Legislative framework and causes of action
Trademark law, rules and regulations
The relevant legislation for trademarks in Germany are the Trademark Act and the Trademark Ordinance. Since Germany is a member of the European Union, the EU Trademark Directive (2015/2436/EC) applies. EU trademarks cover Germany.
The new EU Trademark Directive was issued on December 16 2015 and entered into force on January 15 2016. National governments have until January 2019 to implement it into national law. The German legislature has presented a draft new trademark act, but has not yet managed to implement it.
One of the main changes in the new directive is that it no longer requires graphical representation of a trademark registration. This paves the way for new forms of trademarks, such as sound marks that cannot be depicted by musical notation, and holograms. Further, the directive establishes the registration of certification trademarks, which should enable the public to distinguish between goods or services that have been certified by the proprietor of the mark (eg, in respect of material, mode of manufacture, performance of services, quality or accuracy), and those which have not been certified in this way. Finally, there may be (optional) changes regarding trademark registration and renewal fees, since the basic fee should now only refer to one class.
In addition, the EU Trademark Regulation (207/2009) directly applies in Germany. Under the regulation, EU trademarks enjoy the same protection as national German trademarks. Where the regulation does not provide specific stipulations, German material and procedural laws apply.
Causes of action
In practice, most litigation cases are based on registered trademarks. However, non-registered rights are relevant in some cases. Under Section 4.2 of the Trademark Act, the mere use of a sign in the course of trade gives rise to trademark protection insofar as the sign has acquired public recognition (ie, secondary meaning) as a trademark within the affected trade circles. These unregistered trademarks have the same right of protection as registered trademarks, but may be limited to the regions in Germany where they have acquired secondary meaning.
Under Section 5 of the Trademark Act, company names and the symbols of business operations used in the course of trade enjoy protection as commercial designations and grant exclusive rights to their proprietors. The proprietor of such commercial designation may prohibit third parties from using its sign (or a similar sign):
- in the course of trade;
- without authorisation; and
- in a manner liable to cause confusion with the protected designation.
The proceedings for claiming infringement of a commercial designation (and the reliefs available) are the same as in the case of trademark infringement, as described below.
The Trademark Act also offers protection for titles of works. These are names or special designations of printed publications, cinematic works, musical works, stage works and other comparable works. The act further protects the right to a name, the right of personal portrayal and indications of geographical origin.
Finally, in proceedings concerning domain names, the claim is based on the right to the name of a private person or a company. While trademarks and trade signs are protected only in the course of trade, name rights also enjoy protection in the private sector. Therefore, although it is normally impossible to claim a domain name based on a trademark or trade sign, such claim may be based on a name right.
Alternative dispute resolution
The German legal system provides no institutionalised standalone mediation or arbitration system. However, a court may stay an infringement proceeding with the consent of both parties and initiate a judicial mediation proceeding. In this circumstance, the case will be referred to an independent judge who is a qualified mediator and who will neither decide on the case nor contact the chamber that is responsible for it. In judicial mediation proceedings, the parties try to find a solution. If the case is not settled, it is referred back to the chamber for a decision.
Litigation venue and formats
An infringement claim can be brought to the civil courts by the trademark owner. The regional courts are competent regardless of the amount in dispute. The plaintiff may choose a forum among the regional courts that are competent according to Sections 12 and following of the Code of Civil Procedure.
There are 21 specialised trademark courts in Germany. A claim is possible wherever the trademark has been infringed or could likely be infringed. Some courts are more popular than others (especially Dusseldorf, Frankfurt, Hamburg and Munich).
Jury versus bench
There are no jury trials in Germany. Ordinarily, the Chamber for Commercial Matters is competent. This chamber comprises one professional judge and two lay judges who have professional experience in matters of business and trade. However, the parties often implicitly agree to let the ordinary civil chamber decide the case. The civil chamber decides with one or three professional judges, depending on the parties’ wishes and the importance of the case.
