In a trademark dispute between Volkswagen AG and the online edition of Germany’s BILD-Zeitung, Germany’s Federal Court of Justice had to decide whether an advertising campaign by the BILD infringed VW’s trademark rights.
Background to the trademark dispute
The trademark dispute between the well-known vehicle manufacturer Volkswagen AG (claimant) and the online edition of the BILD-Zeitung (defendant) arose after the BILD ran an online advertising campaign using slogans such as ‘Volks-Inspektion’(people’s inspection), ‘Volks-Reifen’ (people’s tyres) and ‘Volks-Werkstatt’ (people’s garage).
The dispute landed in front of Germany’s Federal Court of Justice which had to decide whether the BILD’s advertising campaign infringed Volkswagen’s trademark rights (case ref.: I ZR 214/11).
Main facts of the case
In 2009 the BILD-Zeitung ran an advertising campaign on its website offering vehicle service coupons of €49 for use at participating garages. The advertising campaign described the possibility to conduct a ‘Volks-Inspektion’ at a ‘Volks-Werkstatt.
The words and visual design of ‘Volks-Inspektion’ had previously been registered by Volkswagen as trademarks. The words ‘Volks-Werkstatt’ referred to maintenance garages operated by the firm ATU.
Volkswagen sued the BILD-Zeitung claiming that the advertising campaign infringed the ‘VOLKSWAGEN’ registered trademark.
The court of first instance found in favour of the claimant, granting an injunction and ordering compensation to be paid. However, on appeal the decision was overturned. The claimant then appealed to Germany’s Federal Court of Justice (Bundesgerichtshof, BGH) to have the original judgment reinstated.
The legal basis for bringing a trademark claim is whether there is a risk that consumers will confuse the disputed name, words or symbol with the registered trademark.
If there is a risk of confusion, the owner of the registered trademark is entitled to prevent the third party from using the sign (Art. 9(1)(b) (EC) No 207/2009 and § 14(2)(ii) German Trademark Act).
The appeal court in this case argued that, while the advertising campaign used words in a similar fashion to the registered trademark, the ‘VOLKSWAGEN’ brand had such a high public profile that it is strongly distinctive and therefore there was no risk of confusion.
The BGH affirmed that the appeal court had correctly determined that the words used by the BILD-Zeitung were used in similar fashion to the registered trademark, but reversed the final decision, arguing that there was indeed a risk of confusion.
Risk of confusion
The BGH clarified that a risk of confusion exists if consumers’ knowledge of the origin of the products or services is impaired. The factors used determine this include the strength of a product or service’s public profile, the associations drawn as a result of the trademark and the strength of the similarity between the disputed mark and the registered trademark.
The court confirmed that the basic principle underlying trademark law is the overall impression given when comparing the two marks, the BGH affirmed.
In the court’s view, the fact that both ‘VOLKSWAGEN’ and ‘Volks-Reifen’ contain the word ‘Volks’ therefore does not give rise in itself to a trademark infringement. However the court argued that the word ‘VOLKSWAGEN’ is considered by consumers in the whole and that the word ‘WAGEN’ also has a distinctive character.
The court decided that while consumers may be able to differentiate between the actual marks taken on their own, there was a risk that when viewed in light of the similarities between the two trademark owners’ general commercial activities, there was a risk of confusion in the widest sense.
The need for protection
The BGH also considered VOLKSWAGEN’s need for protection.
Referring to its own case law and the case law of the European Court of Justice, the BGH noted that while the possibility of consumers drawing general associations between two trademarks is insufficient to justify a claim for trademark infringement, trademarks which possess a strong public profile, benefit from an increased level of protection. This is because there is an increased risk of competitors attempting to use and benefit from the protected trademarks in business.
The court determined that ‘VOLKSWAGEN’ possesses a strong public profile and therefore benefits from such an increased level of protection.
The BGH concluded that the BILD’s advertising campaign did infringe VOLKSWAGEN’s trademark rights. The judgment highlights some important principles of trademark law.
The risk of consumers drawing general associations between two businesses as a result of two similar trademarks is generally insufficient to justify a claim for trademark infringement. However, it should be remembered that the courts consider all the circumstances in the case and that trademarks which have strong public profiles enjoy a higher level of protection.
Businesses should therefore always be cautious when choosing a mark or brand to ensure they avoid costly litigation. Conducting a trademark search is the first step to protecting your business.