DSGV, the umbrella association of Sparkassen Group, is the holder of the German color mark “red.” The trademark was entered into the Register based on its secondary meaning.
DSGV used this color mark e.g. to sue the Spanish Santander Bank for using its own corporate color, “red,” albeit a different shade of red, e.g. on the occasion of the Formula One event “Santander German Grand Prix 2001” for its advertising on the streamers and on the rear wall of the podium. Defendant 2 in the infringement case is the parent company of “Santander” Group, a Spanish financial conglomerate which operates internationally. Defendant 2 has a branch office in Germany and has a license to conduct banking transactions in Germany. Its subsidiary, Defendant 1, maintains about 200 bank branches in Germany.
The defendants counter-attacked and asked the German Patent and Trademark Office to cancel the abstract color mark “red” which is described above. They asked for a stay of proceedings in the infringement case until a decision could be made on this cancellation request.
The appellate court in the infringement case (the Higher Regional Court of Hamburg) granted Defendant 1’s motion for a stay of proceedings. The Higher Regional Court of Hamburg also issued a partial judgment in favor of Defendant 2 dismissing DSGV’s appeal against the first-instance judgment dismissing the complaint.
On DSGV’s appeal on points of law, the Federal Supreme Court overturned the partial judgment by Judgment of 23 September 2015 and referred the matter back to the appellate court for a new hearing and decision (this Judgment is printed in GRUR 2015, pp. 1201 et seq.).
The Federal Supreme Court ruled that DSGV did not have a claim against Santander Group pursuant to §§ 14(5) and 14(2) No. 1 of the Trademark Act (protection of identity) because Santander Group was using a different shade of red. The court found that the marks used by the two companies were therefore not identical, so that § 14(2) No. 1 of the Trademark Act does not come into consideration as the basis for a claim.
The Federal Supreme Court also found that no claim exists pursuant to §§ 14(5) and 14(2) No. 2 of the Trademark Act (risk of confusion) because Santander Group did not use its corporate color “red” as a trademark in this case.
However, the Federal Supreme Court came to the conclusion that the existence of a claim pursuant to §§ 14(5) and 14(2) No. 3 of the Trademark Act (protection of familiar trademarks) could not be denied. It considered that the abstract color mark “red” held by DSGV is a well-known trademark. For such a claim to exist, it would be sufficient to find interference with a function other than that of identification of origin. The Federal Supreme Court referred the matter back to the appellate court for clarification as to whether this claim ultimately exists.
By Order of 21 July 2016, the Federal Supreme Court has also issued a decision on the request by Santander Group for cancellation of the abstract color mark “red.”
The Federal Supreme Court began by upholding the view of the Federal Patent Court to the effect that the obstacle to absolute protection is a lack of distinctiveness in accordance with § 8(2) No. 1 of the Trademark Act. The court stated that abstract color marks are generally not distinctive and therefore not eligible for entry in accordance with § 8(2) No. 1 of the Trademark Act because the relevant consumers typically perceive color as a decorative element and not as an identifying mark. However, the court found that this obstacle is overcome by the secondary meaning assumed by the German Patent and Trademark Office at the time of the registration.
In the cancellation proceedings, DSGV was no longer able to demonstrate a secondary meaning of the abstract color mark “red” at the time of registration (7 February 2002). However, it was able to explain and demonstrate, through the presentation of relevant expert opinions, that the abstract color mark “red” did have such a secondary meaning for the services in question at the time of the decision on the cancellation request. The court held that this was enough to dismiss the cancellation request because, pursuant to § 50 of the Trademark Act, cancellation is only to be made if the obstacle to protection exists even at the time of the decision on the cancellation request. The court ruled that this was not the case since DSGV was able to show that a secondary meaning existed at that time, so that the cancellation request was to be dismissed.
Conclusion
Those facing a cancellation request pursuant to §§ 50 and 8 of the Trademark Act should commission expert opinions to this effect after receiving the request for cancellation at the latest and, if the proceedings last for a long time, should present not just one but multiple expert opinions, particularly relating to the time shortly before a decision is made on the request.
