B&B Partners obtain patentee-friendly decisions from the Boards of Appeal of the European Patent Office

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Rule 80 EPC – Multiple independent claims for defending a patent in opposition proceedings

Within a short period of time, the Boards of Appeal of the European Patent Office have issued two parallel decisions that were obtained by partners of BOEHMERT & BOEHMERT in favour of our clients. Both decisions were published on 14 October 2024 and in both cases the interesting legal question is whether R. 80 EPC precludes the limited defence of a European patent in opposition proceedings with a set of claims that, instead of an independent claim of the granted patent, contains several independent claims that constitute different limitations of the independent claim of the granted patent.

Appeal T0123/22 – several independent claims limited by different features from the description

In the appeal case T0123/22, patent attorney Dr. Daniel Herrmann succeeded in setting aside the first-instance decision of the Opposition Division, according to which European Patent EP 2822613 B1 was revoked on the basis of R. 80 EPC. The Opposition Division had wrongly assumed that R. 80 EPC precluded a defence of the patent in a limited version by replacing an independent claim of the granted version with several independent claims, each containing different features from the description for the purpose of limitation. This decision was set aside by the Board of Appeal in a decision containing a catchword and remitted to the Opposition Division.

The Board of Appeal first clarified that R. 80 EPC is a purely substantive norm concerning the allowability of an amendment in opposition proceedings. According to the Board, the only relevant factor in assessing the requirement of R. 80 EPC is whether the amendment made is occasioned by a ground for opposition. In this regard, it was necessary to examine whether the amendment should be considered a genuine attempt to address a ground for opposition. In doing so, the board referred to the cited decision T0750/11. The circumstances of the individual case had to be taken into account. In the headnote and reasons, the board emphasised that R. 80 EPC does not provide any general guidelines as to how a patent proprietor may amend claims and, in particular, that it is irrelevant for R. 80 EPC whether the features additionally included in an attacked claim originate from dependent claims or from the description. In the present case, all three independent claims had been limited in relation to the opposed and not further pursued independent claim of the granted version and therefore apparently served to overcome the ground for opposition in the respective claim – and thus also overall. Therefore, R.80 EPC was fulfilled in the present case. According to the board, it is generally legitimate to cover several sub-areas at the same time that, in the opinion of the patent proprietor, are not affected by the ground for opposition. The purpose of R 80 EPC is not to prevent the patent proprietor from maintaining the patent as broadly as possible, taking into account the grounds for opposition.

Appeal case T1191/22 – several independent claims limited by different dependent claims

In the case T1191/22, patent attorney Felix Hermann succeeds in having the first-instance decision set aside, which had rejected an auxiliary request as contrary to R. 80 EPC because, in addition to an amended claim 1, it included further independent claims 12 to 15 based on granted dependent claims.

In line with decision T0123/22, the board corrected the opposition division’s decision by stating that R. 80 EPC is a substantive rule and not a procedural one. Referring to the earlier decision T0937/00, the board ruled that defending the patent with several parallel independent claims is in principle admissible and does not violate R. 80 EPC if the formulation of new independent claims in the opposition proceedings is aimed at overcoming asserted grounds for opposition.

Furthermore, the board stated that procedural aspects of allowability such as the lack of convergence of the independent claims or the effect of the auxiliary request on procedural economy are not relevant for the assessment of allowability under R. 80 EPC. The Board of Appeal decides to set aside the decision of the Opposition Division and to maintain the patent on the basis of the auxiliary request not admitted at first instance.

Extended scope of action for patent proprietors

The two decisions T0123/22 and T1191/22 both emphasise the substantive aspect of R. 80 EPC and distinguish it from procedural issues concerning the admissibility of a request. Both decisions, which were issued by two different boards of appeal, also confirm the principle that R. 80 EPC does not preclude a replacement of an independent claim of a granted patent with several amended independent claims in order to defend the patent in limited form, as long as the amendments can be considered a serious attempt to overcome the asserted grounds for opposition. This basically recognises the right of patent proprietors under R. 80 EPC to cover several sub-areas of the original subject-matter at the same time, i.e. in one and the same request, which from the point of view of the patent proprietors are not affected by the grounds for opposition asserted in the opposition proceedings.

 

Dr. Andreas Dustmann, Attorney at Law at BOEHMERT & BOEHMERT

ChatGPT & Co. – Artificial Intelligence and Copyright

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Few topics are currently dominating the public debate as much as the impact of artificial intelligence on our workplace. This also applies to copyright law and the creative industries that depend on it. The following article provides a brief overview of the most important copyright issues arising from the use of AI. All issues can be traced back to the same question: “Who benefits from technological advances?”

