Trade Mark Litigation

Germany

Hengeler Mueller Wolfgang Kellenter

1. Sources of Law

1.1 What are the principal sources of law and regulation relating to trademarks and trademark litigation? (Briefly describe the role of international, federal or state laws and relevance of court decisions, list and briefly describe relevant statutes and international treaties).

(a) National
The German Trade Mark Act (GTA) contains the requirements for trade mark protection of a national German trade mark, the legal framework for opposition and nullity proceedings as well as for determining trade mark infringement. Further details, particularly of application procedure and opposition proceedings, are set out in the German Trade Mark Regulations (MarkenV). The national German trade mark is registered with the German Patent and Trade Mark Office (DPMA).

(b) European Community law
The following Community Law is particularly relevant:

First Council Directive 89/104/EEC to approximate the laws of the Member States relating to Trade Marks;
Council Regulation 94/40/EC on the Community Trade Mark;
Directive 2004/48/EC on the Enforcement of Intellectual Property Rights;
Council Regulation 2001/44/EC on Jurisdiction and Recognition and Enforcement of Judgments in Civil and Commercial Matters;
Council Regulation 2003/1383/EC concerning Customs Action against Goods suspected of infringing certain Intellectual Property Rights and the Measures to be taken against Goods found to have infringed such Rights; and
Council Regulation 94/3295/EC laying down Measures to Prohibit the Release for Free Circulation, Export, Re-export or Entry for a suspensive Procedure of Counterfeit and Pirated Goods.

Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS);
Paris Convention for the Protection of Industrial Property, which inter alia contains important provisions on priority;
Madrid Agreement concerning the International Registration of Marks;
Protocol relating to the Madrid Agreement Concerning the International Registration of Marks; and
Nice Agreement Concerning the International Classification of Goods and Services for the Purposes of the Registration of Marks.

(d) Community trade mark (CTM)
The CTM is registered with the Office for Harmonization in the Internal Market (OHIM) in Alicante, Spain, in accordance with the conditions specified in the Council Regulation 94/40/EC on the Community Trade Mark.
(e) International registered mark (IR-Trade Mark)
The system of international registration of marks is governed by the Madrid Agreement Concerning the International Registration of Marks and the Protocol relating to the Madrid Agreement Concerning the International Registration of Marks. The Madrid system provides a mechanism whereby the owner of a trade mark which has already been registered (or, where the international application is governed by the Protocol, if registration has been applied for) with the trade mark office of a contracting party to the Madrid Agreement and/or the Protocol may obtain an international registration from the World Intellectual Property Organisation (WIPO) in Geneva. An international registration is equivalent to a bundle of national registrations.

(f) Court decisions
German law does not recognise the concept of binding precedents. Nevertheless, the courts of lower instances in fact follow the decisions of the courts of the higher instances (in particular decisions of the Federal Supreme Court) in the interest of legal certainty.

1.2 What is the order of priority of the relevant sources, ie which take precedence in the event of a conflict?

Council Regulations of the European Community have immediate effect in Germany and prevail over any national German law. Community Directives need to be implemented into national law to have effect in Germany. However, even if the national implementation act has not yet been passed, the national law has to be interpreted in accordance with the Directive once the Directive is in force.
International treaties require national implementation acts to have effect in Germany. The implementation act must be interpreted in accordance with the underlying treaty.
On the national level, the GTA prevails against the German Trade Mark Regulations (MarkenV).

2. Court System

2.1 Can third parties oppose/request cancellation of a national or supranational (eg Madrid Agreement and Protocol, Community Trade Marks) trade mark application/registration in your country? If so, on what grounds? Please briefly describe the opposition/cancellation procedure(s).

A German national trade mark, an IR-Trade Mark as well as a CTM can be subject to opposition and cancellation proceedings. As to the national German trade mark and the IR-Trade Mark (as far as registered in Germany) the provisions of the GTA are applicable (see section 42 (opposition), section 49 (revocation), section 50 and section 51 (invalidity based on relative and absolute grounds, section 115 (IR-Trade Marks)). Any opposition and cancellation proceedings with regard to the CTM are governed by the Council Regulation 94/40/EC (see article 42 (opposition); article 50 (revocation) and article 51 and article 52 (invalidity based on relative and absolute grounds). In detail:

(a) Cancellation due to grounds for revocation
Any third party can request cancellation of the registration of a national German trade mark if it has not been seriously used within a continuous period of five years after the date of registration (section 49 GTA). The registration of a trade mark shall also be cancelled upon request if: (i) in consequence of the acts or inactivity of the proprietor, the trade mark has become the common name in the trade for the goods or services in respect of which it is registered; (ii) as a consequence of the use made of it by its proprietor or with his consent, the trade mark is liable to mislead the public; or (iii) the proprietor of the trade mark is no longer a natural person, a legal person or a partnership having capacity to acquire rights and incur liabilities.
An application to cancel a national German trade mark can be filed with the DPMA (section 53 GTA). Alternatively, it is possible to file a cancellation action with the competent court (section 55 GTA).
With regard to CTMs, the Council Regulation 94/40/EC provides for the same grounds for revocation. However, the application for cancellation has to be filed with the OHIM. Furthermore, it is possible to demand the cancellation by way of a counterclaim in infringement proceedings.

(b) Cancellation due to absolute grounds for refusal
Any third party can request cancellation of the registration of a national German trade mark with the DPMA if: (i) it is a sign not capable of being protected as a trade mark; (ii) the proprietor is neither a natural person, a legal person, nor a partnership having capacity to acquire rights and incur liabilities; or (iii) there exist absolute grounds for refusal, eg the lack of distinctiveness, the common interest to freely use the trade mark or if the trade mark consists of a sign that has become customary.
As to the CTM, the Council Regulation 94/40/EC basically provides for the same absolute grounds for refusal. The application for cancellation of a CTM has to be filed with the OHIM or by way of a counterclaim in infringement proceedings.

