JURISDICTION REPORT: GERMANY


PASSING OFF: THE SHELVING SYSTEM CASE


Jens Künzel Krieger Mes & Graf v. der Groeben


In Germany, as in many other European jurisdictions, claimants may not only rely on registered design rights in order to attack pirated or otherwise copied products. German courts have established a wide body of case law shaping the unfair competition claim of passing off, which has proved to be a remarkably important ‘last resort’ for companies who—for one reason or another—do not possess the necessary design rights in order to fend off competitors.


In principle, the manufacturer of a product may have a claim for passing off if his product is sufficiently ‘original’ in the sense that it possesses distinctive characteristics that set it apart from competitors’ products in the same area; and if there are special circumstances that justify the verdict that the distribution of the attacked product constitutes unfair competition. Te second pre-requisite can be established if the design of the attacked product is so close to the original that there is the imminent risk that the consumer will be unavoidably deceived about its origin.


Te courts, above all Germany’s Federal Supreme Court, have established a wide-ranging system of conditions and exceptions to the general rules for passing off, mainly in order to accommodate legitimate concerns that the system of competition in a free country depends, to a large degree, on the competitors’ possibility to present marketable alternatives to well received products. So one of the cornerstones in German unfair competition law of passing off is that—in principle—competitors are free to copy products when no IP right is infringed. In practice, passing off has acquired a much more important position in the law of unfair competition.


In the Shelving System case, the German Federal Supreme Court had the opportunity to develop the law of passing off in respect of one important defence. A Czech manufacturer of shelves had identically copied—so it seemed—the different parts of a well-known shelf system that had been on the market for at least 30 years. Te Czech manufacturer claimed that consumers had a legitimate interest to have an alternative supplier for parts of the original system that were compatible, in the sense that the alternative parts fitted, not only technically, but also visually, into the original system. Te first instance court (Cologne) denied the original manufacturer’s claim while the Court of Appeal (Cologne) affirmed it.


Te Federal Supreme Court held that while the likelihood of deception of the consumer could not be denied, this deception may nonetheless be unavoidable in order to accommodate the competitor’s interest to present a visually compatible product that fitted in the original system. If such a legitimate interest on the part of the defendant competitor could be established, the defendant was obliged only to take such measures that would reduce the danger of deception as much as possible, but was not


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obliged to resort to a completely new design that would, in effect, render the whole set of products incompatible with the original system.


Te court thereby held that such a legitimate interest should not only be recognised in cases where the defendant argued that his product had to be technically compatible; the court now broadened this defence in that, for the first time, a defendant was allowed to argue that there was an interest on his part to offer visually compatible products. Such an interest could be established if the original system demanded, from the point of view of the consumer, that supplementary parts fit visually in the original system, and the marketability of the compatible parts relied on their being visually compatible.


However, since the Court of Appeal had not yet established all the facts necessary to find for such a legitimate interest—the decisive question—the case was remanded back to the Cologne Court of Appeal. Te Court of Appeal was advised that the obligation of the defendant to take all measures necessary to reduce the existing danger of deception did not mean that his own trademarks had to be eye-catching, because that may be in conflict with the pre-requisite that the product must remain visually compatible with the original system. Te decision of the Court of Appeal in the second round, aſter the case has been heard again, will be interesting.


Jens Künzel, LLM, is a partner at Krieger Mes & Graf v. der Groeben. He can be contacted at: jens.kuenzel@krieger-mes.de


World Intellectual Property Review September/October 2013 171


“THE DEFENDANT WAS OBLIGED ONLY TO TAKE SUCH MEASURES THAT WOULD REDUCE THE DANGER OF DECEPTION AS MUCH AS POSSIBLE, BUT WAS NOT OBLIGED TO RESORT TO A COMPLETELY NEW DESIGN.”


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