Conflicts of Interest

In recent years, AI systems of all kinds have become exponentially more important. So-called generative AI systems, such as ChatGPT and Google Gemini for text or Midjourney for images, have attracted particular attention. These are systems that are able to autonomously generate media content based on human input (so-called “prompts”). Their products are not only deceptively similar to works of human creativity but can also replace them.

The generation of new content takes place in 4 steps:
1. Collection of training data in a database (“corpus”).
2. Analysis of the training data for patterns and correlations, followed by “fine tuning”.
3. User command (“prompt”).
4. Autonomous generation of new content.

The diversity of interests is already evident here. The rightsholders of the pre-existing works used for training (“training data”) want to be remunerated for their use or to be able to prohibit this form of use. Operators of AI systems, on the other hand, are dependent on the training data as it is not possible to generate content without it. They stress that overly strict regulatory requirements will make a key technology of the future unattractive. AI models would not replace existing works, but only create new content. Ultimately, users of the systems in question want to be able to use the works generated on the basis of their specifications as extensively and exclusively as possible.

When a weeks-long strike by screenwriters and actors paralyzed the Hollywood film industry in the summer of 2023, the filmmakers made one demand in particular: their work should not be replaced too much by the use of artificial intelligence (AI) in the future. In the future, specially trained AI models will not only generate scripts and individual scenes, but entire movies.

Is AI-generated Content Protected by Copyright?

Long before ChatGPT, the question of whether AI-generated content – text, photos, software, music – is protected by copyright, and if so, who is entitled to that protection, was debated. This question can be considered settled: according to the creator principle enshrined in almost all copyright laws, copyright protects only the results of human intellectual creation. Machine-generated works, which are created completely autonomously without human intervention, do not enjoy copyright protection. According to this understanding, the work of an artificial intelligence cannot be protected because it is the machine that creates, not the human. Only if the user gives the AI such specific instructions that the design of the work has already been determined, and the AI only has to implement that design, would copyright protection be justified. These requirements are generally not met by today’s text and image generators. They create content autonomously and are ultimately unpredictable.

It has often been argued against the lack of copyright protection for AI products that users of AI often invest considerable effort and creativity in designing a prompt in such a way that the AI model generates the desired content. For example, in a case before the US Copyright Office, the author of a 16-page comic featuring Zarya of the Dawn, whose images were generated by the image AI Midjourney, argued that it had taken her almost a year to develop appropriate prompts and procedures to obtain the desired image using the image AI. In a very readable decision of 21 February 2023, the US Copyright Office rejected this argument, stating that no amount of preparation could change the fact that the photo was created autonomously by the AI.

However, content created by AI can be protected by copyright if it is subsequently edited and developed by humans. However, this requires that the adaptation itself is a personal intellectual creation and is not limited to editorial and technical adaptations. Strict requirements must be met. Creators who are dependent on the exclusivity of the content they have created will nevertheless seek to subject pure AI works to their own creative adaptation to obtain copyright protection.

Protectability of the Prompt

From the point of view of the user of an AI system, the most important input is the prompt, i.e. the instructions to the AI. Good prompts are the basis for good AI output, and a new profession, the prompt engineer (“prompter” for short), has emerged to formulate these instructions. This raises the question of whether prompts are protected as literary works. The answer is yes, provided that the prompt itself meets the requirement of personal intellectual creation. The content generated by the AI model using the prompt is not taken into account in the assessment.

Does the AI Product Infringe Third Party Rights?

The fact that the AI product itself is not protected by copyright does not mean that its distribution cannot infringe the rights of third parties, e.g. the authors of pre-existing works. An important motive for using AI models is to create new content by referencing or using pre-existing works (examples: “Write me a new story with Pipi Longstocking” / “Create a picture in the style of Keith Haring”). Generative AI can identify typical elements of an artist and imitate the recognized style to create a new image that looks like an artist’s image. Similarly, sequels to novels, characters or films can be created.