(c) Cancellation due to relative grounds for refusal
As to opposition proceedings there are considerable differences between national German trade marks/IR-Trade Marks and CTMs.
Within a period of three months following the date of publication of the registration of a national German trade mark, the proprietor of an earlier registered or applied trade mark (a national German Trade Mark, a CTM, an IR-Trade Mark enjoying protection in Germany) may file an opposition with the DPMA. The opposition is successful if the trade mark has to be cancelled due to: (i) an identical or confusingly similar earlier applied or registered trade mark; (ii) an earlier identical or confusingly similar notoriously known trade mark; or (iii) if the trade mark has been registered for an agent or representative of the proprietor without his consent (section 42 GTA).
An opposition against a CTM application may be based on an earlier: (i) registered national trade mark protected in a member state of the European Community; (ii) IR-Trade Mark which has effect in at least one member state of the European Community or the European Community as such; (iii) CTM; or (iv) trade mark which is ‘well known’ in the sense of article 6bis of the Paris Convention in at least one member state of the European Community (article 8(2)). The grounds for opposition are basically the same as the grounds for opposition under the GTA.
Furthermore, an opposition against a CTM may also be based on a registered trade mark with reputation, provided: (i) the opponent is the owner of an earlier registered mark within the meaning of article 8(2) which has reputation in the relevant territory; (ii) there is identity or similarity between the contested CTM application and the earlier mark; (iii) the use of the sign applied for must be capable of taking an unfair advantage of, or being detrimental to the distinctiveness or the repute of the earlier mark; and (iv) such a use must be without due cause (article 8(5)).
In addition, the Council Regulation 94/30/EC allows the opponent to base an opposition on an earlier non-registered trade mark or another sign used in the course of trade, provided that pursuant to the Community legislation or the applicable law of the member state that trade mark or sign confers on its owner the right to prohibit the use of a subsequent trade mark (article 8(4)).
The three month period for filing the opposition starts to run following the date of publication of the application for the CTM.
After a German national trade mark has been registered, the proprietor of an earlier registered or unregistered trade mark can bring an action for invalidity with the competent court. The above described grounds for opposition are also applicable for this action (section 51 GTA). In addition, the GTA provides that an action for invalidity due to relative grounds can also be filed, if the goods and services for which the conflicting trade marks claim protection are dissimilar, provided: (i) the claimant is the owner of an earlier registered or applied for trade mark with reputation in Germany; (ii) there is identity or similarity between the contested registration and the earlier trade mark; (iii) the use of the contested registration must be capable of taking an unfair advantage of, or being detrimental to the distinctiveness or the repute of the earlier trade mark; and (iv) such a use must be without due cause (sections 51, 9(1) no 3 GTA which apply in analogy if the goods and services are identical or similar, see Davidoff decision [ECJ C-292/00]).
The Council Regulation 94/40/EC provides for basically corresponding relative grounds for refusal (article 52). It provides for an application for invalidity with the OHIM and for a counterclaim for cancellation as a defence in infringement proceedings pending with a Community trade mark court.

2.2 In which courts are trade marks enforced? Are they specialised trade marks courts? If not, what level of expertise can a trade mark holder expect from the courts?

There are 18 district courts having jurisdiction to hear national and CTM infringement cases in the first instance: Stuttgart, Mannheim, Munich, Nuremberg/Fürth, Berlin, Bremen, Hamburg, Frankfurt/Main, Rostock, Braunschweig, Düsseldorf, Koblenz, Frankenthal, Saarbrücken, Leipzig, Magdeburg, Kiel and Erfurt. In addition, three more district courts can exclusively hear national trade mark infringement cases in the first instance: Cologne, Bielefeld and Bochum. These courts have specialised chambers for trade mark matters.

2.3 To what extent are courts willing to consider, or are bound by, the opinions of other national or foreign courts that have handed down decisions in similar cases?

German law does not recognise the concept of binding precedence. However, the courts of the lower instances in practice usually follow the decisions of the courts of higher instances (in particular decision of the German Federal Supreme Court).
Furthermore, the ECJ decides on the interpretation of Community law in a binding manner. As the GTA implements to a great extent the First Council Directive 89/104/EC the German courts have to comply with the decisions of the ECJ regarding the interpretation of the provisions of the GTA. The same applies if a German Court has to decide on a case regarding the CTM according to the Council Regulation 94/40/EC.

2.4 Do the courts deal with infringement and invalidity simultaneously? Or must invalidity actions be brought in separate proceedings? If so, before which court or national or supranational government agency shall they be brought (eg the national Trade Mark office or the OHIM in Alicante)?

The judge deciding on the infringement of a national German trade mark is bound by its registration. Infringement and invalidity proceedings due to absolute grounds for refusal are separate proceedings. The defendant can only apply for a stay of the infringement proceedings until separately initiated invalidity proceedings have been finally decided by the DPMA. In contrast, the above described grounds for revocation can be raised as defence in infringement proceedings or by way of a counterclaim. The same applies for the above described relative grounds for refusal.
The Council Regulation 94/40/EC also provides that the Community trade mark court deciding on the infringement of a CTM is generally bound by its registration. However, the defendant of the infringement proceedings can file a counterclaim based on invalidity of the CTM due to grounds for revocation or absolute or relative grounds of refusal (article 96).

2.5 Who can represent parties before the courts handling trade mark litigation and/or the national or supranational government agency dealing with trade mark validity issues?

In trade mark infringement proceedings and invalidity proceedings that are pending before a district court, each party must be represented by an attorney-at-law (Rechtsanwalt). In opposition or cancellation proceedings before the DPMA, the Federal German Patent Court (BPatG) or the OHIM, parties domiciled in Germany do not need to be represented by an attorney-at-law whereas the proprietor of a German national trade mark having neither a domicile, a seat nor an establishment in Germany needs to be represented by a German attorney-at-law or a patent attorney.

2.6 What is the language of the proceedings? Is there a choice of language?

All infringement or cancellation proceedings before a German court and the DPMA are held in the German language. The parties cannot agree on a different language.

3. Substantive Law

3.1 To what extent are unregistered trade marks protected under your country’s laws?

A sign may receive protection as an unregistered trade mark if it has acquired secondary meaning through its use among the relevant trade circles (section 4 no 2 GTA). Generally, unregistered trade marks enjoy the same protection as registered trade marks, in particular with regard to the remedies available in case of trade mark infringement. Unlike the registered trade mark, the unregistered trade mark is not necessarily protected in the whole territory of Germany. If the unregistered trade mark has only acquired secondary meaning in a certain region, the protection is limited to such region.
Apart from unregistered trade marks that have acquired secondary meaning, the GTA also protects trade marks which are notoriously-known in the sense of article 6bis of the Paris Convention.

3.2 How is trade mark infringement assessed? Does protection extend to translations or to conceptually identical but graphically different trade marks?

A trade mark is infringed if a third party uses in the course of trade and without the consent of the proprietor:

any sign which is identical to the trade mark in relation to goods or services which are identical to those for which the trade mark is protected (section 14(2) no 1 GTA); or
any sign where, because of its identity with or similarity to the trade mark and the identity or similarity of goods or services covered by the trade mark and the sign, there exists a likelihood of confusion on the part of the public; the likelihood of confusion includes the likelihood of association between the sign and the trade mark (section 14(2) no 2 GTA); or
any sign which is identical with or similar to the trade mark in relation to goods or services which are not similar to those for which the trade mark is registered, where the latter has a reputation in Germany and where the 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 (section 14(2) no 3 GTA).

According to consistent court practice in Germany, trade mark protection requires that the other sign is used as trade mark, ie as designation of the origin of certain goods and services from a certain undertaking.
(a) Identical marks/identical goods or services
Two signs are identical, if there is an exact match in terms of image, sound or meaning. The goods and services are identical if the other sign is registered and respectively used for the same type of goods and services as the conflicting trade mark.
In case of identity between the conflicting signs and between the goods, and services, trade mark infringement is given without the need to state a likelihood of confusion.

