Mar 2024

Germany

Law Over Borders Comparative Guide:

Fashion Law

Introduction

The German fashion industry has recently been impacted by a surge in insolvencies, affecting even well-established companies. The industry has adopted a proactive approach to the current challenges it faces, investigating commercial opportunities in areas such as the metaverse. Many companies are looking to open virtual stores on gaming platforms such as Roblox, Fortnite, Sandbox and Zapeto, or on metaverse platforms such as Decentraland and Spatial. Dozens of fashion companies, especially many luxury brands, have already done so. This includes German brands such as Adidas, Falke and GERRY WEBER. In January 2023, the first metaverse fashion show, The Berlin Metaverse®, took place parallel to the annual Fashion Week in Berlin (see www.theberlinmetaverse.com). To date there is no legislation specifically governing metaverse platforms. The law set out below is applicable.  

Top

1 . What are the main intellectual property rights available to protect fashion products?

Top

1.1. Summary of IPRs

IPRDurationTime and modalities for grantPros and cons in the fashion sector
TrademarksNo time limits, but regular renewal is required every 10 years.

About 3 months.

Applications are lodged with the German Patent and Trademark Office.

Distinctiveness is required but there is no requirement regarding availability.

Pros: 

  • Broad protection for distinctive signs.
  • No time limits.

Con: the scope of protection can be narrow due to the high number of registered trademarks.

Design

Up to 25 years.

Unregistered EU designs: 3 years from initial publication.

About 3 months.

Applications are lodged with the German Patent and Trademark Office.

Novelty is required.

 

Pro: quick.

Con: no examination before court proceedings.

Trade secretsNo time limits.

Automatic protection. 

Reasonable documentation is required.

 

Pro: “free” protection of the information.

Con: difficult to enforce — questions of evidence.

Domain namesNo time limits, but regular renewal is required.

Purchase from, and registration with, any domain provider.

 

Pro: cheap. 

Con: protection depends on current use.

PatentsUp to 20 years.

The process can take up to 5 years.

Applications are lodged with the German Patent and Trademark Office.

Novelty is required.

 

Pro: strong, enforceable protection.

Con: long duration of the application process and high costs.

Utility modelsUp to 10 years.Filing with the German Patent and Trademark Office. 

Pro: quick.

Con: no examination before court proceedings.

Copyright70 years after death of the author.

Documentation of work and first publication. 

Automatic protection.

 

Pro: no extra costs.

Con: high level of originality required.

Top

1.2. Trademarks and non-traditional trademarks

Non-traditional trademarks. These can be registered in Germany if they comply with the general rules for trademark protection, especially sections 3 and 8 of the German Trademark Act (MarkenG), which state that any sign has to be distinctive and must not be kept free for third parties.

Colour marks. Colour marks can be granted protection if they have a distinctive character in relation to the claimed goods and services. They are usually registered by achieving a secondary meaning (Verkehrsgeltung). When applying for a single colour mark, an internationally recognised identification code must be indicated (ECJ C-104/01). However, colour mark registration often must come second to the public interest of keeping a colour free for use due to the small number of colours actually available. As a result, colour marks do not currently play a big role in fashion industry — companies do not attempt to register them often. This may change with the arrival of “quiet luxury,” concentrating more on classic and iconic aspects of the products rather than gimmicks or the use of logos. 

Shape marks. Problems arise if a shape mark is based solely on the shape of the product. In this case, the shape can only be protected under trademark law if consumers perceive the product-dependent shape mark to be an indication of origin, which means it should distinguish the goods from others in the industry (ECJ, C-136/02). Trademark protection cannot be granted for anything that goes beyond the origin of the product, for example, aesthetic features of the product. 

Personal names. In the fashion industry, the use of names as trademarks is quite popular. Basically, they are distinctive and registrable. The use of identical names as pure model designations in addition to any other trademark could lead to trademark infringement if the model designation could be considered to be a second trademark and not just a descriptive designation (cf. Federal Court, I ZR 195/17 “SAM”).

Pattern marks. Pattern marks are registrable provided they are distinctive. Examples of patterns accepted by the German Patent and Trademark Office include international registration 580 546, in relation to a  Christian Dior pattern, and German trademark 2 091 389, in relation to a Louis Vuitton Malletier pattern.

