The Hard Rock Cafe case in Germany - · PDF fileDr. Morten Petersenn, Hamburg Enforcement of non-existing trade marks The Hard Rock Cafe case in Germany

Dr. Morten Petersenn, Hamburg

Enforcement of non-existing trade marks

The Hard Rock Cafe case in Germany

| 2 Hogan Lovells


| 3 Hogan Lovells

• Background

• Relationship: trademark law and unfair competition law

• Implications of earlier company name rights

• Forfeiture of unfair competition claims

• Blacklist no. 13 Annex UCP Directive

• Take away points

Agenda


| 4 Hogan Lovells

• Background






Agenda


| 5 Hogan Lovells

After the Hard Rock Cafe

Heidelberg pointed to its long-

lasting business operations during

the opposition the Hard Rock Cafe

Group withdrew the application.

1993 Preliminary injunction II

The Hard Rock Cafe Group

obtained a preliminary injunction

based on their 1986 trademark

against the use of their name by the

Hard Rock Cafe Heidelberg on

clothing.

1993 Preliminary injunction I

The Hard Rock Cafe Group opened

the first Hard Rock Café in Berlin,

Germany. Cafes in Hamburg,

Cologne and Munich will follow.

1992 Expansion into Germany

The Hard Rock Cafe Group

registered the first black/white

word-/figurative trade mark in

Germany.

1986 trade mark registration

The Hard Rock Cafe Heidelberg

starts to sell merchandising items,

like T-shirts, hats and key chains.

1985 merchandising, Germany

Since 1982, the Hard Rock Cafe

Group expands all over the world.

Nowadays, there are over 170 Cafés

in more than 50 countries.

1982 worldwide Expansion

A different party opened a Hard

Rock Cafe in Heidelberg, copying

name, logo and concept.

The first Hard Rock Cafe was

founded by two Americans in

London.

1971 Hard Rock Cafe, London


1978 Hard Rock Cafe, Germany

| 6 Hogan Lovells

• Founded 8 years before HRC obtained trademark protection in Germany and 14 years before HRC entered the German market

• No claims were made after the dispute in 1993

Hard Rock Cafe Heidelberg

• Original creator of the Hard Rock Cafe business model

• Operating worldwide, including Germany, using its nowadays well-known trademarks

• Not well-known in 1978 when Heidelberg opened

Hard Rock Cafe Group (HRC)


Background

| 7 Hogan Lovells

• Trademark law

• Unfair competition law

– Consumer misleading

• Copyright Law

The claims were based on

• the Hard Rock Cafe Heidelberg

– to stop selling merchandise items with the Hard Rock Cafe name and logo

– to stop using the name, at least without a clarifying reference

– to disclose the scale of the violation already occurred

– to pay damages

The Hard Rock Cafe Group wanted


Background: New proceeding started in 2009

| 8 Hogan Lovells


Background: Examples of attacked use of Heidelberg

| 9 Hogan Lovells



| 10 Hogan Lovells



| 11 Hogan Lovells

(29.07.2015 – 6 U 94/10 (13)

• The Hard Rock Cafe Heidelberg is allowed to keep using the logo for its restaurant, but has to add clarifying references that they do not belong to the internationally operating Hard Rock Cafe Group

Higher Regional Court Karlsruhe

(15.08.2013 – I ZR 188/11)

• The Hard Rock Cafe Heidelberg has to stop selling merchandise items with the Hard Rock Cafe logo

• It has to disclose the scale of the violation and pay damages

Federal Supreme Court


Background

| 12 Hogan Lovells

Independent. Since 1979*

*This Hard Rock Cafe doesn't belong to the worldwide operating Hard Rock Cafe Group. We guarantee there is no contractual relationship with the worldwide operating Hard Rock Cafe Group.

Sufficient clarifying reference?


Background

| 13 Hogan Lovells

(Well–Known Marks)

The countries of the Union undertake […] to refuse or to cancel the registration, and to prohibit the use, of a trademark which constitutes a reproduction […] liable to create confusion of a mark considered […] to be well known in that country […].

Art. 6bis Paris Convention

• Art. 6bis only protects trademarks for goods and does not cover service trademarks

• In addition: decisive point of time: 1978

– Time when Heidelberg opened

• there were no well-known trademarks in Germany in 1978

Paris Convention did not help


Background

| 14 Hogan Lovells

• Background






Agenda


| 15 Hogan Lovells

• Unfair competition law shall serve the purpose of protecting competitors, consumers and other market participants against unfair commercial practices

• German Act Against Unfair Competition (AAUC)

• European Directive on Unfair Commercial Practices (UCP-D)

Unfair competition law

• Trademark law shall protect a commercial brand. The goal is to allow consumers to easily identify the producers of goods and services and avoid confusion.