Stay of proceedings
Where a German trademark is attacked with an opposition or a cancellation request at the German Patent and Trademark Office, court proceedings based on this trademark may be suspended. The suspension is at the discretion of the court, which summarily assesses the opposition or cancellation request’s prospect of success.
Under Article 104 of the EU Trademark Regulation, if the court proceeding is based on an EU trademark which is subject to a cancellation request that was made before the lawsuit commenced, the suspension is mandatory unless there are special grounds for continuing.
The Trademark Act refers to the general provisions of the Civil Code, which regulates the statute of limitations. Usually, a trademark infringement claim becomes time barred after three years. This period begins with the rising of the claim and the trademark owner’s knowledge of the claim. It terminates with the end of the third year. Regardless of any knowledge of the infringement, claims are time barred after 10 years.
Damages and remedies
Section 14 and following provides the following reliefs if a trademark is infringed:
- a final or preliminary injunction to cease and desist;
- compensation or, in absence of intent or negligence, a levy of unjustified enrichments;
- the right to destroy or recall the infringing products;
- the right to obtain information from the infringer (and, under certain circumstances, third parties) regarding the distribution chain, sales numbers and turnovers;
- the rights to inspect certain documents; and
- announcement of the judgment.
Under the EU Enforcement Directive (2004/48/EC), judicial authorities will order an infringer that has knowingly engaged in an infringing activity (or has done so with reasonable grounds to have known) to pay the rights holder damages appropriate to the actual prejudice suffered as a result of the infringement. The judicial authorities take into account all appropriate aspects, such as:
- negative financial consequences, including lost profits and any unfair profits made by the infringer; and
- non-financial factors, such as moral prejudice caused to the rights holder by the infringement.
Alternatively, in appropriate cases the judicial authorities may set the damages as a lump sum, based on elements such as the royalties or fees which would have been due if the infringer had requested authorisation to use the right in question.
Preliminary injunctions can be obtained if the applicant furnishes prima facieevidence that the defendant has committed an infringement and that it is a case of urgency. Therefore, no more than one month should pass between the claimant gaining knowledge of the infringement and applying for the preliminary injunction. Normally, preliminary injunctions are granted within a few days and at low cost. In practice, an injunction will often have such an effect on the infringer that it accepts the injunction as the final resolution of the case. A preliminary injunction is therefore often the fastest and cheapest way to solve a trademark dispute in Germany.
Preliminary injunctions are available not only to prohibit further infringing acts (eg, importing, exporting, offering, advertising and distributing), but also to seize infringing items and even to force the infringer to disclose the names and addresses on its distribution chain. Thus, it is possible to locate the producers and resellers of infringing goods through fast and effective preliminary proceedings, and to pursue the case across all distribution channels very quickly.
Final injunctions are granted in main proceedings where the plaintiff takes the full burden of proof for the infringement and the existence of its claim.
Reimbursement of costs
The losing party must bear the court fees and reimburse the winning party’s lawyers’ fees. In German IP cases, a lawyer’s remuneration is calculated on the basis of the Lawyers’ Remuneration Act. Negotiated fees between the lawyer and the client are possible, but there are lower limits in some cases and negotiated fees are not reimbursable.
For court proceedings there are basically fixed fees that depend on the value in dispute. There are no fixed values for IP cases, but typical values for certain cases exist:
- Opposition proceedings have a standard value of €50,000; and
- Invalidation and infringement proceedings range in value between €50,000 and €1 million (rarely more).
Lawyers’ fees are calculated as follows:
- A value of €50,000 results in fees of approximately €1,500 for the proceeding, plus an additional €1,400 for an oral hearing; and
- A value of €1 million results in fees of approximately €6,100 for the proceeding, plus an additional €5,600 for an oral hearing.
The court will estimate the value in dispute. Relevant factors include the value of the violated IP right and the nature and extent of the violation.
Evidencing the case
Investigations and first steps
There is no need to validate evidence before starting a case. Evidence may simply be collected in the form of printouts, catalogues and test purchases. In some major cases, a detective will collect evidence concerning the use of the infringing sign.