Position marks. In the fashion industry position marks are quite popular, such as the famous red sole of Christian Louboutin shoes. Their registration, however, requires that the position is not usual for the specific product category so that it may be considered a sign of the product’s origin. A recently registered known example is Veja Fair Trade S.A.R.L. – DE 30 2022 106 687, in relation to the v-shape pattern on the side of Veja sneakers.

Certification marks. Certification marks indicate that the goods or services bearing the mark have certain characteristics certified by an independent body. Therefore, only a person who is not the producer of the goods may be the proprietor of a certification mark. The certified product characteristics and conditions of use, as well as the testing and monitoring procedures must be laid down in a statute. The German Patent and Trademark Office allows the certification character to be taken from the trademark itself, although this is not reflected in the corresponding EU legislation (Directive (EU) 2015/2436 of the European Parliament and of the Council of 16 December 2015 to approximate the laws of the Member States relating to trademarks).

Just a few certification marks have been registered in Germany so far, for example, the logo of Gruener Knopf (No. 30 2019 111 304). 

Top

1.3. Design as an alternative or addition to TM registration

The German design register mainly shows designs for shoes, bags, single pieces of clothing or patterns. 3D forms are often not registerable as trademarks and do not clear the hurdles for copyright protection. For such shapes, design protection is the right tool to use. However, design protection requires novelty, which means that registration needs to be requested no later than 12 months after the first disclosure (section 6, German Design Act). In addition, any design needs individual character to differ from pre-existing designs on the market. As a design is not examined before registration, the German register contains quite a number of designs that may not qualify for design protection because they lack novelty. 

If the design is not intended to last for more than two or three seasons, protection as an unregistered Community design may be sufficient (Article 11, Community Design Regulation). It requires detailed documentation of the first publication. This is especially attractive for seasonal fashion products, or Modeneuheit (New Fashion).

Registered design protection lasts for a maximum of 25 years and must be renewed every five years. Unregistered designs are protected for three years from first publication. 

Top

1.4. Copyright as an alternative or addition to TM registration

The hurdle that must be overcome when seeking copyright protection for fashion items under section 2 of the German Copyright Act (UrhG) is still quite high because any piece of clothing or bag must possess the required level of originality (which must not be indicated by the product’s purpose or use). German courts still tend not to accept that fashion pieces are sufficiently original and instead consider whether they are protected as unregistered designs or under unfair competition law.

Under section 2 of the UrhG, protected works in the artistic domain include, in particular, artistic works including works of applied art and drafts of such works, photographic works such as works produced by processes similar to photography, and illustrations of a scientific or technical nature, such as drawings, plans, maps, sketches, tables and three-dimensional representations. This can include the protection of garments, drawings or patterns.

Recently, the Regional Court in Cologne (case reference 14 O 41/229) granted copyright protection for two models of Birkenstock sandals.

The court argued that, given the broad and diverse range of existing and earlier sandal models, the creative process involved in the creation of the sandals was of particular importance. The court was of the opinion that the designer experimented with materials and design elements and combined them to create a particular character, regardless of the fact that parts of the design elements were already known.

Copyright expires 70 years after the author’s/creator’s death (section 64, UrhG).

Top

1.5. Any other pertinent IP rights

Patents. Patent protection in the fashion industry can be relevant for technical features such as zips, knitting processes or adhesive or insulating solutions (especially for sports clothing). Considering the popularity of intelligent fashion containing heaters or pulse meters, demand for patents may increase in this area. Examples of patents in the fashion industry are Fitbit Inc’s patent for incorporating the technology of “Backfilling of geolocation-based exercise routes” into their smart watches (German Patent 60 2017 021 954) or Osram GmbH's patent for textile cable fabric (German Patent 10 2020 201 871).

Unfair competition law. If no exclusive IPR is enforceable, the German and EU regulations on unfair competition may provide protection for pieces that enjoy “competitive originality” if an avoidable deception regarding origin is created by the imitation.

Top

2 . Beyond intellectual property: what contractual arrangements are useful in manufacturing, distributing and advertising fashion products?

