German Constitutional Court further strengthens equal arms in preliminary injunction matters

/in

Both parties’ right to be heard in court is a central aspect of equal arms. It has been decades of practice that defendants in injunction proceedings are only heard in the oral hearing if they object, i.e. when the preliminary injunction has already issued – and had to be observed. The German Constitutional Court already partly put paid to this practice in September 2018  (1 BvR 1783/17). The defendant had to be heard before a decision was made. Suitable means for this are, for example, a cease-and-desist letter sent out of court or an oral hearing being conducted before judgement is entered into.

In a very recent decision from June 2020 the German Constitutional Court developed a second, even stronger bolt (1 BvR 1246/20). If a cease and desist letter was sent but the court order is then sought on extended or different legal aspects, the defendant must be heard again before a decision is issued in favour of the plaintiff.

The possibility of dispensing with an oral hearing in urgent cases under § 937.2 of the Code of Civil Procedure does not allow the defendant to be kept out of the proceedings until the order has been issued. Even in urgent cases it is possible for the court to pick up the phone or even communicate with the defendant by e-mail.

Both parties must be involved in the proceedings on an equal footing. Secret proceedings are not acceptable. Subsequent procedural rights only after the injunction issued do not cure violations of procedural rights beforehand.

The German Constitutional Court grants not only the bolt, but also, so to speak, the lock for the disadvantaged defendant to fence in court and plaintiff: the direct constitutional complaint against the order for the preliminary injunction, when it is contrary to constitutional rights! And that without the need to obtain in advance, for example, the suspension of the enforcement or a declaratory judgment at the Regional Court.

It is advisable to hear defendants comprehensively before court proceedings or to have very good reasons for not doing so. The possibilities of scoring “surprise hits” have been further significantly restricted.

Clear distinction between trademarks for goods and trademarks for retailers

/in

The German Federal Patent Court makes it clear that trademark protection for online retail services in class 35 does not cover the offering of goods of the retailer himself.

Background

In two decisions of October 4, 2019 (28 W (pat) 3/19) and of January 20, 2020 (29 W (pat) 41/17) the 28th and 29th Senate of the German Federal Patent Court had to deal with the genuine use of two German trademarks for services in class 35. Whereas the 28th Senate held that a genuine use of a trademark for online retail services in class 35 is also to be found when the proof of use only relates to the distribution of the trademark owner’s own goods, the 29th Senate contradicts this view: Retailing with the trademarks owner’s own goods does not count as service as covered by a trademark, given that the activities protected by a trademark are different for goods than in relation to retail services; only trademarks protected for goods cover the offering of the own goods of the trademark holder; trademarks for retail services on the other hand also cover the activities of the presentation of the products, such as putting together an assortment of goods, which makes it easier for the customer to make its decision, which products it is going to buy.

Merits of the cases

The 28th Senate as well as the 29th Senate of the German Federal Patent Court had to deal with oppositions filed (i) on August 30, 2013 against German trademark registration 30 2013 019 073, word/device: CARRERA , and (ii) on March 27, 2013 against German trademark registration 30 2012 042 608, word: Carrera. Both marks claimed amongst others protection in class 35 for online retail services.

The German Patent and Trademark Office upheld the oppositions. However, the owner of the contested marks appealed the decision and raised the plea of non-use according to Sec. 43 I, II of the German Trademark Act. The use evidence filed by the opponent was in its entirety related to a use by a licensee.

Content of the decisions

The 28th Senate comes to the conclusion that the genuine use of the opposition mark in relation to online retail services has been proven. The fact that according to the use evidence provided all of the offered goods were stemming from the opponent itself, did in the Senate’s view not prevent the existence of online retail services. In its reasoning the 28th Senate holds that it is the purpose of online retail services – which is also true for retail services as such – to sell goods to customers. The Senate goes on to argue – by pointing to the “Praktiker” decision of the European Court of Justice that retailing does not only coverthe conclusion of purchase agreements but also the selection of an assortment of goods to be offered for sale as well as several other services, which are meant to lead the consumer to purchase its goods from this retailer and not from another one. In view thereof the 28th Senate’s holds that is not required that the goods are stemming from different manufacturers. Also a retailer selling its own goods is in competition to other offers of the same goods of different manufacturers and is interested that the customers enter into a purchase agreement with him. The 28th Senate concludes that the specific activities of a retailer are not characterized by the origin of the goods.

