According to earlier German case law, the use of a trademark could infringe a prior company name, and the use of a company name could infringe a prior trademark. As the German Federal Court of Justice (FCJ) held in its judgment of Oct. 9, 2003 (Case I ZR 65/00 – Leysieffer
), the scope of protection of company names and trademarks overlaps because of their joint function as indicators of origin. Therefore, the court opined, a company name can be infringed if used by a third party as a trademark, and a trademark can be infringed if used by a third party, offering similar goods and services, as its company name.
These principles seemed to be obsolete after the Court of Justice of the European Union (CJEU), in its judgment in Céline
(Céline SARL v. Céline SA
, Case C-17/06 (CJEU Sept. 11, 2007)), held that
the unauthorised use by a third party of a company name, trade name or shop name which is identical to an earlier mark in connection with the marketing of goods which are identical to those in relation to which that mark was registered constitutes use which the proprietor of that mark is entitled to prevent [under the European Trademark Directive] (First Council Directive 89/104/EEC of 21 December 1988 to approximate the laws of the Member States relating to trade marks), where the use is in relation to goods in such a way as to affect or to be liable to affect the functions of the mark.
The CJEU also stated that
[t]he purpose of a company, trade or shop name is not, of itself, to distinguish goods or services … [but] to designate a business which is being carried on. Accordingly, where the use of a company name, trade name or shop name is limited to identifying a company or designating a business which is being carried on, such use cannot be considered as being “in relation to goods or services” within the meaning of Article 5(1) of the [European Trademark] [D]irective.
Only two days after the judgment in Céline
was issued, the FCJ issued its judgment in THE HOME STORE
(Case I ZR 33/05 (Sept. 13, 2011)), in which the court referred to Céline
in holding that Community trade marks (CTMs) are not protected against use of the same “sign” as merely a company name. As previously reported, in THE HOME STORE
decision the FCJ refused to extend protection for the stylized CTM for THE HOME DEPOT, protected for, inter alia
, typical do-it-yourself goods, to prohibit use of the mark THE HOME STORE in a similar design as a name for a company in the do-it-yourself goods market (INTA Bulletin, Vol. 63, No. 12 (July 1, 2008)
These developments caused great concern among trademark owners within the European Union regarding the enforceability of their trademarks against similar or even identical company names. In addition, the question of whether a term or “sign” is used as a trademark and/or a company name plays an important role in the European jurisdiction for determining what kind of use is sufficient to preserve the rights of the proprietor of a trademark after expiry of the applicable five-year grace period. In this respect, the FCJ held that the mere use of a trademark as a company name is not sufficient to preserve the trademark rights of the proprietor (see Case I ZR 293/02 (FCJ July 21, 2005) – Otto
; Case I ZB 10/03 (FCJ Sept. 15, 2005) – Norma
However, in Céline
the CJEU held that “there is use ‘in relation to goods’ within the meaning of Article 5(1) of the [European Trademark] [D]irective where a third party affixes the sign constituting his company name, trade name or shop name to the goods which he markets.”
In addition, the FCJ clarified in its decisions of April 3, 2008 (Case I ZR 49/05 – Schuhpark
, (at para. 22)) and December 18, 2008 (Case I ZR 200/06 – Augsburger Puppenkiste
, (at para. 48)) that the mere use of a company name as such cannot be deemed also to be use as a trademark.
Yet, the question remained what can be considered to be mere use as a company name and what can be considered also use as a trademark.
In 2011 and 2012, the FCJ issued two decisions in favor of trademark owners that show that (i) the use of a company name can be deemed exclusively use as a company name only in a very limited number of cases and that (ii) on the other hand, the use of a trademark generally falls within the scope of protection of a company name. These two decisions are the FCJ’s judgments of April 14, 2011 (Case I ZR 41/08 – Peek & Cloppenburg II
) and of April 19, 2012 (Case I ZR 86/10 – Pelikan
), discussed below.
Judgment of April 14, 2011, Case I ZR 41/08–Peek & Cloppenburg II
In Peek & Cloppenburg II
the FCJ referred to its Otto
judgments and stated that the use of a trademark is only sufficient to preserve the trademark rights of the proprietor if the use is consistent with the trademark’s main function of guaranteeing the identity of origin of the goods by enabling the public to distinguish the goods from those of other origin. The FCJ held that this is not the case if the mark is used exclusively as a company name
, regardless of whether the trademark owner is a manufacturer or retailer.
