mardi, novembre 23, 2010

Germany: Federal Supreme Court rules on use of trademarks on scale models

Federal Supreme Court rules on use of trademarks on scale models

Contributed by Klinkert Zindel Partner

 

Legal context
Facts
Federal Supreme Court ruling
Comment


A recent Federal Supreme Court judgment will be widely welcomed by manufacturers of replica model cars in Germany.
(1) The case addressed the question of whether car manufacturer Adam Opel AG could prohibit the use of its well-known logo on toy cars.

Legal context

In a similar manner to Article 5 of the EU Trademark Directive (2008/95/EC), Section 14(2) of the Trademark Act prohibits third parties from using, in the course of trade, without the consent of the proprietor of the trademark:

·                          any sign which is identical to a trademark in relation to goods or services which are identical to those for which that trademark is protected;

·                          any sign in relation to which, as a result of its similarity to a trademark and the identity or similarity of the goods or services covered by that trademark and the sign, there exists a likelihood of confusion on the part of the public, including the likelihood of association between the sign and the trademark; or

·                          any sign which is identical or similar to a trademark in relation to goods or services which are not similar to those for which the trademark is protected, where the trademark has a reputation in Germany and where the use of the sign, without due cause, takes unfair advantage of or is detrimental to the distinctive character or reputation of the trademark.

The trademark holder's right to prohibit a third party from using its trademark has certain limits. Only those uses which fall within the meaning of Section 14(2) of the act may be prohibited. Thus, a trademark holder cannot prohibit a third party from displaying its trademark if such use is intended only to describe the characteristics of goods in terms of type or quality, for example.

Facts

Opel – one of Europe's largest and best-known car manufacturers – has registered the following logo as a device mark in relation to cars, as well as for 'toys' (a term which includes scale models) in Germany:

The German company Autec manufactures and sells remote-controlled cars under the German registration 'Cartronic', including a scale model of the Opel Astra V8 Coupé. The radiator grille of the scale model bears the Opel logo in the same place and on the same scale as the full-size car. The manual and the remote control transmitter included with each model features the 'Cartronic' mark and the indication 'Autec AG'. The sign used by Autec is identical to the registered mark, and is being used in connection with toys which are identical to those in respect to which the Opel logo was registered. Therefore, Autec used a sign identical to the trademark registered by Opel for toys (ie, goods identical to those for which Opel's trademark was registered). This led Opel to request the Nuernberg-Fürth District Court to prohibit Autec from using the Opel logo.(2)

In the proceedings, Opel argued that Autec's use of the Opel mark for toy cars constituted use as a trademark, since the public would assume that the manufacturer of replicas would have obtained a licence for its manufacturing and distribution activities from the trademark holder.

Autec argued that affixing a registered mark to scale models did not constitute use as a trademark as such. The essence of Autec's argument was that the Opel logo was used on the toy cars merely to replicate the car as accurately as possible. This, Autec argued, did not constitute a 'use' of the registered mark and Opel was not entitled to prevent it, since it would be obvious to the public that the scale models did not originate from Opel. Therefore, Autec argued, the essential function of the trademark was not compromised.

The district court referred this matter to the European Court of Justice (ECJ) for a preliminary ruling. In Case C-48/05, the ECJ ruled that the:

"affixing by a third party of a sign identical to a trademark registered for toys to scale models of vehicles cannot be prohibited under Article 5(1)(a) of the directive unless it affects or is liable to affect the functions of the trademark."

Furthermore, the ECJ held that:

"for the referring court to determine, by reference to the average consumer of toys in Germany, whether the use at issue in the main proceedings affects the functions of the Opel logo as a trade mark registered for toys."

Therefore, the crucial question to be addressed was whether the average consumer would perceive the use of the Opel logo on the model car to be a hint as to the origin of the scale model, or regard the logo merely as a feature which was necessary to replicate the car accurately, without making any indication as to the origin of the model car.

The Nuernberg-Fürth District Court ruled that the use of Opel's trademark by Autec could not be prohibited. Although Autec's use of the mark had to be regarded as 'use' within the meaning of Article 5 of the directive, the average consumer would not assume that a scale model which bore a trademark necessarily originated from the holder of that trademark. Rather, the consumer would assume that the trademark was being used merely in order to replicate the full-size car.(3)

This decision was upheld by the Nuernberg Court of Appeal.(4)

Federal Supreme Court ruling

In its January 14 2010 decision, the Federal Court of Justice confirmed this ruling, holding that there had been no infringement of the claimant's rights under Section 14(2) of the Trademark Act.

The court found that the requirements of trademark infringement under Section 14(2)(1) of the act were met insofar as the affixing of Opel's trademark on the defendant's toy car constituted use of a sign that was identical to Opel's mark on identical goods (toys). However, in view of the court, this use did not affect the main function of the trademark, which was to indicate the trade origin of the goods, nor did this use affect any other functions of the trademark, since the consumer would merely regard the logo to have been affixed on the model in order to best replicate the full-size car. Consequently, the logo would be seen only as a reproduction of a detail of the original car. The court stressed that German consumers would not consider the mark to be a reference to the trade origin of the toy car.

The court further held that, given that Opel's trademark was registered in relation to motor vehicles, the categories of goods concerned (ie, model cars and motor vehicles) were not sufficiently similar as to lead to a likelihood of confusion, as is required by Section 14(2)(2) of the act.

Finally, the court took the view that there had been no infringement under Section 14(2)(3) of the act in relation to the mark's reputation, since no unfair advantage had been taken and no detriment had been caused to the repute of the claimant's mark, insofar as it was registered for motor vehicles.

Comment

In light of this decision, in future it will be difficult for car manufactures to prevent toy manufacturers from using their trademarks on model cars, even if these trademarks are also registered in relation to toys.

The rationale behind this decision could apply to any matter involving the production and placing on the market of replicas, provided that the original product bears a trademark that can also be found on the replica (eg, scale model trains or scale model kitchens).

In sectors in which it is customary for replicas to replicate the original product accurately, affixing a trademark to a replica does not constitute trademark infringement, except where such use would be detrimental to the distinctive character or reputation of the trademark owner. This may be the case where the goods to which the trademark is affixed without the trademark holder's consent are of poor quality. Whether this is the case is a question of fact. For example, in light of this ruling, it could be argued that a car manufacturer which also holds the rights to a trademark in relation to computer games cannot prohibit a producer of computer car racing games from using its trademark on the virtual reproduction of the car. However, this would be true only if the reproduction of the virtual car was faithful to the real-life car, including in its depiction of the car manufacturer's trademark and in the position and size of the mark on the car. Additionally, such trademark use must not be detrimental to the distinctive character or reputation of the car manufacturer's trademark. This would not be the case if the depiction of the trademark holder's car was of high quality. As such, at least in Germany, the need to obtain licences for such use may be called into question.

For further information on this topic please contact
Thomas Körber at Klinkert Zindel Partner by telephone (+49 69 972 65 600), fax (+49 69 972 65 6099) or email (t.koerber@klinkert.pro).

Endnotes

(1) Opel v Autec, Decision I ZR 88/08.

(2) Nuernberg-Fürth District Court, May 11 2007, Case 4 HK O 4480/04; WRP 2007, p 840.

(3) Ibid.

(4) Case 3 U 1240/07, April 29 2008.