21 March 2018TrademarksJens Künzel

WIPR Leaders 2018: Germany trademark practice update

Arguably no other decision in the trademark sector this year has stirred up emotions among practitioners in Germany as much as the Federal Supreme Court’s judgment in the case Perfume Trademarks, rendered on November 9, 2017. At issue is the appropriate court venue for cases where the defendant has committed several potentially infringing actions in different locations, including in different countries (article 97, paragraph 5 of EU Regulation No. 207/2009). In essence, this decision, in conjunction with the Court of Justice of the European Union’s (CJEU) earlier decision in Nintendo v Big Ben Interactive (C-24/16), will make it much harder for owners of EU trademarks (and Community designs) trying to enforce their rights before German courts for alleged infringements on websites directed at potential German buyers, or in emails sent from other European countries to interested parties in Germany.

In Nintendo, the CJEU developed the rule that if a defendant has committed several potentially infringing actions in several EU member states, the courts must evaluate the overall context in order to determine the one place at which the initial infringing action, to which the infringement as a whole can be traced back, was committed or was imminent. In order to determine the appropriate court venue the location of a single infringement action is not decisive; the courts rather have to evaluate the broader picture in order to determine where the infringement originated.

The two potentially infringing actions in the Perfume Trademarks case, which the lower courts had to evaluate, were—first—a potential offer of a perfume under the trademark on a website with the top-level domain .it that could be accessed from Germany, and whose text was also written in German, and—second—an email sent from Italy to Germany to which was attached a price list with several perfumes under the trademark in question.

Germany’s Federal Supreme Court said that if the internet offer were to be taken as the “location of initial infringement”, the location where the infringement was committed was where its publication originated. In this case, this location was said to be outside Germany because there was no indication that the website was managed in Germany. If the email were to be taken as the connecting factor, the location where the infringement was committed was Italy because the defendant sent the email from Italy.

In contrast, the Federal Supreme Court upheld the lower courts’ reasoning that with respect to an internationally registered (IR) trademark, and on the same set of facts, German courts were competent to hear cases of potential infringement. That result is possible since the international competence of courts to hear cases of infringement of IR trademarks is subject to the Brussels Convention (article 5, number 3 of the Brussels I Convention, and article 7, number 2 of the Brussels Ia Convention). Pursuant to the applicable provisions of this convention, the relevant location is either where the infringement was committed or where the infringing damage was incurred. According to CJEU’s decision in Coty Germany v First Note Perfumes, under the regime of the Brussels Convention, any infringement of a trademark may be brought before a court at either location.

This reasoning also applies to Community designs and German national design rights in that the proper court venue for infringements of Community designs will have to be evaluated in the same fashion as EU Trademarks (EUTMs). Where the defendants are outside Germany, German national designs will be treated in the same way as IR trademarks (or German national trademarks), which is according to the Brussels Convention.

The different treatment of different kinds of IP rights is quite puzzling and has some major consequences for German practitioners—litigators, in particular—of trademark infringement law. German and international companies active in Germany feel they have a legitimate interest in enforcing their EUTM or Community design rights in Germany if the effects of the infringement can be felt here. Especially if infringements are committed on websites expressly directed at German buyers, who have large purchasing power, the practice of the German courts (until quite recently) was that infringements of EUTMs and Community designs could be enforced before German courts.

That strategy must now be reviewed, since in most cases, lawsuits for infringements on the internet may be initiated only in those countries where the infringement originated, which means where the people responsible for the website are located. This will mainly be countries where the foreign companies have their place of business. If the place of business is outside of Germany, one will have to assume in the future that a lawsuit for infringement of an EU IP right must be started there.

Jens Künzel is a partner at Krieger Mes & Graf v der Groeben.

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