Whether this content infringes the rights of the authors concerned will always be a question of individual cases but is based on traditional copyright principles: An artist’s style alone is not copyrightable; only the specific design of a work is copyrightable. The underlying style remains in the public domain, so that the artist does not monopolize his/her chosen cultural technique through copyright, thereby restricting the artistic freedom of others. A different decision will have to be made if the AI product refers to specific works and these are recognizable or essential elements do not fade away. An example of this is the well-known AI work “Vincent Creating the Starry Night on His Laptop” by AI artist David R. Smith. The reference to van Gogh’s Starry Night is obvious in that the work does not fade. If the works of van Gogh, who died in 1890, had not long been in the public domain, the AI image would infringe the rights of van Gogh or his legal successors as an unauthorized adaptation (Section 23 of the German Copyright Act, UrhG).

  Vincent Creating the Starry Night on His Laptop, David R. Smith

If the AI output is a (recognizable) reproduction or adaptation that infringes the copyright of a third party under these standards, the user must obtain a license from the third party for publication or exploitation or be able to rely on a statutory restriction such as pastiche under Section 51a UrhG.

Use of Existing Works as Training Data

Both small and large AI models are based on training with existing works. In the case of large AI models such as ChatGPT, this is assumed to be almost all the content available on the World Wide Web. The AI then independently analyses the entire volume of text for patterns and correlations to determine the rules on which the language is based (“pre-training”).

To put it bluntly: Generative AI only works as well as it has been trained and analyzed with the existing works.

As a result, authors and rights holders are demanding a ban on the use of their works to train AI modules, or appropriate compensation. Numerous lawsuits are already pending in the US by prominent authors, publishers and image database operators who believe their rights have been infringed by well-known AI models. The outcome of these cases remains to be seen. In any case, the treatment of pre-existing works by AI models is the key issue.

In Europe, however, the EU legislator has given the operators of AI models the right of way. With the Digital Services Market (DSM) Directive, a barrier regulation for machine learning will be introduced in 2019, which will be implemented in Germany through Section 44b UrhG: Section 44b UrhG permits the reproduction of works that are necessary for the automated analysis of these works, unless the rights holder has expressly reserved this type of exploitation (“opt out”). However, due to technical limitations, the possibility of opting out currently plays little role. This means that there is a legal authorization to collect works on a large scale and to create a training corpus from them – without the restriction to research institutions, i.e. also for commercial purposes, provided for under the old legal situation in Section 60d UrhG. The aim of this regulation is to promote technical innovation in the EU and to provide companies with a secure legal framework for AI applications.

However, rights holders are opposed to this interpretation. They point out that the application of any limitation rule must meet the requirements of the three-step test laid down in several international copyright treaties, according to which the application of the limitation must neither impair the normal exploitation of the work nor unreasonably prejudice the legitimate interests of the author. If an AI makes it possible to paint pictures in the style of an artist or to create serialized stories, the application of the exception undermines the basis of exploitation and the livelihood of authors.

The outcome of this discussion is open – the pressure on legislators worldwide to create a (new) legal framework for the use of pre-existing works is growing.

Conclusion

Many of the traditional principles of copyright law can easily be applied to the models of generative artificial intelligence. However, they do not solve the core socio-political problem: how to deal with the fact that creative content – text, images, graphics, software and images – which has traditionally been the responsibility of human creativity and whose exclusive copyright protection has formed the basis of an entire industry, can be generated by AI at the touch of a button? Creative people see their livelihoods threatened. And even if you wanted to give AI products some form of protection that could form the basis for exclusive rights and legal exploitation. This would not change the low value of these products and their reduced licensability.

Robert Bernin, Patent Attorney at BOEHMERT & BOEHMERT

Basically plausible: one year after G 2/21

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After the decision of the Enlarged Board of Appeal of the European Patent Office (G 2/21 of March 23, 2023) did not seal the end for all experimental data submitted later to prove a technical effect, the question arises one year later how the Boards of Appeal deal with the guidelines established in G 2/21.

In response to the questions posed by the Technical Board of Appeal (in T 116/18 of October 11, 2021), the Enlarged Board of Appeal had answered as follows:

1. Evidence submitted by a patent applicant or proprietor to prove a technical effect relied upon for acknowledgement of inventive step of the claimed subject-matter may not be disregarded solely on the ground that such evidence, on which the effect rests, had not been public before the filing date of the patent in suit and was filed after that date.

2. A patent applicant or proprietor may rely upon a technical effect for inventive step if the skilled person, having the common general knowledge in mind, and based on the application as originally filed, would derive said effect as being encompassed by the technical teaching and embodied by the same originally disclosed invention.

While the first answer clearly states that evidence, usually in the form of experimental data, may not be disregarded because it was filed subsequently, the second answer requires an assessment of whether a technical effect can be inferred from the original application documents.

