Ongoing Challenges for Trend Manufacturers in Germany – Authorized Points with Type Names Revisited

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Ongoing Challenges for Fashion Brands in Germany – Legal Issues with Style Names Revisited

The use of first names as style names to help consumers differentiate between certain items, styles or washes within a collection is widespread in the fashion industry. Compared to numeric identifiers, names can trigger emotions and are much easier to remember. Style names can be used in a variety of ways, including: B. on labels that are sewn into clothing, hang tags and boxes, or in advertising materials such as catalogs and offers on the Internet. What many companies fail to realize is that there are legal risks involved in using style names. Many names are already registered as trademarks, which can lead to trademark conflicts.

Germany has become a popular place for disputes over style names in recent years. However, the actual competitors only make comparatively few claims. Rather, there are trademark owners who are trying to capitalize on the specifics of German civil litigation and trademark law by monitoring the market for potentially infringing style names in order to collect legal fees and damages. In many cases, such claimants threaten to sue other companies in the distribution chain, including retailers, for pressure on the fashion company to set up regardless of earnings.

In this blog post we would like to raise awareness of the legal problems in connection with style names in Germany and show you how best to deal with them.

Trademark infringement or mere model name?

According to European case law, the owner of a trademark can only object to the use of a sign identical to the trademark for goods identical to those for which the trademark is registered if such use may impair one of the functions of the trademark, in particular its essential function of guaranteeing the origin of goods to consumers.

Whether a style name is perceived by consumers in a way that allows them to distinguish that product from a product of another origin, rather than being used as a reference to differentiate between a fashion company’s own styles, can lead to considerable debate. In fact, many style names have become well-known brands over time – like Gucci’s “Jackie” or Mulberry’s “Alexa”. Accordingly, the jurisprudence of the German lower courts as to whether the use of a sign as a style name constitutes a trademark infringing use was not uniform. Since German law allows forum shopping, trademark owners would usually ask for support from the courts in Hamburg and Frankfurt, which regularly assume that style names are understood by the relevant public as an indication of origin and thus as (secondary) trademarks.

In particular, cease and desist statements are often sent by companies that do not manufacture or supply clothing or accessories, or at least are not known for them, but instead hold trademarks and assert their rights to collect legal fees and damages. Such rights holders usually do not let a party “off the hook” unless they make a formal cease and desist clause (with a contractual penalty clause, as is customary under German law) and make a payment to settle the case amicably. To add to the pressure, these claimants threaten to disrupt the fashion company’s distribution system by sending warning letters and / or suing commercial customers.

Guidelines of the Federal Court of Justice

With at least a few courts’ extremely rights-holder-friendly approach, such cases were difficult to defend until recently. However, the defense prospects have improved thanks to the rulings of the Federal Supreme Court in the “SAM” case.[1] and “MO”[2].

In these decisions, the Federal Court of Justice made it clear that the use of a distinctive and non-descriptive sign as a style name does not in itself permit the conclusion that the sign is being used as a trademark. The fact that the style name is perceived as an indication of origin must be determined positively every time. On this basis, we have established some general guidelines for assessing whether a style name is used as a trademark on a case-by-case basis:

  • First names that are used by several manufacturers as style names or particularly common first names – As can be seen from previous case law of the Court of Justice[3]Such names can be understood by the public as mere model names. However, it could not be concluded from this that less common first names are always understood as an indication of origin.
  • Attached directly to the product – The public usually sees an indication of origin when a label is attached directly to the product, e.g. B. on a label that is sewn into the inside of the waistband, or on a leather piece that is attached to the outside of the waistband.
  • Use on hangtags – The printing of a style name on hangtags attached to the garment could also be understood as an indication of origin under the given circumstances.
  • Use in sales offers, e.g. in catalogs or on the Internet – When the mark is used in an offer to sell, e.g. B. in a catalog or on the Internet, the entire range and character of the mark must be taken into account. If the style name can be assumed to be known, there is a strong case for using it as a trademark regardless of the circumstances. Even if the style name is not known, use as a trademark can be assumed, especially if the style name is used in direct connection with the manufacturer or umbrella brand. In addition, a noticeable focus speaks in favor of using it as a brand.

Remarks

As always, the devil is in the details. While it is relatively clear that the use of a style name on the product can often be adopted as a trademark use, these are recent decisions by the courts[4] illustrate that advertising must take into account every single detail of the offer. This includes the overall layout of the offer and the relationship between the registration suit and the manufacturer or umbrella brand, as well as other item names such as price, size, product description and delivery modalities. However, the guidelines drawn up by the Federal Court of Justice open up considerable room for maneuver.

In terms of preventive measures, for fashion companies using hundreds or even thousands of style names, global branding isn’t always an option given the significant cost. Once it turns out that a style name can become important to the company, it’s worth protecting it with trademark registrations. Additionally, following a few simple rules when using style names based on the guidelines of the Federal Court of Justice can greatly reduce the risk of objection.

[1] BGH, judgment of March 7, 2019, case I ZR 195/17 – SAM.

[2] BGH, judgment of April 11, 2019, case I ZR 108/18 – MO.

[3] See BGH, judgment of December 19, 1960, case I ZR 39/59 – Tosca; BGH, judgment of March 20, 1970, case I ZR 7/69 – Felina-Britta; BGH, judgment of November 26, 1987, case I ZR 123/85 – Gaby.

[4] See for example the Frankfurt Court of Appeal, judgment of August 13, 2020, case 6 U 94/17 – MO; Frankfurt Court of Appeal, judgment of October 1, 2019, case 6 U 111/16 – SAM; Hamburg Court of Appeal, judgment of November 28, 2019, case 5 U 65/18 – Rock Isha; Hamburg Court of Appeal, judgment of December 19, 2019, case 3 U 191/18 – MYMMO MINI.

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