On the eve of Christmas 2013, the Cologne Appeal Court, Germany’s first choice-venue for enforcing claims based on misappropriation and trademark rights due to its owner-friendly approach, decided in a case brought by Mars Inc against the Turkish chocolate maker Şölen A.Ş. While claims against alleged copies of the BOUNTY packaging and BOUNTY chocolate bar were dismissed, the Court granted claims against the imitation of the SNICKERS packaging.
I. As regards the SNICKERS case, the conflict was about the conflicting chocolate products shown below (the SNICKERS being an exemplified packaging given that several variants are on sale):
Click here to view image.
Mars has been selling SNICKERS confectionary in Germany since the beginning of the 1980s. Turnover in Germany in 2010 amounted to EUR 95 million (2011: EUR 100 million), advertising spending was in the range of EUR 5 million (2011), while the market share in Germany was 7.9% in 2010 and 8.6% in 2011. On this basis, the Court considered that the outer appearance of the SNICKERS packs was entitled to claim “enormous reputation” and a “significantly increased competitive individuality”.
Turning to the accused packaging, the Cologne Appeal Court found that this pack was “evidently” based on the SNICKERS design, copying features of appearance characterizing the latter’s overall impression. In both cases, the product name was put in capitals tilted to the right, using blue and/or lilac colours (which, in the consumer’s imperfect recollection, were hardly to be distinguished), with the individual letters showing a white-red border and the blackbrown background of the packaging “brown segments being clearly perceived”.
German consumers, consequently, would be misled, perceiving the accused trade dress to be a sub-brand or variant of the SNICKERS product. The small indication “Şölen” would not suffice as this company was neither known in Germany, nor could “Şölen” be identified as a manufacturer. Apart from that, deviating indications of different manufacturers would not avoid an indirect deception as to origin in case of a “clearly similar overall effect” of the conflicting packs. The Court, finally, held that, according the judges’ practical expertise, the addressed public did not know that Mars Inc would not grant licenses to its products. As a result, the Court granted relief against misappropriation under Section 4 No 9 lit a Act against Unfair Competition based on an avoidable indirect deception as to origin.
In addition, the Cologne Appeal Court also granted claims, under Section 4 No 9 lit b Act against Unfair Competition, against the contested packaging based on taking unfair advantage, without due cause, of the repute of the SNICKERS product as consumers would transfer quality expectations from the original to the accused product.
II. As regards the BOUNTY case, the conflict was, first of all, about the two packs depicted below:
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Again, Mars Inc had asserted claims, under Section 4 No 9 Act against Unfair Competition, for protection against misappropriation based on an avoidable indirect deception as to origin and/or exploitation of reputation. This time, however, the Cologne Appeal Court denied such claims although the Court, again, confirmed that the outer appearance of the BOUNTY product could claim “enormous reputation” and a “significantly increased competitive individuality”
– due to turnover in Germany in 2010 and 2011 of EUR 22 million per year, advertising spending in the range of EUR 5 million (2011) and a market share of 2.6% in 2010 and 2011. However, according to the Court, the “degree of imitation” of those features of appearance characterizing BOUNTY’s overall impression was only low, given that the basic elements were different, further and different elements of appearance were added and the accused pack showed an individual overall impression – due to a different character of the product name, the missing “palm landscape” and a “rather dreamy overall impression” (in the sense of a “dreamy sky scenery”).
Furthermore, due to the evidently different product name (“Wish”), there was no likelihood of confusion (neither in terms of an avoidable direct nor an indirect deception as to origin). Likewise, the Cologne Appeal Court denied claims either based on taking unfair advantage, without due cause, of the repute of the BOUNTY product or on the grounds that the Wish pack was detrimental to the repute of the BOUNTY original.
III. Last but not least, the Court was called to decide whether Mars could successfully claim infringement of its German 3-D mark No 302010033190 registered, inter alia, for “non-medical confectionary”. The mark and the accused chocolate bar are shown below:
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Originally, the mark had been registered as a Community trademark but later invalidated due to lack of acquired distinctive character in the European Union. On October 11, 2011, the German Patent and Trademark Office allowed registration of the mark due to acquired distinctiveness in Germany (invalidity proceedings are still pending). A consumer survey of October/ November 2004 showed that 49.4% of the interviewees attributed the mark either to BOUNTY, its manufacturer or other of its products.
Nonetheless, the Cologne Appeal Court found non-infringement of the mark. The conflicting signs were highly similar. However, the accused product configuration was not used “as a mark” in order to indicate the origin of the defendant’s product, according to the Court. Actually, Mars failed to establish corresponding evidence that the public perceived the shape of a chocolate bar as a badge of origin. The diversity of product configurations which could be found on the German chocolate market did not serve to distinguish the various different products. Rather, consumers would perceive differences in the dimensions and textures of existing chocolate bars as being merely functional or ornamental. Apart from that, the Court held that the mark’s distinctiveness was average at best and did not significantly exceed the 50% threshold which would be required anyway, according to German case law, to grant acquired distinctiveness.
The Court’s decision seems to be consistent with established case law of the German Federal Supreme Court and, in particular, the decision “Praline Shape I” (cf. BARDEHLE PAGENBERG IP Report 2007/IV). However, there appear to be inconsistencies with case law from other German appellate courts.
For instance, and contrary to the Cologne Appeal Court in the present case, the Hamburg Appeal Court found in October 2008 that the requirement “use as a mark”, as a rule, should be construed broadly in the interests of a comprehensive trademark protection. Accordingly, it should suffice that there is the “objectively not entirely unlikely possibility that the public will assume an indication as to commercial origin”. “Use as a mark” should only be denied if the sign was “clearly not perceived in this sense as an indication of commercial origin”.
Likewise, there seems to be a discrepancy between the present case and a decision of the Hamburg Appeal Court from April 2005 according to which it is unlikely that consumers expect brand owners to allow me-too products to be put on the market in a packaging capable of causing confusion even if the public might assume that major food discounters distribute products of known brand owners under their own private label.
Finally, interestingly, according to the Dusseldorf Appeal Court, the standard under Section 4 No 9 lit b Act against Unfair Competition would be that third party observers passing by and seeing someone using the accused imitation would perceive this product as being the original. The high similarity from the perspective of such a third party constituted a clear incentive for potential buyers in order to impress third parties, according to the Court. Consequently, it would not be the perspective and perception of a (potential) buyer of the competing products – this is what the Cologne Appeal Court found – but a “casual bystander” that should count.
The present case is pending before the Federal Supreme Court. More clarity will hopefully be provided.