A good year after the decision of the Enlarged Board of Appeal was announced, there are many decisions of the Board of Appeal relating to G 2/21 and assessing the assertion of a technical effect.

Consideration of subsequently filed evidence

In T 116/18, from which the decision of the Enlarged Board of Appeal arose, it was concluded on the basis of G 2/21 that the subsequently filed experimental data on the synergistic effect of the claimed insecticides must be taken into account.

In T 1515/20 and T 728/21, subsequently filed experimental data were also taken into account, since the technical effect was clearly disclosed in the original documents.

In T 1989/19, the technical effect of an improved shelf life was recognized as encompassed and embodied in the originally disclosed particle size stability of an active substance micronisate. Moreover, it was the view of the Board of Appeal that an admissibly derivable technical effect always implicitly included the aim of improving this effect, since the skilled person always strives for further development and improvement.

In T 2716/19, the fact that a dependent claim was directed to specific alkoxides was seen as an indication that these could be associated with a technical effect. Furthermore, the skilled person could have deduced the improvement in yield from the yield of an experimental example in the original application. The subsequently filed documents proving the improvement in yield were therefore considered.

In T 885/21 and T 1329/21, a technical effect and, based thereon, an inventive step was recognized on the basis of the subsequently filed experimental data, since the technical effect was encompassed by the original documents and embodied by the originally disclosed invention. In these decisions, the technical effect could be directly derived from the original application documents.

In T 1445/21, subsequently filed experimental data were taken into account, even if it was ultimately not sufficient for a technical effect of the distinguishing features. It is noteworthy that the recognized technical effect of olfactory performance or intensity was considered to be encompassed by the originally disclosed technical effect of the stability of the fragrance microcapsules.

Partial consideration of the subsequently submitted evidence

In T 2046/21, subsequently filed experimental data for a technical effect, disclosed in the original application, of a combination of active ingredients were taken into account, whereas further claimed effects according to other subsequently filed documents were not considered, since these specific technical effects were neither disclosed nor indicated in the original application documents. Overall, inventive step was denied.

In T 0681/21, subsequently submitted experimental data showing an originally disclosed technical effect for a preferred feature combination according to the auxiliary request was allowed, while a synergistic effect claimed in the main request for another preferred feature combination was considered not to be covered by the technical teaching of the original application documents. As a result, this synergistic effect could not have been effectively demonstrated on the basis of experimental data submitted later.

No consideration of the subsequently submitted evidence

In T 852/20, the technical effect for the claimed crystalline form of a compound was found not to be covered by the technical teaching, since the relevant paragraphs of the description referred only to the amorphous form of the compound.

In T 258/21, a technical effect based on subsequently filed documents was not considered, since the technical effect was neither disclosed nor suggested in the original documents.

In T 887/21, a technical effect on the basis of subsequently filed documents was not considered, since the technical effect shown there did not even correspond to the vague hypotheses regarding a possible effect in the original application documents. It was emphasized that an invention could not be based on knowledge that only became available after the filing date.

No relevance in case of sufficiency of disclosure

The Boards of Appeal have consistently rejected the transferability to objections in the case of sufficiency of disclosure hoped for by some patent proprietors, particularly in the case of second medical uses (see T 1435/20, T 25/20, T 2790/17, T 1779/21, T 552/22). What matters here is the status on the date of filing and subsequently filed evidence with a later priority date cannot turn the tide on its own. Only in T 1796/22 were subsequently filed documents considered as additional evidence that the application was sufficiently disclosed on the date of filing, in addition to the experimental examples of the original application.

Conclusion

Subsequently filed evidence with later priority may continue to support a technical effect to prove inventive step if this effect can at least be deduced from the original application documents. Applicants are advised not to keep the description of the technical effect of features and feature combinations too brief or even to omit it. Otherwise, this may come back to haunt them later.

CJEU: Trade mark infringement by spare parts from third-party suppliers that contain elements for affixing a trade mark emblem

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In its judgment of 25.01.2024 (C-334/22), the European Court of Justice (CJEU) clarified that a car manufacturer can prohibit the use of a sign for spare parts if it contains an element that is similar or identical to a trade mark.

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Dr. Alexander Thamer, Rechtsanwalt bei BOEHMERT & BOEHMERT

No Design Protection for Rihanna’s Puma sneakers

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On March 6, 2024, the General Court of the European Union ruled that a design for a shoe registered by Puma in 2016 was rightly declared invalid by the EUIPO. The design had already been disclosed in 2014 and therefore lacked novelty: On the occasion of her appointment as Puma’s new creative director, Rihanna wore on several photos published on her Instagram account the very sneakers from the planned joint collection that Puma wanted to protect 2 years later by the (now invalid) Community Design.