Contrary to the 28th Senate the 29th Senate is of the opinion that dealing with one’s own goods (which is also the case in relation to a licensee) does not count as a service in a trademark-wise sense. The 29th Senate considers the core of the economic and legal activities of a retailer to lie in the collection of goods of different origins in order to put together an assortment and offering the same in a sole distribution site, either stationary or as mail order business or in electronic commerce.

Although the European Court of Justice did so far not explicitly deal with the question whether or not it considers the scope of protection of a service mark in class 35 to only cover retailing with goods of third parties or also with goods of the trademark owner itself, according to the 29th Senate it could be concluded from the reasoning of the Court in its decision relating to the Apple Store that the scope of protection does not cover the offering of the retailers own goods since this does not count as a service within the meaning of Art. 2 of the Trademark Directive 2008/95. According to the Directive only retailing in relation to external goods is covered by class 35 since the provision of a service requires the acquisition of goods of third parties. The 29th Senate goes on to argue that retailers are required to present to their customers different goods of different origins in order to render it easier for the customers to select between the different goods. In contrast, the distribution of goods by the manufacturer itself is covered by trademarks claiming protection for goods. Consequently, according to the 29thSenate, theyare not covered by the scope of protection of a service mark.

Conclusion

The decision of the 29th Senate of the German Federal Patent Court makes a clear distinction between trademarks claiming protection for goods and service marks. This clarification is highly appreciated, given that the European Court of Justice did neither in its “Praktiker” decision nor in its “Apple Store” decision explicitly answer the question whether trademarks claiming“retail services” in class 35 only cover retailing of third party goods or also of own goods of the trademark owner. The decision of the 29th Senate therefore clarifies that the scope of protection of a service mark does not cover the offering of the trademark owner’s own goods in lack of a “service” rendered to third parties.

Before registering a trademark it is important that the trademark owner makes up its mind as to what kind of protection the registration is sought for. In case that trademark protection for the offering of own goods is requireda trademark in relation to specific goods needs to be registered. Only in cases where the planned commercial activities are related to the collection and assortment of third party goods, trademark protection in class 35 needs to be applied for.

Author: Dr. Anja Ruge

Morality Tale – “Fack Ju Göhte” morally acceptable

/in

ECJ has provisionally concluded the registration proceedings regarding EU-trademark application “Fack Ju Göhte” and decided – contrary to the previous instances – that the trademark “Fack Ju Göhte” is not contrary to accepted principles of morality (decision of ECJ dated February 27, 2020 – C-240/18P).

Background

Based on the outstanding audience success, Constantin Film Produktion GmbH intended to register the movie title “Fack Ju Göhte” as an EU-trademark with the European Union Intellectual Property Office (EUIPO). Not only the EUIPO, but also the Board of Appeal and the General Court (GC) refused registration of the mark due to absolute grounds. The refusal was based on Art. 7 (1) (f) European Union Trademark Regulation (EUTMR), governing that trademarks shall not be registered which are – amongst others things – contrary to accepted principles of morality.

The refusal was based on the fact that in German, “Fack ju” was known as a slang expression for the English “Fuck you” and “Göhte” would be equated with the writer Johann Wolfgang von Goethe, inter alia because of the 2013 German hit film “Fack ju Göhte”.

“Fack ju” would be understood by the German public as corresponding to the insult “Fick dich”. According to the Boards of Appeal of EUIPO in its decision of December 1, 2016, this insult would constitute an “utterly vulgar and indecent defamation”. This vulgar insult was used to express dislike in relation to another person. If translated literally it would feature a sexual connotation since it would be understood as a demand to have sexual intercourse with oneself. With the reference to “Göhte”, the well-respected and much venerated Goethe would be posthumously denigrated “in a derogative and vulgar manner”. This argumentation was confirmed by the decision of the General Court dated January 24, 2018.

This decision has now been set aside by the European Court of Justice (ECJ) with its decision of February 27, 2020, resulting in the consequence that EUIPO has to decide again about the registration of the EU-trademark application “Fack Ju Göhte”.

