Foreign company name elements constitute a very valuable tool against third parties’ use of similar signs even if they only possess a very limited degree of inherent distinctiveness. This was once again confirmed by the German Federal Supreme Court (“BGH”) in a judgment published on July 17, 2018 (BGH, judgment of February 15, 2018, I ZR 201/16 – goFit).
Under German laws, company names are protected against third parties’ use of similar names/signs in similar industry sectors. No formal registration is required for this form of protection. Mere use of the company name in commerce gives rise to the existence of the company’s exclusive rights as long as the company name is not purely descriptive. In addition, not only the company name as a whole enjoys protection. One of its components will simultaneously be protected if it is distinctive and, in comparison with the other elements, appears suitable for asserting itself in commerce as a keyword-like reference to the company.
Although these company name rights are unregistered, they provide a degree of protection similar to registered trademarks. They cannot only be enforced against third parties’ use of an identical or similar company name, but also against the use of an identical or similar sign as a trademark. In view of this, German company name rights proved to be very valuable weapons in court proceedings. This is particularly true for a foreign company who does some business in Germany but never cared to secure trademark protection for this territory. It will usually be able to prevent competitors from using signs similar to its company name (element) for competing products. The reason is that such foreign companies enjoy protection for their company name (elements) under the same conditions as German companies as long as they have their place of business in a country that is a party to the Paris Convention.
In this context, the BGH’s recent decision “goFit” provides another illustrative example for the great value of German company name rights for foreign entities. Here, the Austrian plaintiff “goFit Gesundheit GmbH”, a producer of foot reflex zone massage mats, asserted German company name rights in its name element “goFit” against the operator of the German Amazon website. It contested the automatic complete functionality (autocomplete function) in Amazon’s internal search engine, which suggested search terms like “gofit Gesundheitsmatte” (“gofit health mats”) while the results of the search only led to competitors’ products marketed under completely different names. The German Federal Supreme Court dismissed the action in view of the unfortunate wording of the asserted claims. Its findings, however, clearly show that the outcome might have been different if the plaintiff would have attacked the search results obtained by the (suggested) search terms and not the internal search engine’s autocomplete suggestions as such. In particular, the BGH once again confirmed that (i) the Austrian plaintiff can rely on German company name rights, and (ii) an individual company name protection for the component “goFit” as such is possible even if this element should have a very low degree of inherent distinctiveness due to its descriptive connotations. In this context, the court emphasized that such descriptive connotations do not exclude company name right protection as long as the sign is not purely descriptive with a view to the products at issue.
Foreign companies confronted with a competitor’s registration and use of trademarks similar to their house brand in Germany often tend to invoke bad faith arguments when they do not possess pertinent trademark protection. This line of argumentation, however, rarely leads to the desired results, as the requirements for proving bad faith are very strict. At least if the copied house brand is an integral part of the foreign company’s name, it is usually much more promising to enforce company name rights. The requirements are much more lenient in this regard. It usually suffices if the company is able to show that it started doing some business in Germany before the other party’s registration of the contested sign, and that it did not discontinue its German business activities in the meantime. The extent of these business activities thereby do not need to be very significant. The presentation of at least some business correspondence with German addressees bearing the company name (element), such as offer letters, order letters or invoices, normally suffices in order to prove the establishment of corresponding German company name rights.