Rihanna’s Post

On December 16, 2014, the US pop star Rihanna published several photos on her Instagram account to mark the signing of a contract that made her the new creative director of Puma. Also on display on these photos: The white sneakers that Rihanna wore at the signing, with conspicuously thick soles and characteristic ribbing. Perhaps a small teaser for the new collection that Puma would be selling in collaboration with Rihanna. Or a mistake after all? In any case, Puma only registered a Community Design that is strikingly similar to these shoes on July 26, 2016.

A registered Community Design is only protected if it is new and has individual character before the date of the filing of the application. This means in particular that the relevant specialist circles must not have been aware of an identical design at that time. However, the law grants a grace period of one year. If the designer of the design himself or a person associated with the designer discloses the design, this disclosure is not taken into account for applications within the next 12 months in accordance with Art. 7 para. 2 CDR.

However, in the present case this deadline would also have passed for the application of July 26, 2016 if the Instagram photos of December 16, 2014 were indeed a prior disclosure of the design.

A third company, which was involved in a legal dispute with Puma in the Netherlands, promptly filed a request for a declaration of invalidity of the Community Design with the European Union Intellectual Property Office (EUIPO) on July 22, 2019, arguing that the contested Community Design lacked novelty and individual character due to the prior disclosure.

After the EUIPO granted the request and Puma appealed against this decision, the General Court (EGC) now had to deal with the facts of the case.

The Decision of the EGC

Puma objected to the request and the EUIPO’s decision on the grounds that the screenshots of the Instagram photos attached to the application were not sufficient to establish a disclosure of the design that would be prejudicial to novelty. In the photos, Puma argued, Rihanna was in the foreground; the sneakers, on the other hand, were hardly noticed. The photos were too dark and blurred for anyone to be able to clearly recognize the sneakers at all. In addition, at the time of the disclosure, Instagram had not yet offered a feature to zoom into photos in the app, which made it even more difficult to see the shoes. However, according to Puma, it could be assumed that Instagram was used almost exclusively on smartphones, where the photos could only be viewed in a small size. Ultimately, it could not be assumed that all design features of the design were already disclosed by the photos.

None of these arguments convinced the court. In the opinion of the judges, the photos were of sufficient quality to recognize all decisive design features of the design. In some of the photos, the shoes and not Rihanna were clearly in the foreground. Even without the zoom feature, it was also possible to take screenshots of the Instagram photos at the time of the post in order to enlarge them outside of the app. Ultimately, due to Rihanna’s high profile, it must be assumed that both her fans and the relevant professional circles would have an increased interest in the clothing she wears in Instagram photos published in the context of the signing of a contract that makes her the new creative director of a fashion company.

Implications

The court’s decision is hardly surprising, but rather confirms the existing case law regarding prior disclosures that are prejudicial to novelty. However, the example also clearly shows that the one-year grace period can often become a stumbling block. This does not only apply to world-famous pop stars. The publication of photos of a new design on the company website or the corresponding social media channels also quickly constitutes a disclosure within the meaning of Art. 7 CDR. If no designs have been registered at this time, you should therefore always be aware that the clock for filing an application can start ticking from this publication.

Portrait of Dr. Adrian Steffens smiling relaxedly at the camera with his arms crossed.

Patent Applications for AI Technologies at Record High

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The innovation landscape in the field of artificial intelligence (AI) is flourishing. This is the result of a recent analysis by the German Patent and Trade Mark Office (DPMA). Speaking in Munich, Eva Schewior, President of the DPMA, reported that the number of patent applications for Germany has risen by 40 percent over the past five years, particularly in technology classes with a strong connection to AI. The core areas of AI, including special digital computer systems and neural networks, including the associated learning methods, have even seen a tripling of applications since 2019.

This development shows that AI technologies, such as generative tools, are increasingly being integrated into everyday life and are likely to play an important role in many areas of life in the future. In addition to the core areas, the DPMA found a high level of innovation in fields such as image analysis, computer technology, medical technology and transport and vehicle technology.

In terms of patent applications for the German market, US applicants lead with a share of 32.4 percent of all applications published in 2023. Germany follows with 17.1% and Japan with 12.4%. China and the Republic of Korea show the largest increase in publications compared to the previous year.

