Since 1956 the German publisher Langenscheidt distributes its printed dictionaries in a specific yellow color, since the 1980s it also markets other products in this color. After having proven in application proceedings that its mark had acquired distinctiveness through use, Langenscheidt’s obtained a German color mark registration for “printed bilingual dictionaries” in January 2010 (claiming priority of March 7, 1996). In 2010, the U.S. company Rosetta Stone started distribution of its language-learning software in a yellow packaging in Germany, also using the yellow color for its promotions and marketing, e.g. on its website. Langenscheidt sued Rosetta Stone, arguing that use of the yellow color infringes its trademark rights. The Cologne District Court and the Cologne Appeal Court found the accused products to infringe the claimant’s trademark rights. The further appeal of the defendant before the Federal Supreme Court remained unsuccessful.

The Cologne District Court and the Cologne Appeal Court both ordered the defendant to, inter alia, refrain from use of the yellow color for its language-learning software, because it infringes Langenscheidt’s registered color mark. Rosetta Stone filed a cancellation request against the mark-in-suit with the German PTO, arguing that the mark was devoid of intrinsic distinctive character, and that the mark allegedly also did not acquire distinctiveness through intensive use. The German PTO and the Federal Patent Court both rejected the cancellation request. An appeal on points of law was pending before the Federal Supreme Court. Despite these pending cancellation proceedings, the Federal Supreme Court (as already the Appeal Court had done before) rejected defendant’s request to stay the infringement proceedings until a final decision in cancellation proceedings will be rendered. The Federal Supreme Court’s standard of staying an infringement action while an invalidity action is pending requires „ … a certain degree of probability for the cancellation which justifies the delay following from a stay.” This requirement was not met. The Court maintains this view while taking into account the recent judgment of the ECJ that the burden of proof in cancellation proceedings regarding the question whether a trademark acquired distinctive character through use lies with the trademark holder (ECJ, decision of June 19, 2014, Joined Cases C-217 & 218/13 – Deutscher Sparkassen- und Giroverband/Banco Santander – Sparkassen-Red, reported in IP-Report 2014/II) and the argument of the appellant that thereby the chances of success in the invalidity action were higher. The German Supreme Court had previously held that the burden of proof lies with the person challenging the validity. The Court finds that this ECJ decision does not affect its evaluation of the defendant’s chances of success in the cancellation proceedings. According to the Federal Supreme Court the impact of this ECJ decision on German practice remains “open”, because the ECJ based its decision on the incorrect assumption that Germany had not exercised its right to make use of the option in Article 3 (3) of the Trademark Directive to provide that a trademark shall also not be declared invalid on the grounds of absence of distinctiveness or descriptiveness if it has acquired a distinctive character after the date of application for registration or after the date of registration (cf. Section 37 [2] German Trademark Act).

As regards the requirement that the infringing sign must be used “as a trademark”, courts in general argue that consumers perceive the coloring of a product rather as a decorative element and not as a trademark. Only under specific conditions consumers may find a color to demonstrate the origin of the products. In the present case, the Court agrees with the lower court that when taking into account the perspective of average users of the respective products, the requirement of trademark use is met. The claimant has made extensive use of the color yellow since 1956, and today it holds a significant market share in the field of bilingual dictionaries. Its most important competitor extensively uses a specific green color for its products. Trademark use applies not only to the claimant’s products, but also for defendant’s yellow-colored products. Finally, the fact that the claimant and the defendant besides using the yellow color also use other marks for their products does not change con­sumer’s perception of the yellow color “as a trademark”.

The Federal Supreme Court confirms the Appeal Court’s assessment that dictionaries on the one side and language-learning software on the other are complementary goods and, thus, the conflicting goods are highly similar. In view of the longstanding intensive use of the yellow color by the claimant, which nowadays includes dictionaries in 33 languages, the Court found that the Appeal Court correctly came to the conclusion that the mark-in-suit enjoys an average scope of protection. As regard the conflicting yellow colors, the Federal Supreme Court again agrees with the Appeal Court’s finding that they are highly similar. Consequently, there exists likelihood of confusion.

Remarks
The decision follows established principles in cases involving infringement of so-called “abstract” color marks, i.e. marks consisting, as here, of a single color without any figurative addition. 

Noteworthy is the simultaneous pendency of infringement and invalidity case involving the same mark and the almost simultaneous decisions in both cases. In the co-pending cancellation action, the Federal Supreme Court dismissed the appeal on October 23, 2014 (Case I ZB 61/13), i.e. only one month after the decision in the infringement action. The reasons for the dismissal of the invalidity claims are not yet available at the time the writing of this Report (November 19, 2014). It will be interesting to see how the German Supreme Court will take into account the recent Sparkassen-Rot judgment of the Court of Justice, which is, at least as regards fixed percentages for finding acquired distinctiveness, in obvious contradiction with the German court’s requirement of acquired distinctiveness by at least 50 % of the relevant public.