Before starting court proceedings, the submission of a warning letter is recommended but not required. Under the Lawyers’ Remuneration Act, the infringer must reimburse the rights holder’s legal costs for warning letters.
In the claim, the plaintiff must bring forward facts and evidence supporting the allegation. The defendant may submit the reply, and one or two further exchanges of correspondence may take place. In main action proceedings, the hearing is usually scheduled within six months.
The parties to court proceedings in Germany must present their arguments in written form before the hearing takes place. Evidence (in the form of documents, certificates, pictures or sample products) is usually submitted along with the writs. Even the fact that a trademark is well known or has high distinctiveness must normally be proven by documentation. Trademark owners rarely try to strengthen their claim for renown through the presentation of market surveys.
Each party must bring forward all the facts and evidence needed to support its claims and arguments. However, the trademark owner has the right, under strict conditions and in rare cases, to demand the disclosure of relevant documents which are in the possession of the infringer. These documents may be needed to prove profits or turnover in order to calculate damages.
Use of expert witnesses
The possibility of questioning witnesses is rarely taken advantage of. In practice, witnesses are almost only heard regarding questions of sufficient use of the infringed trademark. Both parties can ask questions within the hearing of a witness, but cross-examination does not exist in Germany.
The most important defence in trademark infringement cases is the objection that the trademark owner has not sufficiently used its mark, as provided in Section 25 of the Trademark Act. This defence may be raised in the infringement proceeding. The infringer need not start a separate invalidation proceeding.
Defendants accused of the infringement of a trademark by using a similar or identical sign can argue that:
- no likelihood of confusion exists;
- the manner in which they use their sign cannot be deemed as the use of a trademark to designate the origin of goods and services from a certain undertaking;
- they do not use the sign in the course of trade; or
- where the reputation of the earlier mark is claimed, their use of the sign does not take unfair advantage of, or is not detrimental to, the distinctive character or reputation of the mark.
In addition, defendants can raise the following specific arguments to counter the accusation of infringement:
- The defendant is the owner of an earlier right or is allowed to use the earlier right of a third party. Older rights are often purchased when defending infringement cases;
- Where the reputation of the earlier trademark is claimed, the trademark is not well known; or
- The plaintiff cannot rely on its trademark rights, because:
- the trademark rights are exhausted (Section 24 of the Trademark Act);
- the defendant has a legitimate interest in using the sign (Section 23 of the Trademark Act), because:
- it constitutes a use of its own name or address;
- the use is descriptive for characteristics or properties of the goods or services; or
- the trademark is used to indicate the intended purpose of a good or service, in particular as an accessory or spare part, and the use is necessary therefor;
- the sign was registered as a trademark at a time when the earlier trademark could have been cancelled due to non-use or absolute grounds, or was not yet well known (Section 22 of the Trademark Act);
- the rights have been forfeited due to the fact that the plaintiff has tolerated the defendant’s use of the mark for five successive years, while being aware of such use, unless the registration or use of the defendant’s trademark was made in bad faith (Section 21 of the Trademark Act); or
- the claim is time barred (Section 20 of the Trademark Act).
In trademark matters, an action must be brought to certain regional courts. Decisions of the regional courts may be appealed to the higher regional court, which will review factual or legal questions. The appeal decision of the higher regional court may be further appealed to the Federal Court of Justice, if admitted by the higher regional court or on request by the Federal Court of Justice.
New means of challenge or defence may be admitted at the appeal stage only if they:
- concern an aspect that the first-instance court has recognisably failed to see or has held to be insignificant;
- were not asserted in the proceedings before the first-instance court, due to a defect in the proceedings; or
- were not asserted in the proceedings before the first-instance court, if this was not due to the negligence of the appealing party.
There is no direct route to the European Court of Justice (ECJ). Rather, any German court may refer single questions as to the interpretation of laws to the ECJ; however, after the ECJ has answered, the German courts will finally decide the case.