Inventions related to AI are regularly based on mathematical models implemented as software. Patent protection for these computer-implemented methods is limited in that computer programs as such are not patentable. Instead, patent protection requires that the invention contributes to solving a specific technical problem by technical means. This contribution may, for example, relate to the control of an autonomous vehicle.

BOEHMERT & BOEHMERT has already supported and accompanied many of these AI patent applications. With our experience in the field of AI technology, we are able to advise our clients in a targeted manner and respond specifically to their needs in the dynamic environment of AI innovations.

Trade Mark Misuse in Practice

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To the chagrin of honest entrepreneurs, trade marks are sometimes misused and used against them. The aim of the applicant may be to obtain a blocking position against competitors. Alternatively, the application may be speculative, based on the hope that a company will want to use the mark for its goods or services in the future and will therefore buy or license it from the applicant.

Case Law on Bad Faith Trade Mark Applications

Businesses are not unprotected against such trade mark applications. Case law divides these cases into those with and without intent to injure, under the general heading of bad faith. If, for example, a trade mark application is filed to prevent a competitor from continuing to use the trade mark, bad faith is usually present because of the intention to block and obstruct. Since the Classe E decision, the German Federal Supreme Court (Bundesgerichtshof – BGH) has also assumed that there is an “abusive exploitation of a merely formal legal position” if someone

  • registers a large number of trade marks
  • has no serious intention of using the marks, and
  • the trade marks are essentially hoarded for the purpose of obtaining injunctions and claims for damages against third parties using identical/similar designations (BGH, judgement of 23 November 2000, I ZR 93/98, § 35 – Classe E).

Proof of the subjective elements, i.e. proof of the applicant’s lack of intention to use, is regularly problematic in the practical application of the law.

Abusive Exploitation of a Merely Formal Legal Position

The requirements laid down by the BGH have recently been applied by the regional courts in Stuttgart and Hamburg in several cases. A manufacturer of sports watches, represented by BOEHMERT & BOEHMERT, faced Capella EOOD, a company based in Bulgaria and represented by Mr Erich Auer. Mr Auer is well known in the trade mark scene for having registered thousands of trade marks over the years through various shell companies such as Ivo-Kermatin Ltd, Suebi Ltd and Segimerus Ltd. In the present case, he took action against the watch manufacturer and its European dealers on the basis of one of these many trademarks. The case concerned a sports watch offered under the same name as the trade mark. In response to these warnings, we issued a letter of cease and desist to Capella EOOD on behalf of the watch manufacturer for unauthorised warnings of intellectual property rights. This is because a claim for injunctive relief under trademark law is precluded by the defence of abuse of rights in the case of an application made in bad faith, i.e. it cannot be enforced in the long term.

The Regional Court of Stuttgart had to decide and issued a preliminary injunction against Capella, which we had applied for and which it confirmed on opposition (judgment of 18 October 2023, 32 O 73/23 KfH, not yet final). The difficulty in the proceedings was to establish that the trade mark applicant had no subjective intention to use the trade mark and was acting in bad faith based on the objective circumstances of the case. The following facts indicated that the applicant had never intended to use the trade mark itself in its own business or for third parties on the basis of a consultancy concept: no external marketing efforts were made, no comprehensible business model or trade mark concept could be presented, and the trade mark was transferred back and forth between Erich Auer’s various companies. In addition, the applicant cancelled the majority of its trade marks after the expiry of the official deadline for the payment of fees. All in all, there was every indication that he had hoarded the trade marks essentially for the purpose of obtaining injunctions and damages against third parties using identical or similar designations. This constituted an abuse of the formal legal position of the trade mark proprietor. The Stuttgart Higher Regional Court (Oberlandesgericht) dismissed Capella’s appeal against this decision on the grounds that it was obviously unlikely to succeed under Section 522(2) of the German Code of Civil Procedure (ZPO) (decision of 27 February 2024, 2 U 187/23).

This is not the first decision in which Mr Auer’s business model has been found to be dishonest. Only recently, the General Court of the European Union also found bad faith in one of his trade mark applications – in this case by Copernicus EOOD (General Court, judgment of 17 January 2024, T-650/22 – ATHLET).

Radiator grille element infringes Audi brand

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In its judgment of January, 25 (C-334/22), the CJEU clarified that a car manufacturer can prohibit the use of a sign for spare parts if it contains an element that is similar or identical to a trademark.

Audi’s well-known four-rings trademark is registered in the EU for vehicles and spare parts, among other things. A Polish dealer was selling copied radiator grilles intended for older Audi vehicles. The radiator grilles contained an element whose shape is similar or identical to the Audi trademark and is also intended for mounting the four-ring trademark.

