We recently reported about the design protection of a “paper dispenser” on our sister DesignWrites. You can view the article here. Below, we look at trade mark infringement and what consumers think about when they dry their hands with paper towels.
Background – Trade mark infringement through refill?
You’ve probably noticed the TORK trade mark on disposable towel dispensers. They’re everywhere, in restaurants, bars, workplaces and public washrooms.
TORK sued a company which sold paper towels as refills for TORK’s dispensers. They alleged trade mark infringement even though the refills didn’t have a trade mark and demanded an EU-wide injunction.
TORK wanted to rely on case law from the German Federal Court of Justice which stated, in a landmark decision in 1987, that consumers always consider a trade mark on a towel dispenser to indicate that the paper towels are from the same origin as the dispenser. Therefore, by filling the branded dispenser with unbranded paper towels, the paper towels become, so to speak, a branded product of the manufacturer of the towel dispenser. This is why TORK wanted to prevent the distribution of the unbranded paper towels, alleging trade mark infringement.
The consumer’s consideration is a factor in trade mark protection
TORK sued before the Munich I Regional Court in 2015. However, the judges assessed the consumer’s understanding differently from the Federal Supreme Court in 1987 and stated:
“In view of the variety of paper towel dispensers that are found in publicly accessible areas, the consumer no longer takes a trademark affixed to the towel dispenser as an indication of the commercial origin of the paper towels placed in the dispenser.”
TORK appealed to the Munich Higher Regional Court but the court confirmed the opinion of the Regional Court. The court held that consumers wouldn’t assume that the dispenser would only be filled with paper towels with the same trade mark.
TORK then brought the case before the Federal Court of Justice. The Court first reiterated that refilling the dispenser with third party goods is in principle trade mark infringement if the trade mark on the container is also understood by the public as identifying the refillable contents. However, this must be determined by various criteria. According to the Federal Court of Justice, the Higher Regional Court had not sufficiently examined these.
The Higher Regional Court therefore had to decide a second time – and again ruled against TORK. The court’s main argument was: Trade marks are less important to consumers in the case of consumer goods that are used free of charge, are commonplace and are available in many different ways. Because the consumer’s opinion about a restaurant, school, its employer or a sports facility is not determined by “whether the hygiene products and dispensers are of special origin and quality, provided that they only more or less satisfied their needs when drying their hands”. Consequently, if consumers do not pay any attention to the trade mark, they do not assume that the dispenser and the consumables must come from the same manufacturer.
The Federal Court of Justice decided on 19 May 2022 not to accept the case for a further appeal and thus confirmed the decision of the Munich Higher Regional Court.
Outlook – more competition in the aftermarket of dispenser products
The first decision of the Federal Court of Justice is a typical “yes, but…” decision: On the one hand, the landmark decision of 1987 may still be applicable, but under certain conditions a deviating understanding of the public could be established. With the decision of 19 May 2022, the Court confirms that it is serious about this. The rule/exception ratio has thus been reversed: While trademark infringements in the use of refill materials were previously the rule, they are now the exception, as long as no concrete, deviating consumer understanding is proven. Fun fact: Although it was all about the perception of the public all along, the judges ultimately established this without actually taking evidence – because the judges themselves belong to the relevant public, they were able to use their own experience as a basis. This is not unusual in Germany.
For manufacturers of refill products – not only limited to paper towels – the new case law is good news. Previously, a manufacturer of a dispenser of consumables could secure a “monopoly” on the refill product by virtue of trademark law. The decision is also practical – consumers are often assumed to be making considerations that they may not in fact be making. It seems plausible that consumers, when drying their hands, would not think about the manufacturer of the paper towels.