In a judgement of 26 June 2015 (file no. 6 U 176/14, not published) the Higher Regional Court of Cologne has recently strengthened the principle of freedom to copy in a case between specialised manufacturers for automatic product lines for the industrial production of coated cardboard boxes.
The product lines in dispute were high-priced industrial equipment goods intended for a specialised public of only twenty to fifty potential customers in Germany. The plaintiff, an Italian company, has supplied its market-leading product line since 1992. According to the plaintiff, its machines have an excellent reputation and are seen as a standard of reference by its customers. The action was directed against the offer of a considerably cheaper product line with notably visual similarities from a Chinese company. The plaintiff claimed an unfair exploitation of the reputation of its product line and an unfair deliberate obstruction of its business activities under the German Act Against Unfair Competition (UWG).
Upon defendant’s appeal, the Higher Regional Court Cologne lifted the first instance decision and rejected the claim.
The Court held that although plaintiff’s machine line was of enhanced originality and well reputed amongst potential customers, the fact that the machine of the defendant could be perceived as a copy is as such not sufficient to constitute an unfair commercial practice. Additional circumstances necessary to find unfairness do not exist in view of the court.
The court held that the outer appearance of high priced and long-lasting industrial equipment is not relevant for purchase decisions of highly specialized customers. The good reputation of the plaintiff’s product line is not based on the outer appearance but on criteria such as reliability, functionality and efficiency. Therefore, in the niche market in question, not only every deception of origin is ruled out due to the clear indication of different producer names on the machines but also any transfer of a positive image on part of the specialised public. Experts investing several hundred thousand Euro into industrial equipment do not derive a special reputation from the outer appearance of a product. Their perception and purchase decisions are not comparable to an average consumer spontaneously buying everyday products.
The High Regional Court builds on recent judicature of the German Federal Supreme Court, according to which an unfair exploitation of reputation may be ruled out when there is no risk of confusion as to the commercial origin of the goods in question (cf. judgement of 17 July 2013, I ZR 21/12 – “Shopping Cart III”). If the addressed experts can reliably differentiate between the products, an unfair transfer of reputation can therefore only be found in exceptional cases.
The judgement effectively implements the principle that mere associations caused by similarities in the outer appearances of products do not give rise to a finding of unfair commercial behaviour. It once again proves that more efficient protection against copying and imitation is provided by Intellectual Property Rights such as registered designs. In view of the aforesaid, the acquisition of registered designs is of special importance and highly recommendable also for producers of industrial equipment and other goods addressed to a specialised public.