In 2017, Audi took action against this dealer in Poland. The aim was to obtain a ban on marketing copied radiator grilles of the aforementioned type. The Polish court referred the case to the CJEU with the request to clarify whether the marketing of replacement car parts at issue (specifically: radiator grilles) constituted “use of a sign in the course of trade” that could impair the functions of the Audi brand. Furthermore, the national court wanted to clarify whether the owner of this trademark can prohibit a third party from such use.

In its judgment, the Court affirms this. It states that in the present case, the radiator grilles did not originate from the trade mark proprietor and had been placed on the market without its consent. The part intended for affixing the Audi emblem was integrated into the radiator grilles for their marketing by the third party. It is therefore visible to the public wishing to purchase such a spare part. This could constitute a factual link between the spare part in question and the owner of the AUDI mark. Therefore, such use could impair the functions of the trademark (including the origin or quality of the goods).

However, the specific legal dispute still has to be decided by the court in Warsaw, which is bound by the legal opinion of the CJEU. The CJEU left it to the Polish court to examine whether the disputed part on the radiator grille is identical or similar to the Audi brand.

Should Audi actually prevail in the proceedings, the practical consequence of the ruling is likely to be that radiator grille manufacturers will in future maintain a significant distance from (automotive) brands when designing corresponding products in order to avoid brand collisions.

Copyright and freedom of use – the Warhol case

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In May 2023, the US Supreme Court surprisingly restricted artistic creativity in favor of broad copyright protection.

This article first explains how the Supreme Court limited the scope of permissible re-use. It then outlines current approaches in German case law regarding the adaptation and transformation of copyrighted works.

The doctrine of fair use in US law

The decision of the US Supreme Court was based on a portrait of the musician Prince that Andy Warhol produced as a silkscreen from a photograph taken by the plaintiff, Lynn Goldsmith. By licensing “Orange Prince” to the media company Condé Nast, the Andy Warhol Foundation had infringed the photographer’s copyrights.

The legal issue was the doctrine of fair use. This is set out in Section 107 of the US Copyright Act. The fair use doctrine is a four-factor test of whether a copyrighted work has been fairly used: (1) the purpose and character of the use; (2) the nature of the copyrighted work; (3) the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and (4) the effect of the use on the potential market for or value of the copyrighted work.

The Supreme Court looked at the first factor. This factor considers whether the new work is being used for commercial or nonprofit educational purposes, and whether the transformation has added something new, such as an additional purpose or a change in character. Based on these criteria, the court rejected fair use and thus upheld Goldsmith’s claim. The key factor was that Warhol’s work had been used commercially. Furthermore, the modified portrait did not represent something fundamentally different or new. Not every slightly modified copy could enjoy copyright protection, otherwise it would be circumvented and thus undermined.

The court of first instance had accepted fair use on the grounds that Warhol had changed the character of the photograph. This is because Prince appears vulnerable in the photograph, but iconic in the image. The work was therefore immediately identifiable as a “Warhol” work. Supreme Court Justice Kagan’s minority opinion also follows the classic utilitarian approach. She fears that the majority decision will stifle creative progress and undermine creative freedom.

Free use and copyright limitations in German law

In Germany, two approaches to such borderline cases – between exclusivity and freedom of access – are currently conceivable:

First, the approach of the Federal Court of Justice: For adaptations or other modifications of a work, Section 23(1) Act on Copyright and Related Rights (UrhG) provides that the author’s consent is not required only if the newly created work maintains a sufficient distance to the work used. According to the Porsche 911 decision of the Federal Court of Justice, this so-called free use requires that “in view of the uniqueness of the new work, the borrowed personal characteristics of the protected older work fade away”. Fading in this sense occurs when the new work is so distant that the personal characteristics of the old work recede. The use of the older work may only appear as an inspiration for a new, independent work (BGH, judgement of 7 April 2022 – I ZR 222/20, § 43). In some instances, this case law even permits the clear adoption of the older work, provided that this is necessary for the artistic creation.

The Higher Regional Court of Hamburg recently took a different approach: the reproduction of the song “Metall auf Metall” and its transformation into an independent new work by means of sampling falls under the term pastiche within the meaning of Section 51a UrhG and is therefore a legally permissible use (judgement of 28 April 2022 – 5 U 48/05). The Federal Court of Justice stayed the subsequent appeal proceedings (case I ZR 74/22) and referred the question to the European Court of Justice.