Reasons for decision presented by ECJ

First of all, ECJ has pointed out that the examination to be carried out cannot be confined to an abstract assessment of the mark applied for, or even of certain components of it (see No. 43). Instead, it must be established, in particular where an applicant has relied on factors that are liable to cast doubt on the fact that that mark is perceived by the relevant public as contrary to accepted principles of morality, that the use of that mark in the concrete and current social context would indeed be perceived by that public as being contrary to the fundamental moral values and standards of society.

Both EUIPO and the General Court did not sufficiently consider such factors which include the great success of the comedy of the same name amongst the German-speaking public at large, the fact that its title does not appear to have caused controversy, the fact that access to it by young people had been authorised and that the Goethe Institute —the cultural institute of the Federal Republic of Germany which is active worldwide and has the role, inter alia, of promoting knowledge of the German language — uses it for educational purposes.

Those factors are, a priori, capable of constituting an indication that the word sign “Fack Ju Göhte” is accepted by the public at large and is not contrary to accepted principles of morality.

ECJ has also pointed out that the perception of this English phrase by the German-speaking public is not necessarily the same as the perception thereof by the English-speaking public, even if it is well known to the German-speaking public and the latter knows its meaning, since sensitivity in the mother tongue may be greater than in a foreign language. For the same reason, the German-speaking public does not also necessarily perceive the English phrase in the same way as it would perceive the German translation of it (see No. 68).

As a result, ECJ mainly criticized the lack of reason that the German-speaking public would perceive the applied mark “Fack Ju Göhte” as being contrary to accepted principles of morality, in particular against the background of the facts presented by the applicant as well as the fact that a foreign language will be perceived differently by a native speaker.

Based on these requirements, EUIPO now has to decide once again about the registration of the EU-trademark “Fack Ju Göhte”, namely, more than five years after the application was filed.

Good prospects for trademark applicants

The vague and meanwhile antiquated legal terms “public policy” or “accepted principles of morality” in Art. 7 (1) (f) EUTMR are subject of a certain subjectivity which means that the registration practices do not result in a certain stringency. To some extent, EUIPO has registered trademarks that have been refused by the national trademark offices as being contrary to accepted principles of morality and vice-versa.

ECJ has now set legally binding requirements for the interpretation of the accepted principles of morality which have to be considered by EUIPO and the national trademark offices. An abstract assessment of this legal term is not sufficient. Instead, it has to be assessed whether the use of that mark in the concrete and current social context would indeed be perceived by that public as being contrary to the fundamental moral values and standards of society.

New options for objections to registered trademarks in Germany: administrative invalidation and revocation proceedings as of 01 May 2020

/in

The German Trademark Law Modernization Act (MaMoG) essentially came into force on January 14, 2019. It implemented the EU trademark law reform, technically EU Directive 2015/2436 into the German Trademark Act (see B&B Bulletin article of 15 January 2019). With a delay – but largely within the term for implementation-, namely as of 1 May 2020, a highly practice-relevant core aspect of the implementation will come into force: namely a full administrative  invalidation procedure due to earlier rights as well as a full revocation procedure, extending the competence of the German Patent and Trade Mark Office (German PTO).

Extended range of attacks against trademark registrations

As a result of the new provisions, a new option is given for attacking registered trademarks: apart from exclusively bringing an actions before the civil courts, older rights (relative grounds for invalidity) and revocation due to lack of genuine use can also be completely invoked at an administrative level before the German PTO.

Thus, applicants might safe costs in terms of procedural economy as well as to make use of the professional competence of the registration authority. The MaMoG now offers the full trias to have registered trademarks cancelled in purely administrative proceedings – not only as until now on the basis of absolute grounds for invalidity (lack of registrability) but also for revocation (not only as formal preliminary proceedings) and due to conflicting earlier rights. Thus, the German trademark law is adapted to the systematics on the level of the European Trade Mark Regulation.

New administrative invalidation proceedings due to conflicting earlier rights

The proprietor of one or more earlier rights (within the meaning of Sections 9 to 13 of the German Trade Mark Act, i.e. on a broader basis than in opposition proceedings, for example also due to rights to names, copyright or design rights) can now for the first time obtain a declaration of invalidity and cancellation of a registered German trade mark in proceedings before the German PTO. The same applies to the withdrawal of protection of a part of an International Registration which designates Germany.

