The Terra Greca II decision of the BGH of 12 October 2023 (File number: IR 206/22)

The likelihood of confusion provisions of Sections 14 (2) No. 2 and 9 (1) No. 1 German Trademark Act implement the mandatory requirements of Art. 10 (2) lit. b) and 5 (1) lit. b) TMD 2015 with regard to registered trade marks. In this respect, the concept of likelihood of confusion – the most important element of harmonised trade mark law in practice – must be interpreted in accordance with the Directive and thus, in principle, uniformly throughout the EU. This is because the harmonisation objective of facilitating the free movement of goods and services can only be achieved with a standard of protection that is as uniform as possible in all member states (see expressly Ingerl/Rohnke/Nordemann, MarkenG, 4th ed. 2023, Section 14 para. 365; see also recital 10 MRRL 2015).

Decisions of the General Court are also taken into account at national level. In contrast, according to previous case law, decisions of the EUIPO were only so-called “examples of application” (see expressly Ingerl/Rohnke/Nordemann, loc. cit., Section 14 para. 380) – which are not consistently observed by national offices and courts.

In the Terra Greca II decision (GRUR-RS 2023, 37719), the BGH has now set a significantly different emphasis. The editorial guidelines of the decision are as follows:

1. If the defendant has filed an application with the EUIPO for a declaration of invalidity of the trade mark in suit on the grounds of likelihood of confusion and the plaintiff has submitted the decision rejecting this application before the oral hearing, citing the EUIPO’s submissions, it may violate the plaintiff’s right to be heard if the court does not address the EUIPO’s considerations in the judgement.

 

2. The court is obliged to take note of the EUIPO’s assessment of the likelihood of confusion and to subject its own divergent assessment to a critical examination, even if the EUIPO’s decision has not become final, a (final) decision of the EUIPO issued in the registration proceedings would not be binding for infringement proceedings of the courts of the member states and different standards exist in the examination of the similarity of the goods or services in the infringement and registration proceedings.

(emphasis added)

Unlike previously, a national court can no longer merely use an EUIPO decision as a possible example of application, which can just as well be disregarded; rather, it is required to make a deviating EUIPO decision the standard for its own examination, to critically scrutinise the latter – and, if it does not adopt the EUIPO’s position, at least to explain the circumstances on the basis of which it considers itself entitled to do so.

 

If it fails to do so, the Federal Court of Justice considers this to be a violation of the fundamental right to a fair hearing (Art. 103 (1) GG).

It now remains to be seen what consequences this shift in emphasis in the case law of the Federal Court of Justice will have at lower court level.