(b) Likelihood of confusion
The likelihood of confusion must be assessed globally, taking into account all factors relevant to the case, in particular the degree of distinctiveness of the earlier trade mark, the identity or degree of similarity of the goods and services covered, the identity or degree of similarity of the conflicting signs as well as the nature of those goods or services, and the normal circumstances of the trade. That global assessment implies an interdependence between all relevant factors, meaning, for example, that a lesser degree of similarity between the goods or services may be offset by a greater degree of similarity between the signs and/or the degree of distinctiveness of the earlier trade mark and vice versa.
The degree of distinctiveness of a trade mark depends on the trade mark’s capacity to be recognised by the public as a designation of the origin of the goods and services from a certain undertaking.
When determining whether goods or services are similar, all factors that designate the relationship between the goods and services have to be taken into account. This comprises the type of goods and services, their purpose, their use as well as their ability to compete with each other or to complement one another. It also has to be considered whether the goods or services regularly are manufactured or rendered by the same undertakings or under their control or whether there are points of contact at their distribution.
The degree of similarity between the signs with regard to their image, sound or meaning depends on their overall impression. The similarity in one of these factors can be sufficient to assume a similarity of the signs. With regard to the overall impression of composite signs the German Federal Supreme Court has developed the so-called ‘Prägetheorie’ (theory of the impression conveyed) in order to appreciate the similarity in cases where at least one of the conflicting signs consists of more than one element. The Prägetheorie calls the court to consider the overall impression conveyed by each of the two conflicting signs and to ascertain whether the shared component characterises the composite mark to the extent that the other components are largely secondary to the overall impression. Based on this theory, there might be a likelihood of confusion if the dominating element is the common element in both of the signs. In case of a combined word/design trade mark the word element is often the dominating element which thus determines the overall impression. However, according to the decision Thomson Life [ECJ C-120/04], a likelihood of confusion may also exist where the contested composite mark (THOMSON LIFE) consist of an earlier mark and a company name and the earlier mark (LIFE) is not found to dominate the overall impression of the composite mark.

(c) Infringement of a trade mark with reputation
Section 14(2) no 3 GTA concerns the infringement of trade marks with reputation. The GTA does not contain a definition of ‘reputation’ of the trade mark. According to the ECJ, reputation is a knowledge threshold requirement, implying that it must be principally assessed on the basis of quantitative criteria. Thereby the degree of knowledge required must be considered to be reached when the earlier trade mark is known by a ‘significant’ part of the public. The ECJ has so far refrained from defining in more detail the meaning of the term ‘significant’ and stated that the trade mark does not have to be known by a given percentage of the public. Hence, account must be taken not only of the degree of awareness of the mark, but also of any other factors relevant to the specific case, in particular the relevant public, the goods and services covered, the market share of such products or services, the intensity of the trade mark’s use, the geographical scope, the time and duration of its use, nature and size of promotional activities as well as the extent to which the mark is exploited through licensing, merchandising and sponsoring.
The degree of recognition of the mark can nevertheless be particularly helpful. As a rule, the higher the percentage of trade mark awareness, the easier it will be to accept that the mark has a reputation.

(d) Protection of translation and conceptually identical but graphically different trade marks
The protection of a trade mark may extend to its translation based on a likelihood of confusion with regard to the meaning. The Federal Patent Court of Germany (BPatG) assumed a likelihood of confusion between ‘Spring Garden’ and the German translation ‘Frühlingsgarten’.
The protection of a design trade mark against a conceptually identical but graphically different sign depends on the existence of a likelihood of confusion due to a similarity with regard to the meaning. The ECJ ruled in its decision Sabél/Puma [ECJ C-251/95] that only a trade mark with a high degree of distinctiveness is protected against other signs with similar meanings. The pure association between two signs due to a certain similarity of their meanings is not sufficient to assume a likelihood of confusion. Cases in which a court assumed a likelihood of confusion are rare.

3.3 Are there other causes of action for trade marks (eg dilution)?

The most important cause of action for trade marks is the action for infringement. Furthermore, the actions described under question 2.1 are of relevance. The GTA does not recognise a specific action due to dilution. Provided the trade mark has reputation, dilution can be considered as a case of trade mark infringement (section 14(2) no 3 GTA).

3.4 Can a trade mark be enforced against a domain name, a trade name, a pseudonym or other distinctive signs?

(a) Domain Name
The owner of an older trade mark can enforce its rights against a domain name provided that the owner of the domain name does not have a prevailing right to use such name, in particular a name right. If with respect to domain names several persons, even one of them being the owner of an earlier trade mark, have the right to use a certain name the principle of ‘first come, first served’ applies. However, if one of the rights concerns a famous sign or name, the owner of the other right has to respect this right and may only register and use his name as a domain name with a distinguishing addendum.
As trade mark infringement requires that the other sign is used in commerce as a trade mark for identical or similar goods and services, the GTA does not protect a trade mark against a conflicting domain name which is only registered but not yet in commercial use.

(b) Trade name
The owner of an earlier trade mark can also proceed against the use of an identical or similar sign as a trade name. A claim for trade mark infringement requires that the contested sign is used to designate the origin of goods and services. The Federal Supreme Court has held that a trade name often not only designates the undertaking itself but indirectly also its goods and services. Therefore, such use can infringe upon an earlier trade mark.

(c) Pseudonym
A trade mark can be enforced against a pseudonym provided that the pseudonym is used in commerce and not only for private purposes and designates the origin of certain goods and services.
(d) Other distinctive signs
The protection of a trade mark against the use of other distinctive signs depends in particular on the sort of the distinctive sign.
In most cases the use of an identical or similar sign as a title for a work does not constitute trade mark infringement as the circles of trade concerned normally do not comprehend the title for the work as a designation of the origin of certain goods and services from a certain undertaking. With regard to the use of another sign as a geographical designation of origin, the enforcement of the trade mark is possible provided that the other party does not have a right to use the other sign in order to describe the geographic origin of certain products.

3.5 On what grounds can a trade mark be invalidated?

A registered trade mark can be cancelled where absolute or relative grounds for refusal or grounds for revocation exist.
Furthermore, the DPMA will cancel the trade mark if the renewal fees are not paid when due or where the trade mark owner waives its trade mark rights.

3.6 Must use requirements be satisfied to maintain the trade mark registration? If so, is there any definition of what constitutes use?

The GTA requires that the trade mark owner seriously and continuously uses the trade mark as a designation for the registered goods and services in Germany, unless there is a legitimate reason for non-use. However, during a five-year period after the registration of the trade mark use is not required.
If the trade mark owner, (except within the five-year non-use period), does not use the trade mark he cannot enforce it against third parties. Furthermore, a trade mark that is not used can be revoked upon application.
A trade mark is considered to be seriously used if it is used according to its main function, which is to designate the origin of certain goods and services from a certain undertaking. Evidence of serious use may be the amount of products or services offered or sold under the trade mark. In principle, the trade mark has to be used in its registered form, but to a certain limited extent variations are tolerable.