From a practical point of view, the following must be observed:

• The adversarial part of the proceedings will only be carried out if  the owner of the registered trade mark objects to the declaration of invalidity within two months of notification of the application for the declaration of invalidity; otherwise, the German PTO will declare the trade mark invalid and cancel it with effect ab initio (ex tunc).

• Relationship to opposition proceedings: official invalidity proceedings are admissible despite pending opposition proceedings, even on the basis of the same earlier right.

• In contrast to opposition proceedings, in invalidity proceedings, the „moving period of use“ continues to exist; therefore, if the grace period for use expires during the invalidity proceedings, proof of use of the earlier mark during the five years preceding the decision must be provided, if the proprietor of the challenged mark objects.

Full revocation proceedings before the German PTO

Upon request, the registration of a trade mark is revoked and cancelled, primarily if it has not been used within a period of five years. In the absence of an opposition, the trademark is cancelled – normally with effect for the future (ex-nunc). However, if the trademark owner objects within two months after notification of the application for revocation, the adversarial part of the proceedings will, as new provision, be continued before the German PTO – upon payment of a follow-up fee by the applicant.

Consequently, the applicant – in contrast to the previous law – is no longer obliged to pursue his application before the civil courts in an action for revocation.

Special procedural aspects for both options

• Alternative but not cumulative option: Civil law action and corresponding requests for invalidity or for revocation before the German PTO exclude each other for the same subject matter in dispute.

• An appeal against the decision of the German PTO may be filed with the Federal Patent Court.

• Already the written request for invalidation or revocation must be substantiated and evidence must be indicated (unlike for filing an opposition).

• Hearings shall be held in official proceedings at the request of one of the parties or if deemed relevant.

• Upon request, the providing of a security for the costs of the proceedings may be required from an applicant outside the EU/EEA.

Increased need for consultancy – far-reaching strategic decisions

Especially for owners of older rights, the options for taking action against younger trademarks increase. The strategic considerations – also relevant for negotiations on an amicable settlement – are complex. Only the following aspects can be touched upon:

Lower cost threshold for administrative proceedings, but no reimbursement

The proceedings before the German PTO are far less expensive than the corresponding legal action before the civil courts. This aspect alone will increase the number of attacks on registered trademarks for revocation and invalidation based on earlier conflicting rights on an administrative level. On the other hand and unlike in case of a successful lawsuit, there is normally no reimbursement of costs in the relevant administrative proceedings.

Reduced burden of proof concerning genuine use in administrative proceedings

An affidavit continues to be accepted as main element of the formally increased threshold to prove (instead of the showing of a plausibility) genuine use of a trademark – at least before the German PTO – in administrative proceedings. In contrast, the stricter full proof applies in legal proceedings.

Provocation of the administrative revocation proceedings in case of opposition

As is the case at the level of European Union trade marks, an owner of earlier trade mark(s) will have to consider more in detail the consequences of the filing of an opposition. Should his prior trademark have fallen out of the grace period of non-use, it might not only become subject to the plea of non-use in the context of the opposition proceedings. There is now the much more far reaching threat of total loss of such prior mark via the inexpensive counter-attack in an official revocation procedure.

All in all, the new low-cost administrative trademark cancellation procedures, while maintaining the corresponding legal action, lead to expanded strategic options, a corresponding need for advice and certainly to an increase in attacks on registered trademarks.

Provisional legal protection in patent and utility model disputes according to the judgment “Leiterklemme” of the Higher Regional Court of Munich

/in

In German proceedings for a preliminary injunction, the appeal process ends at the respective competent Higher Regional Court, so that different requirements can be made in the respective court districts with regard to the legal validity of a patent or utility model.

