As we all know, coffee is the master of modern mankind. Without it, no one would be able to go the office at 9 am and no one would be able to go out at night without at least one nap in the pm. That’s why many people prefer an easy way to prepare coffee, like e.g. a french press. The Upper Regional Court (OLG) of Frankfurt recently ruled about french presses and unfair competition law, whose importance for the protection of designs should not be underestimated.
Battle of the coffee makers
In the case at hand, the parties are competitors in the distribution of coffee makers. The applicant (Bodum) is the manufacturer of the coffee maker “Chambord”. That particular french press has been marketed for decades and is something of a classic. It even got a bit of a revival in the last two years or so. In Germany, more than 20 000 units are sold annually. German brand “Melitta” produced a knock-off version of the Chambord french press, against which Bodum applied for an injunction.
The plaintiff based it’s claims on unfair competition law. § 4 Nr. 3 German Unfair Competition Act (UWG) provides “ancillary protection” for products which are copied by competitiors. The primary requirement: “competitive originality”, which the court affirmed the Chambord model has, even if the public no longer attributed the dominant design features to a particular manufacturer. What exactly is this “competitive originality”? Don’t we have design protection? Don’t you have to register it? Doesn’t EU Design Law only offer unregistered design protection for 3 years?
Yes, that is true. But competition law offers this one trick, which every savvy designer and manufacturer should know.
What is competitive originality?
Competitive originality, according to the German Federal Court of Justice (BGH), means that the concrete object or certain characteristics of this object are the reason why interested purchasers associate the product with their commercial origin (BGH, 20.05.2009 – LIKEaBIKE). The finding of unlawful imitation requires an overall assessment and needs to take into account all relevant circumstances on the market and their interdependence such as the degree of competitiveness and individuality, the degree and the means of the copy as well as other competitive circumstances (BGH, 11.01.2007 – Kelly Bag).
The competitive originality of a product can also be based on technical elements. This can be assumed generally, if the competing products on the market are significantly different from the products in question. For example, as a first step a potential claimant needs to assess the “originality” of his own products in comparison to other products available on the market. If his products can clearly be distinguished from others, the finding of competitive originality is very likely.
Passing off and trade dress
Competitive originality has some similarities with trade dress protection known in the US. Trade dress is the commercial look and feel of a product or service that identifies and distinguishes the source of the product or service. It includes the various elements (such as the design and shape of materials) used to package a product or services. For example, Hard Rock Café and Apple Stores use distinctive decor, which is considered trade dress. This look and feel is protected if it serves to protect the ability to identify the source of goods just as a trademark does. But trade dress protection is considered part of trademark law. Competitive Originality does not need distinctiveness and second meaning apart from the basic meaning described above.
There are also some big similarities to “passing off” from UK and US law. Passing off is the tort of putting up goods in such a way that the goodwill of another trader is harmed. The paradigm case is that of selling goods under the pursuer’s name or mark or using his get-up or set-up (i.e. packaging). This leads to confusion in customers. Both legal figures are based in tort law and have a very similar function.
How does it differ from the Unregistered Community Design?
The Unregistered Communtity Design offers protection for designs as defined by the EU Design Regulation even without registration for up to three years, but only against copycats. That is quite similar to what you know about competitive originality so far, right?
In the past, the courts regularly judged IP laws to be “leges speciales“, which prohibit claims from the unfair competition act. But for a while now, the majority opinion is, that unfair competition law offers “ancillary” protection. That is because of two reasons:
First, the purposes of protection under fair trading law and design protection differ. Whereas the latter is intended to protect the product as a result of labor and investment as such, the protection under unfair competition law is concerned with the manner in which someone else’s work is imitated. Basically, one can say “that’s not fair” and immediately race to the courts.
Second, the requirements for protection are not the same. According to EU Design law, designs must be new and have individual character. A product possesses competitive individual character, if its concrete design or certain features are suitable for informing the interested public of its commercial origin or its special features. This can be, for example, an idea of quality so that the customer wants the original product and not a plagiarism. Design protection grants an exclusive IP right and thus creates an incentive for creative designs. Unfair competition law protects an established position on the market against unfair exploitation.