However, the FCJ confirmed the findings of the contested judgment of the Higher Regional Court of Düsseldorf, which had held that, due to widespread practice within the fashion sector, the public is used to recognizing the term “EDUARD DRESSLER designed for Peek & Cloppenburg” as an indication of origin referring to the company name “Peek & Cloppenburg,” even though the trademark owner mainly trades in textiles manufactured by others. The FCJ also stated that the term “designed for” does not contradict the assumption that the company name “Peek & Cloppenburg” guarantees the identity of origin of the marked goods and that the public recognizes it as an indication of origin (FCJ–Peek & Cloppenburg II
, paras. 23–26).
In an obiter dictum in paragraph 44 of the same judgment, the FCJ also stated that the case law of the CJEU—according to which mere use of a company name as such does not constitute use within the meaning of Article 5(1) of the European Trademark Directive—does not apply to the opposite situation of a conflict between an older company name and a younger trademark, explicitly referring to its Leysieffer
judgment of October 2003.
According to the FCJ, the protection of a company name under Sections 5 (2), 15 (2) and (4) of the German Trademark Act only requires the use of the conflicting marks as “signs” in commerce (irrespective of whether they are used as a trademark or a company name). The FCJ confirmed this view in its recently published judgment of March 22, 2012 (Case I ZR 55/10 – METRO vs ROLLER’s Metro
, para. 11).
Judgment of April 19, 2012, Case I ZR 86/10–Pelikan
Referring to its own previous case law and that of the CJEU, the FCJ ruled in Pelikan
that a trademark is not used “in relation to goods or services” within the meaning of Article 5(1) of the European Trademark Directive if the challenged “sign” is exclusively used as a company name (para. 29 et seq.).
The FCJ further stated that use of a “sign” as a company name can, however, at the same time constitute use as a trademark. According to the FCJ, this is true if the use of the “sign” affects or is liable to affect the function of guaranteeing the origin of goods/services, namely if the use of the company name—for instance by affixing it on goods or by its use in advertisements for goods and services—causes the public to perceive a link between the challenged company name and the goods or services marketed by the proprietor of the older trademark.
In this respect, the FCJ demonstrated a very broad understanding of “use as a trademark.” It held that the use of the distinguishing elements of the company name “Musikschule Pelikan GmbH” as a domain name (musikschule-pelikan.de) and on the Internet had to be considered “use as a trademark” in the meaning described above.
The FCJ substantiated its findings by stating that the defendant’s website established a link between the challenged “sign” and the defendant’s services, since the Internet user is referred from the first webpage to three other webpages containing service offerings, prices and instructions for applying to the school. In the upper sections of the pages, which describe the services offered by the defendant, one would find the company name of the defendant.
The FCJ shows a strong tendency of going back to its earlier principles, according to which the scope of protection of company names and trademarks overlap, by applying a fairly high standard for a finding of a mere use of a company name as such, that is, a use that cannot be considered as being “in relation to goods or services.” This is good news for trademark owners, as well as for owners of “older” company names to which the FCJ does not apply the CJEU’s rather strict and artificial distinction between use of a “sign” as a company name and use as a trademark.
The FCJ’s post-Céline
decisions strengthen the scope of protection of both trademarks and company names. This approach seems even more justified in view of the fact that in recent decisions the CJEU has emphasized that the functions of a trademark include not only the essential function of guaranteeing to consumers the origin of the goods or services, but also other functions, in particular the guaranteeing of the quality of the goods or services in question and those of communication, investment or advertising (see CJEU, June 18, 2009, Case C-487-07 – L’Oréal v. Bellure
, para. 58; CJEU, March 23, 2010, Case C-236/08 - Google France
, para. 77; CJEU, September 22, 2011, Case C-323/09 – Interflora
). There is hardly any case conceivable in which a younger company name would not affect at least one of these functions of an older identical or similar trademark registered for goods and services distributed by the younger company (or vice versa).
Although every effort has been made to verify the accuracy of items in the INTA Bulletin, readers are urged to check independently on matters of specific concern or interest.
© 2013 International Trademark Association