3.7 What other defences, if any, are available to an alleged infringer? Does your country’s law provide for prior user rights?

The most important defences are:

(a) Denial of infringement
The alleged infringer can deny the requirements of trade mark infringement.

(b) Prior distinctive signs
The alleged infringer can argue that he is the owner of an older right that he can enforce against the use of the trade mark, in particular a name right, a copyright or a similar intellectual property right (section 13 GTA). The older right can also result from an unregistered trade mark with secondary meaning. Furthermore, the Federal Supreme Court allows the alleged infringer to base its defence on an older right of a third party which can be enforced against the use of the trade mark provided that the third party has allowed the alleged infringer to use the right.

(c) Non-use of the trade mark
The alleged infringer can, except within the five-year non-use period, raise the defence that the trade mark is not used seriously (section 25 GTA).

(d) Reasonable interest of free use of a specific sign
The proprietor of a trade mark cannot prohibit the alleged infringer from using his own name or address or descriptive indications concerning characteristics of the goods and services like kind, quality, quantity, intended purpose, value, geographical origin and time of production (section 23 GTA). It is allowed to use a trade mark where such use is necessary to indicate the intended purpose of a product or service, in particular as accessories or spare parts. However, the alleged infringer has to use the trade mark in accordance with honest practices in industrial or commercial matters.

(e) Exhaustion
This defence is available to the alleged infringer if the owner of the trade mark or a third party with his consent has used the trade mark in relation to particular goods put on the market in Germany, in another member state of the European Union or in any other state of the Convention concerning the European Economic Area (EEA) (section 24 GTA). Exhaustion is not given if there exist legitimate reasons for the trade mark owner to oppose to the further commercialisation of the marketed goods, especially where the condition of the goods has changed or become impaired.

(f) Limitation of actions
Claims for trade mark infringement become time-barred after three years. The three-year period begins at the end of the year in which the claim has arisen and the trade mark owner has obtained knowledge of the infringement or grossly negligently failed to gain such knowledge. Irrespective of his knowledge/grossly negligently failure to obtain knowledge, claims are time-barred ten years from the time the claim has arisen (section 20 GTA).

(g) Forfeiture
If the trade mark owner asserts his claim for trade mark infringement against the infringing use of a younger registered trade mark the alleged infringer might raise the defence of forfeiture. This defence will be successful if the trade mark owner being aware of the younger registered trade mark has tolerated its use for the goods and services for which it is registered during a continuous period of five years, provided that the younger trade mark was not applied for in bad faith (section 21 GTA).

(h) Abuse of legal rights
The alleged infringer can raise the defence that the trade mark owner abused his legal rights, eg, applied for the trade mark in bad faith. Bad faith is assumed, inter alia, if the alleged infringer owns a vested right with regard to a certain sign, and the trade mark owner in knowledge of this vested right without justified reason applies for the trade mark in order to prevent the alleged infringer from using his vested right.

3.8 To what extent can enforcement of a trade mark expose the trade mark holder to liability for an antitrust violation?

Neither the GTA nor the German law against restraints of competition contain explicit rules concerning antitrust limits for the enforcement of a trade mark. Generally, the trade mark holder is considered to have a legitimate and prevailing interest to enforce his trade mark. Unless exceptional circumstances exist, the enforcement as such does not violate antitrust laws.

3.9 Can a court only partially invalidate a trade mark?

A court can partially invalidate a trade mark if a ground for invalidation exists only in respect of some of the goods or services for which a trade mark has been registered.

3.10 Is it possible to amend a registered trade mark during a lawsuit?

The applicant of a national German trade mark has to clearly designate the sign for which he seeks trade mark protection. After the application any modifications of the trade mark itself are not admissible. However, the applicant can limit the goods and services for which the trade mark is protected at any time. Any ex-post addition of goods or services is not admissible.

3.11 Are there any grounds on which an otherwise valid trade mark can be deemed unenforceable, owing to misconduct by the trade mark holder, or for some other reason (eg expiry of time limit)?

A trade mark can be deemed unenforceable, in particular in the following cases:

non-use of the trade mark;
prior distinctive sign of the alleged infringer;
reasonable interest of free use of a specific sign;
exhaustion;
limitation of action;
forfeiture; or
abuse of legal rights.

3.12 Can a trade mark holder bring a lawsuit claiming both trade mark infringement and unfair competition for the same set of facts? Is it possible to bring parallel unfair competition proceedings, whether or not the trade mark is registered?

Claims for unfair competition are secondary to those for trade mark infringement. If the use of a sign does not constitute a trade mark infringement under the GTA, the trade mark owner cannot base a claim on unfair competition law, unless he can state other facts than the use of the contested sign that reveal an additional unfair behaviour.

4. Parties to Litigation

4.1 Who can sue for trade mark infringement (trade mark holder, exclusive licensee, non-exclusive licensee, distributor)? Does a licensee need to be registered to sue?

Pursuant to the GTA, only the trade mark owner has the right to sue for trade mark infringement. Exclusive or non-exclusive licensees, distributors etc are not entitled to sue for trade mark infringement unless:
(i) the trade mark holder has empowered them to sue (eg in the licence agreement); and
(ii) it is in their own economic interest to sue for a trade mark infringement.
The latter will be given in most cases. The registration of the licence is not a requirement for the licensee to be able to initiate trade mark infringement proceedings.
However, the exclusive licensee of a CTM may sue for infringement of the CTM if the licensor upon the licensee’s request within a reasonable period of time has not initiated infringement proceedings (art 22). Holders of a non-exclusive license need to be empowered by the CTM owner.

4.2 Under what conditions, if any, can an alleged infringer bring a law suit to obtain a declaratory judgment of non-infringement?

The alleged infringer must show a ‘legitimate’ interest in obtaining a declaratory judgment of non-infringement. He will usually have such interest if he has received a cease and desist letter or the trade mark holder has otherwise asserted claims for trade mark infringement against him. It is not sufficient, however, that the potential infringer simply fears that the trade mark holder might bring such claims in future.

4.3 Who can be sued for trade mark infringement? Can the company directors be sued personally? Under what conditions, if any, can anyone be sued for inducing or contributing to trade mark infringement by anyone else?

Anyone can be sued who commits acts of infringement himself. Further, anyone who aids or abets trade mark infringement can be sued as well. Moreover, any ‘disturber’ can be sued. A ‘disturber’ is anyone who would have had the opportunity to prevent the trade mark infringement and who is expected to do so because of his position and authority.
The directors of a company are liable as well. If there is more than one director, only the director in whose area of responsibility the infringement occurred is liable. Any director is liable once he has been informed about the alleged infringement and does not take immediate measures to stop it. The company itself is liable for any acts committed by its directors and/or its employees in the course of service to the company.