Protection under the Unregistered Community Design and the UWG are therefore not mutually exclusive but complementary.
How exactly does § 4 Nr. 3 UWG help me?
In order to assert claims under § 4 Nr. 3 UWG the imitation of a product is required. First of all, this means that the product or a significant part of it must be similar to the original in a way that it is possible to recognize that the original was used as a model for the alleged copy. The original product does not need to be exactly the same in all design elements, if the copy is just a partial imitation, then indeed the copied or imitated part must reveal the elements that have been identified to be competitively original. Imitation is impossible, if the copy constitutes an independent development.
If a competitor causes an avoidable deception of origin when he sells plagiarisms, he acts in an unlawful way. This is the case if purchasers would be inclined to associate the copy and the original in a way so that they actually believe the goods have the same commercial origin. The question whether an avoidable deception of origin is caused must be assessed by taking the perspective of the relevant purchasers. If the relevant purchasers belong to a certain group of purchasers, such as fashion experts with special knowledge, for example, their perspective is decisive.
However, according to German case law, the use of clearly recognizable designations of origin that do not allow an association with the manufacturer of the original product, is likely to exclude an avoidable deception of origin. It is therefore highly advisable for a manufacturer of originals to analyse the competitor’s goods in question before filing a lawsuit for infringement of unfair competition law.
The coffee case to the rescue
This particular french press case is relevant, because the court set the bar to substantiate claims under unfair competition law … quite low actually. In order to demonstrate the competitive character of a product, it is sufficient to describe those characteristics which are intended to establish it. It is then up to the defendant to present facts which call into question the emergence of a characteristic in itself (competitive environment, imitations).
Contrary to the opinion of Melitta, it is not necessary for the plaintiff to make a presentation on the competitive environment in order to conclusively demonstrate competitive originality. In principle, the plaintiff bears the burden of proof and demonstration for everything he or she bases their claim on. If the plaintiff has done so, the defendant bears the burden of proof in turn for the facts which prevent competitive originality (e.g. previously known designs) or which justify its weakening or elimination (e.g. through the appearance of similar products on the market or through the distribution of the product under third-party labelling to a not only minor extent). In particular, he must demonstrate the market significance of products with which he intends to challenge the competitive nature of the counterfeit product.
While the “Chambord” press has been on the German market for decades, an increased originality due to high brand awareness cannot be assumed. Bodum claimed to have sold 100.000 units – but failed to substantiate that claim. In any case, a more detailed information on market share or advertising efforts would have been necessary. However, the originality isn’t weaker than usual either. The defendant was not able to prove that there are significant designs in the competitive environment which have an effect on the distinctiveness of the plaintiff’s coffee maker.
Even the sale of the original by the manufacturer under the second trademark (Melior) cannot call the individual character into question if the sale took placeover ten years ago. If the sales promotion remains a one-off or two-time event, there is nothing to suggest that the public will still have reason to think of it and thus to assume that the design is now common property.
Design and unfair competition law offer their own distinct advantages and downsides. Nevertheless, it is always smart not to forget claims based on competitive originality as they offer an additional mode of protection even if an IP right has run out or has never been registered.
UWG protection is often the last line of defence, when things are already on their way south. Unfair competition law does not prohibit the manufacture of a specific object but only its distribution. The preventive effect of an IP registration cannot be achieved through § 4 Nr. 3 UWG. Also, it does not provide for a right to destruction. Furthermore, it does not have a blocking effect (protection against “double creations”) but only concerns imitations (unlike registered design law, but akin to copyright and unregistered design law). Unfair competition law claims become unenforceable after only 6 months. Last, UWG claims are not transferable.
These downsides notwithstanding, unfair competition claims have become a tried and tested strategy to defend against plagiarisms. Every IP lawyer should know their way around the UWG and comparable national laws.
Image by Izzy Rivi on Unsplash