• German Trademark Act (TMA)

• European Trademark Directive

• Community Trademark Regulation

Trademark law

Relationship: trademark law and unfair competition law

Hogan Lovells | 16

• Trademark law and unfair competition law overlaps to some extent

– Preventing danger of confusion

– sec. 14 II no.2 TMA / sec. 5 II AAUC

– Protecting against exploitation of reputation

– sec. 14 II no.3 TMA / sec. 4 AAUC

– Regulating trademark use for comparative advertising

– sec. 14 II no.1 TMA / sec. 6 AAUC


Does trademark law preclude unfair competition claims?

Hogan Lovells | 17

• But trademark law and unfair competition law have major differences as well

– Trademarks have to be registered with some exceptions whereas the protection under unfair competition law is based on actual circumstances

– The likelihood of confusion in trademark law is determined differently than the requirement of misleading in unfair competition law

– Trademark law protects the brand owners – Unfair competition law protects competitors and also consumers!

– Therefore, in unfair competition law the right to sue is vested in trade associations and consumer groups as well



Hogan Lovells | 18

• Trademark generally does not preclude unfair competition claims

– sec. 5 V Trademark Directive

"Paragraphs 1 to 4 shall not affect provisions in any Member State relating to the protection against the use of a sign other than for the purposes of distinguishing goods or services, where use of that sign without due cause takes unfair advantage of, or is detrimental to, the distinctive character or the repute of the trade mark."

– sec. 2 German Trademark Act

"The protection of trade marks, commercial designations and indications of geographical origin in accordance with this Act shall not exclude the application of other provisions on the protection of such symbols"



Hogan Lovells | 19

• Nevertheless the Federal Supreme Court (BGH) established the principle of precedence of trademark law in Germany

– BGHZ 138, 349 – MAC Dog

– unlimited application of trade mark and unfair competition claims would result in inconsistencies

• This principle of precedence of trademark law is not in line with sec. 2 TMA and was therefore widely criticised



Hogan Lovells | 20

• The Federal Supreme Court (BGH) revoked the precedence of trademark law in the Hard Rock Cafe decision for cases of misleading commercial practices

• The Change was based on the Unfair Commercial Practices Directive

– Sec. 6 II UCP Directive

"A commercial practice shall also be regarded as misleading if, […] it causes or is likely to cause the average consumer to take a transactional decision that he would not have taken otherwise, and it involves any marketing of a product, including comparative advertising, which creates confusion with any products, trade marks, trade names or other distinguishing marks of a competitor"



Hogan Lovells | 21

• As a consequence the owners of trademarks can base their claims in classic trademark disputes on unfair competition law as well

• In unfair competition law the right to sue is vested besides competitors in trade associations and consumer groups

– New player with different interests



| 22 Hogan Lovells

• Background






Agenda


Hogan Lovells | 23

• In Germany, company names are protected in trademark law as co-called business designations

• Business designations are protected through the mere use without registration

• The company name doesn't identify goods or services but the company itself and the corresponding right is only valid for the region the name is used in

• The establishment of a company name right does not produce costs but the risks of litigation are higher without formal examination

Implications of earlier company name rights

Sec. 5 II 1 Trademark Act

"Business designations are signs used in the course of trade as a name, company name or special designation of a business operation or an enterprise"

Hogan Lovells | 24

• Re use on products (merchandise)

– The earlier company name right does not justify the sales of products with the misleading name on it

• Re use for restaurant

– Due to earlier company name use of Hard Rock Cafe can not be prohibited per se

– But: due to unfair competition claims Heidelberg may not use name and logo in misleading way

Implications of earlier company name rights

Sec. 5 II 1 Trademark Act

"Business designations are signs used in the course of trade as a name, company name or special designation of a business operation or an enterprise"

| 25 Hogan Lovells

• Background






Agenda


Hogan Lovells | 26

• Forfeiture is a special case of an undue exercise of legal rights and eliminates the claim

– Sec. 242 German Civil Code

• It requires long-lasting inactivity despite knowledge of the violation and further circumstances that the violator could act on the assumption of acquiescence

• Previously the forfeiture of unfair competition claims were excluded due to the fact that not only the competitor but also the consumer is protected

Forfeiture of unfair competition claims

Are consumer interests preventing unfair competition claims regarding misleading from forfeiture?

