that situation, German courts regularly award claims for an injunction if the targeted product copies or makes use of the design features so that there is a sufficiently high likelihood that the public is deceived about the origin of the product.

In rare cases, the original product largely consists of technical features, and sometimes those technical features have been protected by a patent that has expired. Such a case was decided by Germany’s Federal Supreme Court (Bundesgerichtshof) in September. It concerned devices used for fixing electric cables. These devices feature so-called eccentric teeth, with which cables or cable ducts are fixed. After the patent expired, the defendant (name not publicly available) offered devices that were very similar, if not identical, to the original products.

The court, which named the decision Eccentric teeth, had the chance to affirm and refine its case law on passing off concerning technical products where the original device had once been covered by a patent which had then expired. First, the court confirmed that the expiry of the patent is not in itself a reason to deny claims for passing off. The court expressly held that unfair competition claims regarding technical products once covered by a patent may not be denied by arguing that by doing so the expired patent would de facto be extended through unfair competition law.

In contrast to patent law, passing off was intended to cover a competitor’s actions that are capable of deceiving the public or unfairly exploiting the reputation of a product. If after the expiry of a patent such actions constitute unfair competition, a claim may not be denied simply because the patent has expired.

The court went on to describe and refine the requirements for a claim of passing off in such a situation. First, the technical features which the plaintiff cites in order to establish the ‘originality’ of his product must not be technically necessary for the kind of product in question. They are necessary if the product cannot be manufactured or properly be marketed without these technical features. If so, every company shall be free to make use of them after the patent has expired, since these features count as prior art.

If the relevant technical features are not compulsory, but may be substituted with alternative features, then unfair competition claims can be based on passing off if these features have been copied. Competitors cannot claim a legitimate right to copy such product features that are the basis of a competitor’s product’s success and reputation if those features can be freely changed without any harm to the product. But there is an important exception to this rule.

"In contrast to patent law, passing off was intended to cover a competitor’s actions that are capable of deceiving the public or unfairly exploiting the reputation of a product."

Since the relevant technical features, even if they are not strictly necessary from a technical point of view, constitute prior art and are not subject to patent protection, a competitor may copy those technical features only if it can establish that these features constitute an ‘appropriate’ solution to a technical problem.

The significance of the Eccentric teeth ruling is that this last exception shall not be available to a defendant if the technical features have been copied to an extent that the whole product is an identical copy of the original. Here, the court for the first time recognised that the defendant—which is free to change the technical features and is not compelled to use exactly the features of the copied original—must choose another appropriate technical solution if a deception of the public cannot be avoided otherwise.

The resulting standard test in cases of passing off technical products, with its system of basic rules and exceptions and counter-exceptions, is quite complicated. The solution in a given case therefore largely depends on its particular facts.

Jens Künzel is a partner at Krieger Mes & Graf v. der Groeben. He can be contacted at: jens.kuenzel@krieger-mes.de 

Jens Künzel, eccentric teeth, passing off, unfair competition, Germany’s Federal Supreme Court,

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