The Federal Court of Justice decided that the use of the figurative trademark “VW” by an independent garage infringed Volkswagen's trademark rights. To indicate its services, the garage could have used the word marks "VW" or “Volkswagen” rather than the "VW" device.

Volkswagen AG (VW) is the owner of the German figurative trademark "VW", registered for, inter alia, automobiles and motor vehicle maintenance and repair.

Click here to see VW's trademark.

A.T.U. Auto-Teile-Unger Handels GmbH & Co. KG (ATU) owns several hundred garages that are not related to a specific car brand. VW objected to the use of the "VW" logo in ATU's advertisements for car repairs and maintenance of VW automobiles.

The Regional Court of Hamburg and the Court of Appeal of Hamburg held that the use infringed VW's trademark rights.

The Federal Court of Justice confirmed this decision. It held that the "VW" logo used in ATU's advertisements was identical to VW's trademark, registered for identical services, and therefore affected the advertising function of the trademark. The use of the well-known VW logo resulted in an image transfer which weakened and diluted VW's trademark.

The court held that ATU could not rely on Article 23(2) of the German Trademark Act which provides that "a trademark owner cannot prohibit a third party from using the trademark where it is necessary to indicate the intended purpose of a service, provided that the third party uses the trademark in accordance with honest and fair practices in industrial and commercial matters".

Since ATU could have used the word marks "VW" or "Volkswagen" to describe its services, the restriction of protection was not met. This might lead to the conclusion that the advertising function of a device mark is worth more than the advertising function of a word mark - although this was not explicitly said by the court.

At first glance, the decision seems to deviate from the BMW/Deenik decision of the Court of Justice of the European Union (CJEU) 1 in which the trademark owner did not succeed to prohibit the use of its trademark. In that decision, the CJEU had held that the legitimate scope of a third party's trademark use depended on the necessity of the use.  

However, in the case at issue, the Federal Court of Justice did not say anything else but only found the use of the device mark not necessary if it was possible to use word marks.  

It remains uncertain whether the Federal Court of Justice would have decided differently if VW had only owned a figurative mark without a word element (or vice versa).

It remains to be seen how this decision will affect advertisements of online shops and independent service providers on the Internet where third party trademarks are often used in order to indicate their services.