Hogan Lovells | 27

• Now the Federal Supreme Court – as stated in the Hard Rock Cafe decision – considers the forfeiture of unfair competition claims possible at least in cases of misleading of commercial origin

• This change is necessary after the abandonment of the precedence of trademark law

• Otherwise the parallel applications of trademark law and unfair competition law would result in inconsistencies



Hogan Lovells | 28

• But in forfeiture cases there is a differentiation between a continuous violation and repeating similar infringements

• In cases of repeated similar infringements the claimant has a new claim for each new case

• The Federal Supreme Court (BGH) decided in the Hard Rock Cafe case that the sales of misleading products (e.g. merchandise items) are repeated similar infringements

• This means that de facto there is no forfeiture possible in merchandise cases.



| 29 Hogan Lovells

• Background






Agenda

The Hard Rock Café case in Germany

Hogan Lovells | 30

• No.13 Annex UCP Directive declares the deliberate misleading of consumer into believing that a product is made by a particular manufacturer when it is not as always prohibited

• To fulfil the requirement of deliberately misleading it doesn't have to be the intent of the promoter the Federal Supreme Court (BGH) decided

• It is sufficient that the promoter considers the misleading possible and acts anyway (so-called conditional intent)

Blacklist no. 13 Annex UCP Directive

No. 13 Annex UCP Directive

Always prohibited is the promoting of a product similar to a product made by a particular manufacturer in such a manner as deliberately to mislead the consumer into believing that the product is made by that same manufacturer when it is not.

Hogan Lovells | 31

• The intention to mislead doesn't have to be existing at the beginning of the promotion but it can evolve if the circumstances change

– At least since the market entry of Hard Rock Cafe Group in Germany in 1992

• The priority of the trademarks are of no relevance due to the reason of protection

– The Hard Rock Cafe Group trademark is younger than the company name right of Hard Rock Cafe Heidelberg

Blacklist no. 13 Annex UCP Directive

No. 13 Annex UCP Directive

Always prohibited is the promoting of a product similar to a product made by a particular manufacturer in such a manner as deliberately to mislead the consumer into believing that the product is made by that same manufacturer when it is not.

| 32 Hogan Lovells

• Background






Agenda


| 33 Hogan Lovells

• Trademark owner can base their claims in classic trademark disputes on unfair competition law as well

• Trademark limitations can restrict unfair competition claims in specific cases

• Pay attention how trade associations and consumer groups will use their right to sue in misleading cases


Take away points

| 34 Hogan Lovells

• The use of a company name and the distribution of corresponding merchandise items can be misleading,

• This can be true even if

– no relevant older trademark exists

– the defendant can even rely on an earlier company name right

– and even if the owner of the younger, but well-known trademark tolerated the use for a long time

Company names as defence

Take away points

| 35 Hogan Lovells

• The Federal Supreme Court opens the possibility of forfeiture for unfair competition claims

• But there is de facto no forfeiture of unfair competition claims concerning merchandise items, because every sale results in a new claim


Take away points

| 36 Hogan Lovells

• Use no.13 Annex UCP Directive besides the primary product protection under competition law (sec. 4 AAUC) and the misleading commercial practices clause (sec. 5 AAUC) to defend yourselves against plagiarising

• Use no.13 Annex UCP Directive to take legal action against the owner of an earlier business designation, if your trademark is better known (no priority necessary)

• No. 13 Annex UCP Directive requires only conditional intent, which doesn't have to be existing at the beginning of the promotion

No.13 Annex UCP Directive

Take away points

Hogan Lovells | 37

Thank you very much

for your attention!

T

Hogan Lovells | 38

@HoganLovellsIP

Social Media

Second State Exam in Law, Hamburg, 2002 Dr. iur., University of Göttingen, 2000 First State Exam in Law, University of Göttingen, 1998

Education

False Advertising and Unfair Competition Trademarks and Brands IP Litigation Internet and E-Commerce

Areas of Focus

[email protected]

+49 40 419 93 0

Well-versed in IP litigation, Morten Petersenn advises in the field of trademarks,

designs, copyrights and false advertisement claims. Clients often ask Morten questions

like 'how do we best stop the infringement?', 'how fast can we get a court order to stop

the infringement', 'can we obtain a preliminary injunction?', 'is it possible to obtain a

court order with EU-wide scope?', 'shall we send a cease and desist letter?, 'or 'can we

obtain damages?'. However Morten does not only litigate for claimant parties. He also

handles defense cases. Clients who are attacked by a competitor would typically need

advice on questions like 'can we file a protective brief with the court?' or 'can we file a

counter-claim?' For his clients, Morten is both a counsel and a litigator in court.

Morten's key area lies in the field of the internet. He often advises in conflicts related to

online shops or online marketing, such as domain name conflicts, fake websites, non-

compliance of websites or mobile advertisement with regulatory rules.

Partner, Hamburg

Dr. Morten Petersenn

Dr. Morten Petersenn, Hamburg

Enforcement of non-existing trade marks


Discussion

Documents

The Hard Rock Cafe case in Germany - · PDF fileDr. Morten Petersenn, Hamburg Enforcement of non-existing trade marks The Hard Rock Cafe case in Germany