4.4 Is it possible to add or subtract parties during litigation?

A change in the parties to trade mark infringement litigation may occur due to operation of law or due to applications by the parties.
A change in a party due to operation of law occurs, for example, in the case of the death of one of the parties. The heirs become party to the proceedings.
With respect to a possible change of the defendants due to an application by the plaintiff, the following applies: Prior to an oral hearing, the plaintiff is free to withdraw an action against any defendant. After the start of the oral hearing, the removal of a defendant requires the defendant’s consent.
Adding new defendants is permissible if either:

the new defendant consents; or
it is expedient with respect to case management.

Removal of a plaintiff from the proceedings does not require the defendant’s consent until the start of the oral hearing. Thereafter, the defendant’s consent is necessary. A plaintiff may be added if either the defendant consents or it is expedient with respect to case management.

5. Enforcement Options

5.1 What options are open to a trade mark holder when seeking to enforce its rights in your country?

Out of court, the trade mark holder can send a cease and desist letter demanding that the infringer renders a written cease and desist undertaking that includes the obligation to pay a contractual fine in any case of future violation of the declaration.
It is not required to send a cease and desist letter before a court action. However, if the trade mark holder takes court action immediately, he runs the risk that he will have to bear the costs of the court proceedings, if the infringer immediately acknowledges the claims for trade mark infringement once the court action is filed.
In court, the trade mark holder can enforce its rights by means of a preliminary injunction or by a main action.

5.2 Are criminal proceedings available? If so, what are the sanctions?

Infringing a German national trade mark, an IR-Trade Mark registered for Germany or a CTM intentionally is a criminal offence under German law (sections 143, 143a, 112 and 124 GTA). Punishment is either a fine or imprisonment up to three years. If the infringer acted ‘commercially’, punishment is either a fine or imprisonment up to five years.
Unless the infringer acted ‘commercially’, punishment and criminal investigations require a criminal complaint by the trade mark holder.

5.3 Are border measures available?

There are two kinds of procedures for customs monitoring and seizures available for a trade mark holder. Pursuant to Regulation 1383/2003/EC (‘Anti-Piracy-Regulation’) the trade mark holder can apply for customs monitoring and seizures with respect to goods imported from or exported to countries that are not member states of the European Communities or the EEA. Under national German law, the trade mark holder can apply for customs monitoring and seizures of goods imported from or exported to member states of the European Communities or the EEA. In practice, proceedings pursuant to the Regulation 1383/2003/EC are by far more common than the national proceedings as cross-border trade within the European Community or the EEA is generally no longer subject to customs control.

5.4 To what extent are courts willing to grant cross-border or extra-territorial injunctions?

A national trade mark is enforceable only within the territory of the country where it is registered. Accordingly, whether a national trade mark is infringed or not will thus always be judged on the basis of that national law.
It is a different question, whether German courts have jurisdiction for infringement of foreign national trade marks, thereby applying foreign law. In such cases of cross-border infringement within the European Community, jurisdiction can be attributed to German courts based on the Council Regulation 44/2001/EC (formerly the Brussels Convention). The Regulation provides inter alia for an international jurisdiction of the place of domicile of the defendant and the place of tort. Provided German courts have international jurisdiction, they are entitled to grant injunctions, preliminary measures and to award damages to the plaintiff, also with regard to acts committed in other countries. This allows a person domiciled in Germany to be sued for infringement of eg, a French trade mark before a German court. The German court will apply the law of the country for which the trade mark has been granted to all questions relating to substantive law, including the definition of infringing acts and the law of damages. The court’s procedure will be governed by German law.
For their enforcement in other countries, judgments of German courts in principle do not need to go through a procedure of formal recognition provided the requirements of art 32 et seq Council Regulation 44/2001/EC are met, but they have to be declared enforceable by the court in whose district the judgment is to be enforced. However, according to ECJ case law, cross-border injunctions issued by the court of another member state can only be acknowledged subject to art 32 et seq Council Regulation 44/2001/EC, if they result from an adversarial proceeding. Hence, injunctions granted without a hearing (ex parte) cannot be acknowledged.
On the other hand, pursuant to art 33 no 4 of Regulation 44/2001/EC, an invalidity action against a national trade mark falls under the exclusive jurisdiction of the courts of the country in which the trade mark is registered. For example, German courts do not have jurisdiction over invalidity actions against French national trade marks. This also applies if the issue of invalidity is raised in infringement proceedings [see ECJ GAT/LUK C-04/03 on patents].

5.5 To what extent do courts recognise the blocking effect of ‘torpedo’ actions abroad?

In German trade mark law, ‘torpedo’ actions for a declaratory judgment of non-infringement are not regarded as a common defence strategy. During a patent litigation a ‘torpedo’ is attractive because of the limited time of patent protection. Thus, there is a particular inducement for infringers to delay a claim of infringement by using a ‘torpedo’ until the patent has expired or is economically worthless. These aspects are missing in trade mark law. Hence, ‘torpedo’ actions are not common in trade mark litigation and there are no published decisions of higher German courts on this matter. Nevertheless, in principle the rules established in patent litigation are also applicable and German courts would recognise the effect of a foreign action in line with art 27 Council Regulation 44/2001/EC.

5.6 To what extent are alternative dispute resolution (ADR) methods (such as arbitration or mediation) available to resolve trade mark disputes? How widespread are ADR methods in which sectors? If arbitration is available to assess invalidity, will your Trade Mark Office recognise and execute an arbitral award declaring a trade mark invalid?

ADR methods are very rarely used to solve a trade mark dispute in Germany. Firstly, ADR methods in general are not very widely used in Germany. Secondly, the costs of trade mark litigation in Germany are rather low compared to other jurisdiction and proceedings are swift.
Nevertheless, these proceedings are possible in trade mark infringement matters and an arbitral award in such cases does have the same effect as a court decision. Foreign arbitral awards are also recognised under the European Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York Convention 1958).
A registered trade mark can never be invalidated by arbitral award.

6. Procedure in Civil Courts

6.1 What is the format of trade mark infringement proceedings?

A typical trade mark infringement case has the following procedure:

The plaintiff files the complaint for trade mark infringement. The plaintiff must specify the relief sought and present the facts of the case. Moreover, while this is not a legal requirement, the plaintiff will usually set out the legal arguments.
The court will serve the complaint on the defendant.
After the complaint has been served, the court can fix a first short hearing where usually only case management issues (deadlines for filing of briefs etc) are discussed. Alternatively, the court can make case management orders in writing.
The defendant has to file a defence brief, including reasons why the claim must be dismissed, within a deadline specified by the court.
The plaintiff is usually given the opportunity to file a response to the defendant’s brief.
Depending on the individual case, the defendant then may have further opportunity to file another brief.
After the briefs have been exchanged, there is the oral hearing that does not serve to present and discuss the full case but only open questions and the main issues of the case. Oral hearings can be used to hear witnesses and/or experts, if the court has ordered that evidence shall be taken.
Usually within a few weeks after the hearing, the court will orally announce its decision. The written decision is then served on the parties a few weeks later.