The courts most frequently used in patent and utility model disputes in Germany, the Düsseldorf and Mannheim courts, are, according to the case law of the Düsseldorf Higher Regional Court (cf. judgment of 11 January 2018, file no. I-15 U 66/17, marginal no. 73 – available at nrwe.de) and of the Karlsruhe Higher Regional Court (cf. last judgment of 23 September 2015, file no. I-15 U 66/17, marginal no. 73 – available at nrwe.de) of the opinion, that a patent must in principle have (due to Germany’s bifurcated system) survived s first instance validity proceeding in order for a preliminary injunction to be based on said patent or utility model; deviations from this principle are only permissible in certain exceptional cases (cf. Düsseldorf Higher Regional Court, loc. cit., marginal no. 74 et. seqq.) This standard applies even more so to utility models (cf. Düsseldorf Regional Court, judgment of 24 October 2017, file no. 4a O 90/17, marginal nos. 123 et. seq. – cited from CIP).

In recent years, the case law of the Regional and Higher Regional Court of Munich has expressly deviated from this line (cf. on patents Munich Higher Regional Court, BeckRS 2012, 16104; on utility models Munich Regional Court, judgement of 13 January 2016, ref. 21 O 22538/15 – cited from juris). As a result, a preliminary injunction could in principle also be based on patents and utility models which had not yet survived first instance validity proceedings. The validity of these rights was thus to be examined autonomously by the infringement judges on the basis of the corresponding submissions of the applicant and the objections raised by the defendant. In practice, the Munich courts were thus regularly the first choice for preliminary injunction proceedings in patent and utility model matters.

But this might now be a thing of the past:

With the decision “Leiterklemme” (judgment of 12 December 2019, file no. 6 U 4009/19 – available at gesetze-bayern.de), the Munich Higher Regional Court abandons its earlier case law and joins Düsseldorf and Karlsruhe (cf. Munich Higher Regional Court loc. cit., marginal nos. 61, 68). A positive decision on the validity of the patent or utility model can – analogous to the list of exceptions of the Düsseldorf Higher Regional Court – only be dispensed with in certain constellations (cf. Munich Higher Regional Court, loc. cit., marginal no. 61). Furthermore, utility models would, as a rule, not be considered at all as a basis for a preliminary injunction; the court does not formulate exceptions to this rule (cf. OLG Munich loc.cit., marginal no. 59).

The court sees itself induced to make this turnabout because, due to the limited possibilities of examining the validity of a patent or utility model in interim proceedings, its forecasts had from time to time turned out to be incorrect and, contrary to its summary assessment, the corresponding patents or utility models had ultimately not been considered valid by the patent offices or the Federal Patent Court respectively (cf. Munich Higher Regional Court, loc.cit., marginal no. 67).

Apart from certain exceptional cases, such as trade fair situations, is it now no longer possible to obtain interim legal protection in patent and utility model matters in Germany?

In addition to the regional courts in Düsseldorf, Mannheim and Karlsruhe, nine other regional courts in Germany have jurisdiction in patent and utility model matters. However, as these courts are less frequently called upon than the courts in Düsseldorf, Mannheim and Munich, no clear tendency can be identified here due to a lack of sufficient case law. Yet, the courts in Hamburg, Frankfurt, Braunschweig and Nuremberg, for example, do not seem to demand the secured legal validity of a patent by way of a first instance ruling (cf. e.g. Hamburg Regional Court, GRUR-RS 2015, 08240; Frankfurt Higher Regional Court, GRUR-RR 2003, 263; Braunschweig Higher Regional Court, GRUR-2012, 97, 98 and more recently Braunschweig Regional Court, GRUR-RS 2017, 126504, marginal no. 77; Nürnberg-Fürth Regional Court, BeckRS 2012, 22948). Furthermore, the Hamburg Regional Court has, in the past, issued preliminary injunctions also on the basis of a utility model (cf. Hamburg Regional Court, GRUR-RR 2015, 137).

Whether these courts will – especially in view of the turnaround of the Munich Higher Regional Court – maintain this stance in the future is, however, open.

The chances of enforcing a technical property right in preliminary injunction proceedings in Germany are thus questionable without a positive first-instance decision on its validity, irrespective of the infringement situation, and always require careful examination in each individual case.

All clear – ECJ confirms possibility of a wide scope of protection for European Union trade marks

/in

In an eagerly awaited ruling (C-371/18), the European Court of Justice (ECJ) clarified on 29 January 2020 that EU trademarks can, as before, claim protection for goods and services to a large extent. According to this ruling, a comprehensive claim for protection is neither vulnerable to cancellation due to a lack of clarity, nor can it be regarded as being in bad faith without further ado.

