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The Trademark Law Reform 2018/19 in Germany

German Trademark Law Modernization Act

25 March 2019

On 11 December 2018, the German Bundestag passed the German Trademark Law Modernization Act (MoMaG), which came into force on 14 January 2019 (except for some parts taking effect on 1 May 2020). The MoMaG (among some other updates of the law considered necessary by the national legislator) finally transposes European Directive (EU) 2015/2436 regarding a trademark law reform “to approximate the laws of the Member States relating to trade marks” (“Reform”) into German law.

The Reform’s main objective is to further develop and strengthen the harmonization of European trademark law, taking into consideration important case law of the Court of Justice of the European Union in recent years. The Reform’s focus lies in particular in the simplification of the trademark application and registration proceedings and the enhancement of the degree of legal protection in order to fight product piracy more effectively in court as well as out of court (including before the trademark offices).

The main changes of the Reform in view of German trademark law and MoMaG shall thus be outlined below.

Adaptation to modern types of marks

Prior to the Reform, the German Trademark Act (GTA) required the “graphic representability” of a sign in order to be registered as a trademark in the trademark register, which in respect to modern trademark forms (e.g. olfactory marks, musical marks, three-dimensional marks) is not always easily achievable. To allow registration of such mark, European courts had to interpret Section 8 GTA in its broadest meaning. Following this case law, the new GTA stipulates that only designations should be excluded from registration if they

“are not capable of being represented in the register in such a way that the competent authorities and the public can clearly and unambiguously determine the subject-matter of protection”,

abandoning the rather strict requirement of graphic representability in favour of a more flexible concept of determinability. This adapts the German trademark law to modern forms of trademarks and improves the legal situation for unconventional trademark forms. Overall, it allows companies to also register trademarks by providing audio files or other technical media (admissibility to be determined at the discretion of the respective trademark offices).

Introduction of a national “certification mark”

Section 106a GTA introduces a so-called certification mark, a new form of quality‑related trademark. Unlike “classic” trademarks, certification marks shall not convey product origin, but shall encompass a warranty function, providing a transparent and neutral assurance of product quality, such as the “Fairtrade” symbol or the “TÜV” sign.

Independent trademark owners may award companies that meet certain quality criteria with a right of use. The quality criteria need to be defined by the owner in the mark’s statutes. The statute must be publicly accessible in the trademark register.

In this context, the owner takes the role of a certifier and is required to ensure that the user of the certification mark, i.e. the licensee, complies with the trademark statutes.

Fighting product piracy

Section 14a GTA now expressly regulates that a trademark owner may also enforce prohibition rights against goods in transit which in many cases involve counterfeit goods being transported through the EU market. Thus, where a trademark has been affixed to goods without the consent of the owner of the mark, the latter may, in the event of obvious infringements, prohibit the third party from importing the goods to Germany before the actual release of the goods into market circulation. This provides trademark owners with a remedy to fight trademark infringement early on.

Presumption of urgency in case of preliminary injunctions

As a matter of principle, the applicant for a preliminary injunction (PI) must substantiate “urgency” of the action, i.e. that immediate action of the court is required to avoid unbearable consequences for the applicant/trademark owner. However, exceptions to that principle exist, for example, in Section 12 (2) Unfair Competition Act (UCA), stipulating a (rebuttable) presumption of urgency. As previous pre-Reform trademark law did not include such a presumption, the applicability of the presumption in Section 12 (2) UCA to trademark cases under the GTA was regularly subject to intense dispute.

Against the above background, Section 140 (3) GTA now includes a presumption identical to Section 12 (2) UCA, harmonizing trademark law with unfair competition rules. In order to rebut the presumption of urgency, the defendant may bring forward evidence suggesting that the applicant was in fact aware of the alleged infringement much earlier and therefore is not entitled to a PI anymore (as he could have lodged it earlier). In such case, the applicant is entitled only to standard legal action.

Changes in trademark opposition proceedings

The new Section 42 (3) GTA stipulates that an opposition before the German Patent and Trademark Office (GPTO) may now be based on several prior rights if they are owned by the same owner. Apart from trademarks, geographical indications as well as indications of origin, Section 42 (5) GTA may provide ground for an opposition, but only against trademarks filed after 14 January 2019.

Further, important means of defense by the defendant/trademark applicant in opposition proceedings usually is the plea of non-use of the older trademark the opposition is based on. The plea of non-use is regulated in Sections 43 (1), 25 and 26 GTA and can only be levied after a five-year grace period. Previously, the grace period started with publication of the older trademark. Now, pursuant to Section 26 (5) GTA, the period begins when no further oppositions can be filed against the older trademark or the objection proceedings have ended, extending the grace period in some cases substantially.

In addition, the new Section 26 (3) GTA clarifies that not every design change of a trademark needs to be formally registered in order to comply with the use-criteria pursuant to Section 26 (1) GTA, provided that the difference does not alter the distinctive character of the trademark.

Finally, in order to increase the number of amicable settlements in the course of opposition proceedings, Section 42 (4) GTA introduces a cooling-off period granting the parties, on mutual request, at least two months to resolve the dispute amicably. The assertion of a legitimate interest or a sufficient cause is not required in this respect. However, the cooling-off period is not applicable for any oppositions pending before 14 January 2019.

Introduction of a new forfeiture and invalidity proceeding

With the Reform, new forfeiture and invalidity proceedings before the GPTO have found their way into Sections 53 and 54 GTA (taking effect from 1 May 2020). The introduction of these procedures is intended both to speed up the duration of the procedure and to reduce procedural costs. They can be brought alternatively before the GPTO or an ordinary court, pursuant to Section 55 GTA. However, as the GPTO needs certain lead time to prepare for the new procedures, these provisions will not enter into force before 1 May 2020. Until then, the existing provisions on cancellation proceedings for forfeiture or invalidity will remain in force.

In this context, it is important to note that relative grounds for invalidity, such as existence of already registered trademarks within the meaning of Section 9 GTA, can now be asserted in the cancellation proceedings before the GPTO, providing a new remedy between opposition proceedings (Section 42 GTA) and cancellation proceedings before an ordinary court (Section 55 GTA).

Changes regarding the trademark register and the process of registration

According to Section 30 (6) GTA, it is now possible to register licenses in the trademark register. This is positive in view of the fact that further legal certainty will be ensured. This way, third parties will be able to easily determine whether someone is legally using a trademark. In addition, this can be a major advantage when it comes to detecting any plagiarism.

Furthermore, pursuant to Section 37 (6) GTA, third parties can be involved in the registration proceedings. While they may explain in written comments why a trademark shall not be registered, the GPTO will however not be obliged to take these comments into account. In addition, the third parties will not become parties to the proceedings. This new procedure aims at preventing improper trademark application at an early stage without the need for time- and cost-intensive opposition proceedings or further proceedings later on.

Conclusion

Germany has finally managed to transpose Directive (EU) 2015/2436 into national law. In practice, the improved enforcement of trademark rights in preliminary proceedings through the presumption of urgency is particularly significant. By removing a procedural hurdle or at least an uncertainty, this should further increase the chances of trademark owners to enforce their rights.

In addition, the opening of the trademark register for new trademark forms, the introduction of a national warranty trademark as well as the new infringement situation for goods under customs supervision will further shape trademark law in the long term.