6.2 Are disputed issues decided by a judge or a jury?

There is no jury in trade mark infringement cases. The decision is made by a chamber of the court, which consists of three professional judges. The chamber has the option to assign the case to one of its members. This is done only rarely in trade mark cases.

6.3 To what extent are documents, affidavits, witnesses and/or (court-appointed or private) experts used? Is it possible to cross-examine witnesses?

Written documents (including the registration certificate of the trade mark(s), pictures/samples of the attacked sign and/or of products bearing the contested sign) are the most important types of evidence. Witnesses are rarely used. Opinions of private experts are considered by the court. If the court comes to the conclusion that it needs the assistance of an expert, it will appoint an expert, however, in trade mark infringement proceedings this is rarely the case.
Cross-examination as practised in Anglo-American legal systems is not used in Germany. However, each party can ask questions to every witness.

6.4 To what extent is survey evidence used (eg to support acquired distinctiveness, likelihood of confusion)? What is its relevance in proceedings (eg party allegation, evidence)? Who decides which consumers are questioned in the survey (eg the court, court expert)? What level of cost should one expect to incur to carry out a survey? Are these costs recoverable from the losing party?

According to the ECJ, German courts should generally assess the distinctiveness of the trade mark or the likelihood of confusion upon their own competence. Only in difficult cases, particularly if the judge does not belong to the relevant public, should a survey be obtained.
In the case that survey evidence is ordered by the court, the expert decides which consumers are questioned and how the questioning is executed. The costs of a survey depend on the methods applied and can vary from €10,000 to more than €50,000. The costs of the survey are recoverable from the losing party.

6.5 Is evidence obtained for criminal proceedings admissible in civil proceedings, and vice versa?

In general, evidence obtained for criminal proceedings is admissible in civil proceedings, and vice versa. However, due to the different objectives of civil and criminal proceedings, it is possible that evidence which is regarded as illegally obtained under criminal procedural rules is considered to be admissible in civil proceedings, and vice versa. According to section 19(4) GTA, information provided in response to a trade mark holder’s right to be informed (Auskunftsanspruch) cannot be used in criminal proceedings without the consent of the person obliged to provide the information.

6.6 To what extent is pre-trial discovery permitted? If it is permitted, how is discovery conducted? If it is not permitted, what other, if any, mechanisms are available for obtaining evidence from an adverse party or from third parties?

It is a fundamental principle of German Civil Procedure Law that each party has to obtain the evidence it needs itself. Pre-trial discovery is not permitted under German law. However, under section 142 et seq German Civil Procedure Act, a court can order one of the parties or a third party to submit to the court documents or other materials to which one of the parties has referred. So far, the courts have handled this possibility of obtaining evidence restrictively. Nevertheless, the Federal Supreme Court held in a recent decision that section 142 German Civil Procedure Act should be considered and applied in intellectual property law.
Furthermore, pursuant to section 485 German Civil Procedure Act, the taking of expert evidence can be ordered by the court upon a party’s request even before the main proceedings start. Finally, according to section 809 German Civil Code, the plaintiff may be entitled to ask for an inspection of the alleged infringing product. As the right has to be enforced separately, it is not equivalent to pre-trial discovery.
The procedural rules regarding obtaining evidence in trade mark infringement proceedings are subject to Directive 2004/48/EC. According to art 7(1) of the Directive, the member states have to ensure that their courts even before the proceedings on the merits of the case start may order provisional measures to preserve relevant evidence. Such measures may include taking samples or even physical seizure of the infringing goods.
The implementation of the Directive is still subject to current legislation in Germany. A draft law has been published recently. The draft provides for a new section 19a of the GTA (based on art 7(1) of the Directive) which shall give the trade mark holder the right to ask the court to implement (preliminary) measures obliging the infringer to present particular documents or tolerate the inspection of products which are under his control. For such an order, the alleged infringement must be sufficiently probable, the particular evidence exactly described by the trade mark holder and the evidence to be secured must be necessary to substantiate the trade mark holder’s claim. The draft law contains a provision according to which the trade mark holder may apply for an order on the rendering of documentation concerning banking activities and accounts and finances (also by way of preliminary order) or the access to this documentation in case a claim for damages resulting from a trade mark infringement on a ‘commercial scale’ apparently exists and the documents are necessary to substantiate such claim (envisaged new section 19b GTA). If confidential information is concerned, the court has to take appropriate measures for the protection of the information.

6.7 What level of proof is required for establishing infringement or invalidity?

The court must be convinced by a degree of certainty that leaves no reasonable doubts that an infringement or invalidity exists.

6.8 How long do trade mark infringement proceedings typically last? Is it possible to expedite this process?

The length of infringement proceedings in the first instance depends on the particular court hearing the case. Generally, proceedings take about eight months from the filing of the complaint until the court issues its decision. There are no means to expedite this process.

6.9 What options, if any, are available to a defendant seeking to delay the proceedings? Under what conditions, if any, can proceedings be stayed? How can a plaintiff counter delaying tactics of a defendant?

The defendant can apply for a stay of the proceedings if there are opposition proceedings or a nullity action pending. However, the German infringement courts rarely grant such a stay.
Also, the defendant can try to delay proceedings by applying for extensions of the deadlines to file briefs. However, courts will only grant the extension if it does not jeopardise the date of the hearing as scheduled in the early stages of the proceedings.
Furthermore, the defendant can try to convince the court that an expert opinion or a survey must be obtained. If the court follows this, the proceedings are delayed for several months. The plaintiff can try to avoid the court ordering an expert opinion or a survey by presenting the case in such detail that the court itself is able to decide upon its own competence.

7. Final Remedies

7.1 What remedies are available against a trade mark infringer (final injunction, delivery up or destruction of infringing products, publication of the decision, recall-order, monetary damages, etc)?

The trade mark holder is entitled to the following relief against a trade mark infringer (sections 14 et seq GTA):

final injunction to cease and desist from committing infringing acts (intent or negligence of the infringer is not required);
damages (intent or negligence is required). If intent or negligence is not given, the trade mark holder may recover so-called unjust enrichments from the infringer;
rendering of information about the distribution chain of the infringing products (intent or negligence is not required);
rendering of information about accounting for turnover and profits made with the infringing goods (intent or negligence is required);
destruction of the remaining infringing goods in the possession or ownership of the infringer (intent or negligence is not required).
According to the intended implementation of the Directive 2004/48/EC, the GTA will allow further remedies:
rendering of documentation and inspection of products being at the disposal of the infringer, if necessary to substantiate the claims of the trade mark holder;
rendering of documentation concerning banking activities and finances, if a trade mark infringement of commercial degree is sufficiently probable;
rendering of information by third parties about the distribution chain of the infringing products including information about the sales numbers and turnovers;
recall of infringing products from the distribution chain; and
publication of the decision confirming a trade mark infringement.