Top

2.1. Manufacturing fashion products

Licence agreements 

Like in other jurisdictions, licence agreements allow rights holders (mainly trademark owners in the fashion industry) to grant third parties the right to manufacture and distribute products in a specifically agreed range and geographically defined area. In most cases, the right holder has the obligation to maintain the right and to defend it against infringers. In the fashion industry, licences are often granted for the manufacture of accessories or for co-branding campaigns. In Germany, there are no formal requirements for licence agreements but fixing licence conditions in writing is highly recommended for evidence purposes in the event of legal disputes. German law does not require any registration of a trademark licence agreements but provides for the option of registration (section 30(6), German Trademark Act). 

Non-disclosure Agreements (NDAs)

In 2014/2015, Nike sued three former designers for violation of trade secrets after they moved to Adidas. Because of this, the German fashion industry is aware of the importance of NDAs or corresponding regulations in employment contracts (Briske/Schmoll/Kuck in Schmoll/Boeminghaus, ModeR, F para. 168). The German Gesetz zum Schutz von Geschäftsgeheimnissen (GeschGehG) implemented Directive (EU) 2016/943 of the European Parliament and of the Council on the protection of undisclosed know-how and business information (trade secrets) against their unlawful acquisition, use and disclosure of 8 June 2016, which provides guidelines on the definition of a trade secret and on how it can be protected.

Subcontract agreements with suppliers/in-house manufacturing

Subcontract agreements are mainly required in case any third-party manufacturer produces and labels clothes or accessories under the control of the core licensee of a rights holder. Depending on the specific relationship between the licensee and third-party manufacturer, there may be no clear need for a sub-licence agreement because in some cases the rights may already be exhausted. Nevertheless, it is recommended that the scope of the rights of any direct or indirect manufacturer be fixed.

Top

2.2. Distributing fashion products

Agency agreement

In Germany, there are no specific legal provisions regarding agency agreements. Therefore, German civil law applies, in particular, sections 84 to 92c of the German Commercial Code (Handelsgesetzbuch). Section 89b of the German Commercial Code states that a commercial agent will receive a reasonable indemnity for the relevant business that has been brought to the principal after the termination of the contract, restricted to one year’s commission. The advantages deriving from business relations established by the agent prior to termination of the agreement as well as equity must be taken into account when calculating the indemnity. The claim must be raised within one year after termination of the agreement: section 89(4), German Commercial Code. The agent’s right to indemnity is compulsory and cannot be contractually excluded or reduced.

Selective distribution online in high-end fashion and trademark protection

Due to the harmonisation of the law of the EU Member States, EU regulation 330/2010 regarding selective distribution systems and the corresponding case law of the ECJ apply in Germany. Selective distribution is a tool used by the high-end fashion industry, mainly to avoid distribution of their high-quality products through regular e-commerce platforms and to safeguard distribution channels that are appropriate for high-quality fashion. To set up a lawful system, manufacturers must specify certain criteria, especially regarding quality standards of sales shops and platforms which must, however, be reasonable and executable to avoid unjustifiable differential treatment.

Co-branding and co-marketing

Co-branding means that two different brands co-operate and work together to create a temporary collection. The goal of such co-branding campaigns is to establish broader prominence of products in their existing field as well as through different distribution channels. Examples of this are the current co-branding line of German fashion label LaLa Berlin and the Danish shoe designer Copenhagen, as well as the long-lasting collaboration between Stella McCartney and Adidas.

To safeguard each party's interests and rights, any co-branding or co-marketing agreement should clarify the aspects of brand recognition, positioning, sharing of revenues and the duration of the campaign, and of course the question of ownership of potential newly developed trademarks, designs or copyrights.

Franchising and alternative sales model agreements

Franchising, like most other alternative sales models, is not regulated by specific law in Germany. Therefore, general German civil law applies. 

Besides franchising, modern and popular forms of vertical distribution are shop-in-shop concepts, which big department stores, in particular, offer to brands. Often, the operator of the department store acts as an authorised dealer paying fees for the use of the trademark and the marketing concept of the brand. As there is no legal definition of such concepts, contracts can be freely negotiated to regulate issues regarding employees, training etc.

Pop-up stores have become popular in Germany and function primarily as a marketing tool, with a temporary rental contract forming the legal basis for the arrangement when the store is opened by the brand itself. 

Consignment store contracts are commonly used, particularly in the shoe industry.