Whichever way you look at it, the BGH and OLG Hamburg seem to have internalized the mantra “Cultural creation must build on the earlier work of other authors” more than the US Supreme Court. Over here in Germany, the Warhol case might have ended differently.

 

Advertising with Green Claims

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Few issues have been as ubiquitous in recent years as climate change. The crisis is in the news every day. No wonder, then, that the climate is also making waves in competition law: greenwashing – as the demand for environmental friendliness increases, so does the attraction for companies to advertise with such terms, and the potential for misleading.

Growing Demand for Sustainable Products

Consumers want to live green: According to recent studies, 88% of global respondents say they would buy sustainably if given the opportunity; 77% want to spend money only on brands with green and sustainable advertising within the next five years’ time (dentsu, The Rise of Sustainable Media, 2021). 73% of Gen Z are even willing to pay more for sustainable products (First Insight, The State of Consumer Spending: Gen Z Shoppers Demand Sustainable Retail, 2020). There is a shift in consumer expectations. Sustainable products and services are increasingly in demand with a high willingness to pay. Many companies are seizing this opportunity. Advertising sustainability is becoming a selling point.

Greenwashing and the Unfair Competition Act

In many cases, however, advertising promises are not kept. In 2021, the EU Commission analysed company websites for their environmental promises. 37% of websites advertise sustainable, environmentally friendly or carbon neutral companies and their products or services, but in reality they are not or only partially sustainable. 59% of sites contain unsubstantiated information, making the promises unverifiable. According to the analysis, a total of 42% of websites violate the Unfair Commercial Practices Directive (EU Commission, Screening of Websites for ‘Greenwashing’: Half of Green Claims Lack Evidence, 2021). The competition authorities and consumer associations in particular want to remedy these shortcomings and are committed to protecting consumers and the environment. As a result, greenwashing is increasingly becoming the subject of legal proceedings. These proceedings are based on Sections 5 and 5a of the German Unfair Competition Act (UWG). According to these provisions, business activities are misleading if they contain untrue statements or other statements that are likely to mislead, in particular with regard to the essential characteristics of the product or service. The relationship with the environment is one such essential characteristic, as it relates to the nature of the product.

Legal Development: Prohibition of Misleading Claims and Information Requirements

Environmental claims are in principle allowed. However, as in the case of health advertising, they are subject to strict legal standards—following a ruling by the Federal Court of Justice in the 1980s. The main reason for this is the emotional appeal of sustainability advertising. It arouses consumers’ concern for their own health and a sense of responsibility for future generations.

The risk of being misled is particularly high with terms whose meaning and content are (still) unclear: environmentally friendly, sustainable, organic, to name but a few. There is an increased need for clarification on the part of the target public. A clearly visible, informative label is therefore required. The stringency of this label will be determined on a case-by-case basis, depending on the type of product and the degree and extent of its environmental friendliness. In the case of relative sustainability, for example, the respective advantage of the product must be explicitly stated (Higher Regional Court Bremen, judgement of 23 December 2022, 2 U 103/22). Climate or CO2 neutrality is understood by the courts to mean a balance of CO2 emissions, which can be achieved either through avoidance or through compensation. In the case of compensation measures, it must be explained in the advertising whether, for example, CO2 certificates have been purchased or third-party climate projects have been supported. If a quality label is used, information on the test criteria must be provided (Higher Regional Court Frankfurt/Main, judgement of 10 November 2022, 6 U 104/22). As far as the scope of information requirements is concerned, it is generally true that consumers become more interested in details the more prominent an issue becomes in their minds. And climate change is currently omnipresent.

Recommendations and Outlook

Advertising with environmental claims is lucrative for companies. But caution is needed. To avoid misleading consumers, an informative reference to the more detailed circumstances to which the claim refers is usually required. Companies should therefore be specific about the benefits of their product or service. The reference must be consistent, clear, and easily readable. Eco-labels must also be accurate and verifiable.

In the future, companies should keep abreast of current legislative projects in this area. The EU Commission is committed to climate protection. There are proposals to amend the Unfair Commercial Practices Directive to empower consumers for environmental change through better protection against unfair practices and better information (COM/2022/143) and for a Directive on environmental claims (COM/2023/166). In addition, the financial market will be incentivised as it can direct capital flows towards sustainable investments to achieve sustainable and inclusive growth. The Disclosure Regulation (EU 2019/2088) in conjunction with the Taxonomy Regulation (EU 2020/852) are particularly relevant.