7.2 To the extent it is possible to obtain a final injunction against future infringement, is it effective against the infringer’s suppliers or customers?

A court decision ordering injunctive relief can only be enforced against the defendants involved in the infringement action. Unless the infringer’s suppliers or customers were included as defendants in the action, the decision cannot be enforced against them.

7.3 What monetary remedies are available against a trade mark infringer (reasonable royalty, lost profits, account of profits or some other basis)? Are punitive damages available? If so, under what conditions?

The plaintiff can choose one of the three following methods of calculation for damages:

The plaintiff can claim that his lost profits are compensated.
The plaintiff can claim to be paid a reasonable royalty (so-called ‘licence analogy method’). The royalty rate is usually the same as if the trade mark holder had granted a licence under usual market conditions.
The plaintiff can claim that the defendant surrenders all profits that he has made by using the infringed trade mark. In the past, this method was not very attractive because the infringer was allowed to deduct all costs from the profits., However, the Federal Supreme Court held in a decision of 2001 (Gemeinkostenanteil [2002] IIC 900 et seq) concerning the infringement of a design that the overheads cannot be deducted from the profits unless they can be specifically attributed to the production, marketing or distribution of the infringing product. As regards trade mark cases, the Federal Supreme Court has recently held that such principles of the decision Gemeinkostenanteil can also apply (Noblesse [2005] GRUR 2006, 419]. However, the plaintiff can only claim the profits specifically attributable to the use of the infringed trade mark itself. He cannot claim profits that result from the type or quality of the goods or services offered. The relevant portion of the overall profits can be estimated by the court.

Instead of claiming payment of damages the trade mark holder can claim that the infringer surrenders his ‘unjust enrichments’. In particular, this claim is brought in cases where the infringer did not act at least negligently. The ‘unjust enrichment’ to be surrendered is calculated in accordance with the licence analogy method outlined above. Punitive damages are unknown in German infringement proceedings.

8. Preliminary Relief

8.1 Is preliminary relief available? If so, what preliminary measures are available (eg, preliminary injunction) and under what conditions?

The most important preliminary measures are:

preliminary injunctive relief;
preliminary sequestration of infringing goods;
in cases of ‘obvious’ infringements, relief to be rendered information about the origin and the distribution chain of the infringing goods; and
in cases of ‘sufficiently probable’ infringements, preliminary seizure and preservation of evidence.

Usually, it is the major aim of the trade mark owner to restrain the infringer from making (further) use of the trade mark. Therefore, the most important and most easily available preliminary relief in German court proceedings is the preliminary prohibitory injunction. The trade mark owner does not have to prove that a trade mark infringement was committed or is about to occur, he has only to substantiate that a trade mark infringement is likely. Furthermore, there has to be a need of urgency. The current practice of most German courts is to presume the urgency, even if no explicit substantiation is given in this regard. In any case, the trade mark holder has to file the application in due course (within four to eight weeks) after he has obtained knowledge of all relevant facts or preliminary relief is excluded due to lack of urgency.
The other kinds of preliminary measures have specific further requirements. For example, a preliminary order for inspection of goods and documents possessed by the alleged infringer is only granted if there is a ‘substantial probability’ of infringement. If a preliminary seizure of goods is requested, the appellant must show that he likely has a claim for delivery up and destruction of the respective goods. Preliminary relief in the form to get information about the origin and the distribution chain of the infringing goods is granted in cases of ‘obvious’ infringement only, ie if the infringement is so evident based on the available facts that a false decision by the court appears to be extremely unlikely.

8.2 Is ex parte relief available, where defendant is given no notice at all? If so, under what conditions?

German courts can issue preliminary injunctions and further measures of preliminary relief ex parte, ie, without oral hearings or giving notice to the defendant. The grant of ex parte preliminary relief requires that the matter is so urgent that an oral hearing is likely to interfere with the purpose of the preliminary measures. In cases of clear-cut trade mark infringements the majority of preliminary injunctions are granted ex parte.

8.3 Is plaintiff entitled to ask for an order that defendant’s premises are searched and a description of the infringing goods (and the accounting relating thereto) is made in order to establish proof of infringement (saisie-contrefaçon)? If not, what other mechanisms, if any, are available for seizing and preserving evidence for trial?

The implementation of Directive 2004/48/EC will significantly improve the situation of the trade mark owner in obtaining pre-action evidence in Germany. Pursuant to the Directive, the member states shall ensure that national courts have the power to order provisional measures to preserve evidence of infringement even before commencement of the actual proceedings. Where delay might cause irreparable harm a court must be able to grant the order upon application of the trade mark owner and may do so ex parte. However, the trade mark owner has to provide the courts with reasonably available evidence to enable the court to satisfy itself to a sufficient degree of probability that the applicant’s rights are being infringed or that such infringement is imminent.
The German governmental draft of the implementation of the Directive foresees that the new section 19a GTA can also be enforced by granting measures of preliminary relief.

8.4 Can the defendant put the validity of a trade mark in issue in preliminary injunction proceedings?

Infringement and invalidity proceedings are separated under the GTA. Accordingly, the issue of invalidity of the trade mark for absolute grounds will not be recognised as a defence in the main action for trade mark infringement. In principle, this also applies to preliminary injunction proceedings. Furthermore, in such proceedings a German court cannot stay the proceedings in view of pending invalidity proceedings against the German national trade mark in dispute. For this reason, some German courts have in recent decisions considered the question of validity of a trade mark and refused to grant a preliminary injunction where it was obvious to the court that the trade mark was invalid based on absolute grounds.

8.5 What is the format of preliminary injunction proceedings?

As in main proceedings, the emphasis is on written briefs to the court. If the court grants a preliminary injunction ex parte, there is not even a hearing.
An action for preliminary relief is started by a written application of the trade mark holder. The court will then decide whether it:

rejects the application;
requires that a hearing is held; or
grants the injunction without a hearing ie, ex parte.

If the court decides that a hearing shall be held, the alleged infringer can usually submit a written defence brief to the court. If there is sufficient time before the hearing, the applicant can also submit a further brief.

8.6 To what extent are documents, affidavits, witnesses, and/or (court-appointed or private) experts used in preliminary injunction proceedings?

Documents and affidavits are the most important means of evidence in preliminary injunction proceedings. Contrary to main actions, only witnesses that are present at the oral hearing can be heard. Furthermore, as preliminary injunction proceedings are fast-moving proceedings, expert opinions are not obtained by the court but the parties may (at least theoretically) bring their own experts as witnesses to the hearing.

8.7 What level of proof is required for establishing infringement or invalidity in preliminary injunction proceedings?

Preliminary injunctions are granted in summary proceedings. All relevant circumstances only have to be accredited. The level of proof thus is lower than in main actions. The trade mark owner applying for a preliminary injunction has to substantiate all requirements for the validity of his trade mark, eg registration and usage, and the infringing act.

