Trademark law: model designation or trademark?

In numerous industries, especially in the fashion sector, customers expect product names or find a garment more appealing if it bears a name. If one chooses a product name that another company has already registered as a trademark for clothing, a considerable legal risk arises. In certain cases, however, it can be argued that the product name is only an internal "model designation" or a mere "designation for ordering purposes". In a recent decision, the German Federal Court of Justice (BGH) made extremely relevant remarks on the distinction between model designations and trademarks.

Background

The difference between a model designation and a trademark is that the model designation serves only to distinguish different items of clothing from one manufacturer, whereas trademarks distinguish products from different manufacturers. One speaks in this respect of the so-called "indication-of-origin function" of a trademark.

Whether a certain sign is used "as a trademark" and can thus infringe third parties’ trademarks is decided on the basis of the perception of the public. A sign is only used "as a trademark" if the public perceives it in the form used at least also as an indication of origin to a certain manufacturer. The threshold for trademark use is set very low, so that even the objective, not entirely remote possibility that the public perceives it as an indication of origin is sufficient. Only in cases where a sign is undoubtedly not perceived as an indication of origin is there no trademark use.

In the fashion industry there is a widespread practice of using first names as model designations. Whether this leads consumers to perceive a first name used for clothing as a model designation or as a trademark must, however, be assessed in each individual case on the basis of the specific form of use.

Decision of the BGH of March 7, 2019 "SAM"

The applicant is the proprietor of the trade mark 'Sam', which is registered for clothing. The defendant had offered denim trousers on the internet and, in the context of the product description, had described the advertised trousers as "Model: Sam". The plaintiff brought an action for an injunction against this, with which it was successful at first and second instance.

The BGH set aside the judgment and remitted the case for further findings of fact. A rule according to which a normally distinctive sign is generally perceived as a trade mark was rejected by the BGH. It found that the perception of a sign “as a trademark” must always be explicitly found by the court, taking into account the overall impression imparted by the advertising. Whether consumers perceive "Modell: Sam" in the form in which it is actually used as a trade mark or as a purely internal model designation must therefore be examined more closely than the lower courts had done.

Decision of the BGH of April 11, 2019 "MO"

Shortly after the "Sam" decision, the BGH had the opportunity to further develop its thoughts on the distinction between model designation and brand. This case dealt with the question of the trademark-related use of the sign "MO" within the scope of the product designation "Bench Damen Hose MO". In contrast to the previously decided case, the concrete reference "model" was therefore missing and, moreover, it was the title of the offer and not merely a reference in small print within the product description. Ultimately, "MO" is certainly not a common name either.

According to settled case law to date and even after the judgement in the "Sam" case, it was therefore to be assumed that "MO" had been used as a trademark in the "MO" case. The BGH, however, also reversed the decision of the previous instance in this case and called for a more detailed consideration of the question of whether consumers perceive the sign "MO" in the product heading "Bench Damen Hose MO" as an indication of company origin or only as an internal model designation. In the reasons for the ruling, the BGH surprisingly raises doubts as to whether consumers also see an indication of origin in the labelling of a product consisting of a manufacturer ("Bench") and product designation ("MO"). This has so far been largely undisputed against the background of the widespread use of primary and secondary brands in the clothing sector.

Note

It is to be welcomed that the BGH demands a more intensive consideration of the question of trademark use. Especially in the case of use on the Internet, case law has been very generous in the past and has decided in favor of the trademark owner also in such cases, in which the use "as trademark" was rather doubtful. This will probably not be maintained in this form.

The BGH's clarification is also to be welcomed because the courts had developed diverging ruling practices on the question of trademark use. It remains to be seen how the decisions "SAM" and "MO" are received by the courts of instance. In any event, manufacturers, and in particular online merchants, now have significantly better opportunities to argue that a sign used by them in the product name is not perceived as a "trademark" and that there is therefore no trademark infringement.

Suppliers using product names are only on the safe side if they have them protected as an independent trade mark. Depending on the number of products, however, this can be associated with considerable effort. In the clothing sector, you move on comparatively safe ground if you use frequently occurring first names and label them with the addition "model" as the model designation.

In any case, the model designation should only be used on the Internet, in catalogues, etc. and not in or on the garment itself, since, for example, when model descriptions are depicted on labels, a consumer understanding as a “trademark” is much more likely. Moreover, in the event of a dispute, it is much easier to avoid the infringement if the designation is not on or in the garment.