The decision was based on a question submitted by the High Court of Justice (England & Wales) in connection with a dispute between the Sky broadcasting group and the cloud software provider Skykick. Skykick was sued by Skykick for infringement of its EU trademarks SKY, which also claimed protection for software in Class 9 and various other goods and services similar to cloud software and corresponding services. In the UK main proceedings Skykick had defended itself, inter alia, by arguing that the indication of goods „software“ as claimed by Sky’s trademarks was too vague, as it did not clearly and unambiguously indicate what kind of software exactly was to be understood by this. Furthermore, Skykick argued that Sky could not have intended to offer software and related services under the trademark SKY and that the trademarks had been applied for in bad faith for this reason. The High Court of Justice now wanted to know from the ECJ how the arguments presented by Skykick were to be assessed under European Union trademark law.

In the event that Skykick’s arguments would have been accepted by the ECJ, this would have had serious consequences for a large number of other European Union trademarks with a comparably broad claim to protection, which would have become vulnerable to cancellation as a result.

No legal basis for cancellation due to lack of clarity or precision

However, the ECJ has come to the conclusion that a lack of clarity or unambiguity does not constitute a ground for invalidity or cancellation, as there is no legal basis for such a ground. The ECJ was also unable to identify an infringement of public order due to lack of clarity or unambiguity of the goods or services claimed. The fact remains that a detailed specification of the goods and services claimed – as required by the US Trademark Office, for example – is not necessary in the EU.

Extensive specification of goods and services per se does not constitute bad faith

Furthermore, the ECJ has clarified that filing an application for a trademark without the intention of using it for the goods and services covered by the registration may constitute bad faith if the applicant for the trademark in question had the intention either to harm third party interests in a manner contrary to fair trade practices or to obtain an exclusive right for purposes other than those belonging to the function of a trademark even without reference to a specific third party. However, the mere fact that a trademark application was filed with a broad list of goods and services is not sufficient for the ECJ to assume that the application was filed in bad faith, even if the goods and services claimed have little or nothing to do with the applicant’s field of activity. However, the ECJ emphasises that all goods and services for which the trademark has not been used after five years from registration can of course be successfully attacked with cancellation requests.

All-clear for trademark owners

Even after the ECJ’s decision, trademark applicants will still be able to use general designations for goods and services within the scope of a (EU) trademark application, as has been the case up to now, and also have the possibility to claim trademark protection to a greater extent than is appropriate for their own activities, at least for the five-year period from registration. Such a broad claim to protection can make sense in particular if an actual expansion of one’s own activity cannot be excluded at the time of application, even if there are no concrete indications for this.

Breaking: Broad Institutes CRISPR/Cas9 Gene Editing patent finally revoked in Europe!

/in

Yesterday, on January 16, 2020, the Board of Appeal in the opposition proceedings for revocation of the European patent No. EP 2 771 468, Broad Institutes initial patent claiming the gene editing approach in mammalian cells, has been revoked after 4 days of intensive proceedings at the European Patent Office (EPO) in Munich.

Nine opponents had filed oppositions against the grant of the CRISPR patent, and the appeal proceedings had been initiated by the Broad Institute after a first instance decision to revoke the patent in its entirety as not novel because of a defect in the priority claim. The Technical Board of Appeal yesterday confirmed the first instance decision surprisingly; since the day before it had indicated its preliminary inclination to refer this case to the Enlarged Board of Appeal – the highest judicial body at the EPO. However, after yesterday’s pleadings, apparently, the Technical Board changed its mind in a dramatic reversal of its previous announcements and dismissed the appeal. The patent remains revoked; the decision is final and cannot be contested for substantive reasons.

While a disaster for the Broad Institutes CRISPR patent portfolio, the decision will render development and business in the gene editing field in Europe possibly easier. From a legal point of view, the decision again confirms the long standing practice of the EPO to demand identity between the applicant of the priority application and the subsequent application, or an impeccable chain of transfer of the original priority rights to the non-identical applicant of the later application. This underlines the complexity and importance of establishing a correct priority claim under European law.