8.8 How long do preliminary injunction proceedings typically last?

If the court grants the injunction without hearing (ex parte), it will grant the injunction within a few days, sometimes even within a few hours. If the court orders a hearing, it will usually take place within three to six weeks. The court will then decide either at the end of the hearing or within a few days thereafter.

8.9 Where a preliminary injunction is granted, is it necessary to start main action proceedings to confirm the preliminary injunction?

It is not necessary per se to start main proceedings following the grant of a preliminary injunction. However, the defendant can apply to the court for it to set a deadline for the trade mark holder to start main infringement proceedings. If the trade mark holder fails to start main proceedings within the set deadline, the preliminary injunction becomes unenforceable.

9. Appeal Procedure

9.1. What avenues of appeal are available for a defeated party in main proceedings or preliminary injunction proceedings? Under what conditions?

A District Court’s decision in main infringement proceedings may be appealed to the Higher Regional Court of Appeal. The appeal must be filed within one month of the written decision being served. The appellant does not need the leave of the District Court or the Higher Regional Court of Appeal for the appeal. The Higher Regional Court of Appeal reviews both the facts and the law. The possibility to introduce new facts is very limited.
The decision of the Higher Regional Courts of Appeal can be further appealed to the Federal Supreme Court. The appellant needs either the Higher Regional Court of Appeal’s or the Federal Supreme Court’s leave for the appeal. This further appeal is limited to a review of questions of law.
In preliminary injunction proceedings, the avenue of appeal available depends on what kind of decision the court issued. If it granted the preliminary injunction after a hearing, the decision can be appealed directly to the Higher Regional Court of Appeal. If the court decided without hearing, the defendant can file an opposition. In this case, the District Court, that issued the preliminary injunction will schedule a hearing and then decide whether it upholds its preliminary injunction. The District Court’s decision following the hearing can then further be appealed to the Higher Regional Court of Appeal.
Further, the Higher Regional Court of Appeal hears appeals against the decisions of the District Court rejecting an application for a preliminary injunction. Neither the District Court nor the Higher Regional Court of Appeal needs to grant leave for an appeal. As in main proceedings, the Higher Regional Court of Appeal undertakes a full review of both the facts and the law. There is no further appeal against the Higher Regional Court of Appeal’s decision in preliminary injunction proceedings.

9.2 How long do appeal proceedings typically last?

Appeal proceedings before a Court of Appeal usually last between 15 to 18 months. A further appeal before the Federal Supreme Court usually takes about two to three years.

10. Litigation Costs

10.1 What level of cost should one expect to incur to take a case through to a first instance decision, preliminary injunction proceedings and/or appeal proceedings?

Firstly, the plaintiff has to pay the court fees upfront. The court fees depend on the so-called ‘value in dispute’. The ‘value in dispute’ is the (estimated) economic interest that the plaintiff has in pursuing the case but is not equal to the estimated damages. Accordingly, the value in dispute varies depending on the individual case. In trade mark infringement matters, the value in dispute typically is within the range of €100,000 to €3m. In high value litigation, it may also be in excess of €5m.
The minimum amount for lawyer’s fees is regulated by the Code of Lawyer’s Fees (Rechtsanwaltsvergütungsgesetz, RVG). Court fees are regulated by the Code of Court Fees (Gerichtskostengesetz, GKG). Both statutory lawyer’s and court fees relate to the respective value in dispute: the higher the value in dispute the higher the costs, although the relationship is not linear but declining. For example, the court fees at a value in dispute of € 100,000 amount to approximately €2,600. At a value in dispute of €1m, court fees are approximately €13,400. Statutory lawyer’s fees in first instance at a value in dispute of €100,000 amount to approximately €4,000 net, at a value in dispute of €1m, they amount to approximately €13,400 net, in each case plus expenses and value added tax for German clients (19 per cent). Furthermore, fees for taking evidence or fees for settlements may be incurred as well.
Fees for appeal proceedings are higher, both for court fees and lawyer’s fees. At a value in dispute of €100,000, court fees amount to about €3,500 and lawyer’s fees amount to about €4,500 net. At a value in dispute of €1m, fees add up to about €17,900 (court) and about €15,000 net (lawyer). Expenses have to be considered as well.
The foregoing principle is also applied in preliminary injunction proceedings. As preliminary injunction proceedings are of a preliminary nature only, some courts have held the ‘value in dispute’ to be about 30 to 50 per cent lower than it would be for a main action based on the same set of facts. However, other German courts usually do not make a reduction in case of preliminary proceedings.
In order to relate lawyer’s fees to the efforts made in each individual case, many specialised law firms handling trade mark infringement cases charge fees based on the time spent in cases where the time needed is not sufficiently covered by the statutory minimum fees. This can, particularly in complex trade mark infringement cases, result in significantly higher lawyer’s fees than the fees according to the value-based RVG.

10.2 Are costs recoverable from the losing party?

The losing party has to reimburse the winning party for all court fees paid. Furthermore, the losing party has to reimburse the winning party’s lawyer’s fees. However, the amount of fees that can be recovered is limited by the statutory fees according to the above-mentioned Code of Lawyer’s Fees.

11. Forthcoming Legislation

11.1 What are the important developing and emerging trends in your country’s trade mark law?

As outlined above, the upcoming implementation of the Directive 2004/48/EC on the Enforcement of Intellectual Property Rights will bring significant changes to German trade mark law.

11.2 To the extent it relates to trade mark enforcement, please outline any major trade mark legislation in the pipeline.

The Directive 2004/48/EC will be implemented in Germany together with two further EC regulations: the so called ‘Anti-Piracy-Regulation’ (Regulation 1383/2003/EC) and Regulation 510/2006/EC regarding the protection of geographical indications and designations of origin for agricultural products. The legislative procedure started at the beginning of 2007 and will probably be finished by the end of 2007.

12. Useful References

12.1 Please identify any useful works of reference relating to trade mark law and trade mark litigation in your country including useful websites.

Websites
www.dpma.de (German Patent and Trade Mark Office);
www.wipo.int (World Intellectual Property Organisation);
www.bundesgerichtshof.de (German Federal Supreme Court);
www.internetmarken.de (German Trade Mark Act in English).

Commentaries
Ingerl/Rohnke Commentary on the German Trade Mark Act (2th edn., 2003) (in German);
Ströbele/Hacker Commentary on the German Trade Mark Act (8th edn., 2006) (in German).

Periodicals
International Review of Intellectual Property and Competition Law (IIC);
European Intellectual Property Review (EIPR);
Gewerblicher Rechtsschutz und Urheberrecht (GRUR) (in German);
Gewerblicher Rechtsschutz und Urheberrecht Internationaler Teil (GRURInt) (in German);
Gewerblicher Rechtsschutz und Urheberrecht Rechtsprechungs-Report (GRUR-RR) (in German);
Markenrecht (MarkenR) (in German).