German FCJ on the exploitation of the reputation of geographical indications as collective trademarks

Background

The applicant, an association of farmers with approximately 1450 members, is the proprietor of the German collective trademarks “Hohenloher Landschwein” (= “Hohenloher country pig”) and “Hohenloher Weiderind” (= “Hohenloher pasture beef”). The trademarks are meant to indicate that pork and beef labelled with the trademarks come from the region of Hohenlohe (Germany) and comply with the association`s guidelines. The terms are, however, not registered as geographical indications or designations of origin under Regulation (EU) No 1151/2012. In 2016, the plaintiff took action against a regional butcher shop. The latter advertised its meat products with the terms "Hohenloher Landschwein" and "Hohenloher Weiderind" without being a member of the association of farmers. The plaintiff considered this to be an infringement of its trademarks and brought an action before the Regional Court of Stuttgart after issuing an unsuccessful warning letter.

The court of first instance dismissed the action (District Court of Stuttgart, judgment of 3 April 2018 – case no. 17 O 1532/16), but the plaintiff successfully appealed the decision. The Higher District Court of Stuttgart (judgement of 25 July 2019 – case no. 2 U 73/18) affirmed the plaintiff`s claims and pointed out that the defendant did not comply with the association`s guidelines but used the identical signs "Hohenloher Landschwein" and "Hohenloher Weiderind" for its meat products nonetheless. Contrary to the view of the District Court of Stuttgart, the Higher District Court found that the plaintiff's trademark claims were not precluded by Sec. 100(1) of the German Trademark Act (MarkenG). This states that the registration of a geographical indication as a collective trademark shall not grant its proprietor the right to prohibit a third party from using the indications covered by the collective mark in the course of trade - provided that the use is in accordance with accepted principles of morality and does not infringe Sec. 127 MarkenG, which governs the protective content of geographical indications.

The Higher District Court also stated that the Regulation on quality schemes for agricultural products and foodstuffs (Regulation (EU) No 1151/2012) would not preclude an application of Sec. 127 MarkenG, as assumed by the District Court of Stuttgart. Moreover, the Higher District Court of Stuttgart took the view that the use of identical signs without any addition to distinguish them from the plaintiff's collective trademarks cannot be considered in accordance with principles of morality. The court found that the defendant’s sole intention was to exploit the trademark for the promotion of sales. The subsequent appeal against the decision of the Higher District Court of Stuttgart filed by the defendant was unsuccessful.

Decision

The FCJ confirms the infringement of the plaintiff's collective trademarks.

The FCJ shared the Higher District Court’s view that Sec. 100(1) MarkenG does not apply in favor of the defendant. Regulation (EU) No 1151/2012 on quality schemes for agricultural products and foodstuffs does not preclude an application of Sec. 100(1) MarkenG. Rather, the protection of (geographical) collective trademarks based on the fully harmonized law of the Member States exists independently of the protection of geographical indications and designations of origin granted by the regulation. That is clear, in particular, from Article 14 of the regulation which allowed Member States to continue registering trademarks that contain designations of origin and geographical indications. Under Article 14(1) of the regulation, registration of a trademark is to be refused only after an application for protection of the geographical indication has been submitted to the European Commission. The regulation is aimed solely at preventing the registration of trademarks which conflict with geographical indications or designations of origin registered under the regulation. Since the application for registration of the signs “Hohenloher Landschwein” and “Hohenloher Weiderind” as collective trademarks was filed in 2011, and thus even before the regulation entered into force in 2012, and since those terms are not protected as regional indications of origin, the scope of protection of the collective trademarks is not affected by the regulation.

In order to determine whether the use of a geographical indication is in accordance with honest practices in industrial and commercial matters, as it says in the EU trademark directive, or in accordance with accepted principles of morality within the meaning of the corresponding Sec. 100(1) MarkenG, it is necessary to ascertain whether the third party is acting unfairly against the legitimate interests of the trademark owner. To that purpose, an overall assessment of all relevant circumstances of the individual case is necessary. In that context, among other factors, account must  be taken, of the efforts made by the third party to ensure that consumers are able to distinguish its goods from those of the trademark owner.

In the present case, the defendant had used the signs in identical form without making it clear to the targeted consumers by any indication that its products did not originate from a member of the plaintiff’s association of farmers. In the opinion of the FCJ, this was also done to exploit the reputation of the collective trademarks. The defendant was not primarily concerned with the use of the designations as geographical indications, but with exploiting the good reputation of the collective trademarks to promote sales. As a result and against this background, the appeal was not successful.

Comment

The decision of the FCJ clarifies two points in particular: On the one hand, the national trademark protection of geographical indications stands, in principle, independently alongside the protection of geographical indications and designations of origin guaranteed by the system of Regulation (EU) No 1151/2012. On the other hand, geographical indications which are part of a collective trademark pursuant to Sec. 97 et seqq. MarkenG, may in principle also be used by third parties who do not belong to the entitled collective members, provided that the use is not contrary to the accepted principles of morality. Such violation of morality depends to a large extent on the specific use of the geographical indication. In order to avoid that consumers are misled and the associated legal risks, the use should keep the greatest possible distance from the collective trademark in question.

Authored by Thorsten Klinger and Patrick Fromlowitz