Top

2.3. Advertising fashion products

Employing fashion models 

When working with fashion models, specific awareness of their personal rights is required. To enable the fashion company to use any photograph or video, the model must release the imagery for specific purposes. It is highly recommended, especially for online use, to make sure that the rights to use the pictures/videos include any online features and are not time limited. Otherwise, the fashion company would have to delete pictures from social media after a certain period of time, which is often almost impossible.

Social media, influencers and brand ambassadors/celebrities

In the case of advertising by influencers or other brand ambassadors, commercial and editorial content must be clearly separated. If commercial content is not properly labelled as such, it may be considered surreptitious advertising under section 5a(4) of the Act against Unfair Competition (UWG). This is also essential for advertising companies, which can be held liable alongside the influencer. In addition, advertisements must not be misleading, untrue or grossly exaggerated.

Advertising standards, relevant authorities and advertising practice

The German self-regulatory system has two advertising standard organisations: 

•     Deutscher Werberat (German Advertising Standards Council) provides a mechanism for conflict settlement between the public and commercial advertisers. In addition, it draws up voluntary codes of conduct for advertising, particularly with regard to sensitive areas.

•     Zentrale zur Bekämpfung unlauteren Wettbewerbs (German association founded to combat unfair competition) is a self-regulatory institution founded in 1912 for the entire business community with the task of protecting competition in the interest of the general public. It is, therefore, subject only to the competition laws currently in force. Neutrality and independence are the foundations of its activities and of the role its members think it should play.

Top

3 . What regulations govern online marketing and how are the rules enforced?

The online sale and e-commerce fields are constantly growing, and this growth was exacerbated by the COVID-19 pandemic. The main challenge in online marketing is to establish a consumer friendly and legally water-tight system that protects consumers as well as the fashion industry and online retailers.

Top

3.1. Consumer protection regulations

When engaging in distance selling and e-commerce, companies are subject to a number of information obligations, which need to be communicated to the consumer in a clear and comprehensible way. Most of the obligations are laid down in the German Civil Code (BGB) and the Introductory Act to the Civil Code (EGBGB). In addition, consideration must be given to EU Consumer Rights Directive 2011/83/EU as well as Regulation (EU) 2016/679 of the European Parliament and of the Council on the protection of natural persons with regard to the processing of personal data and on the free movement of such data of 27 April 2016, repealing Directive 95/46/EC (General Data Protection Regulation).

Top

3.2. Physical store and online store layout

Physical stores can be protected as company designations without name function according to section 5(2) of the GermanTrademark Act but this protection requires secondary meaning. Another option is the protection as works of applied arts under section 2(4) of the Copyright Act.

Following a request for preliminary ruling of the German Federal Patent Court, the Third Chamber of the Court decided that the layout of a retail store may be registered as a trademark provided that the sign is capable of distinguishing the services of the applicant from those of other undertakings (ECJ - C-421/13).

Nevertheless, the German Federal Patent Court did not allow the layout of the Apple flagship store to be registered as a trademark.

Independent of the kind of IP right chosen, enforcing the rights for the layout of a store will be difficult because competitors will most probably not reproduce the whole layout but only parts. Another hurdle is the question of whether consumers consider the layout to be a special mark or only recognise the technical functions and aesthetic design. 

Top

4 . What are the most relevant unfair competition rules for fashion businesses and how do the courts interpret and enforce these rules?

The UWG protects competitors, the general public and consumers from unfair competition. The most relevant sections for the fashion industry are:

•     Protection against imitation: section 4(3), UWG. The offering of counterfeit products by competitors is unlawful if the offering party causes avoidable deception of the customers as to the commercial origin of the goods or services, unreasonably exploits or impairs the assessment of the counterfeit goods or services, or has dishonestly obtained the knowledge necessary for the counterfeiting.

•     Misleading commercial practices: section 5(2), UWG. This provision prohibits the marketing of goods or services in a way that creates a likelihood of confusion with other goods or services.

•     Comparative advertising: section 6(2) No.3, UWG. This provision includes a prohibition of comparative advertising if such advertising leads to a likelihood of confusion between the advertiser and competitors, or between the goods or services offered by them.

The most common measures used by German jurisdiction are:

•     Injunction: section 12, UWG, sections 935 and following, German Code of Civil Procedure. Courts can grant preliminary injunctions to quickly eliminate unfair competition violations. The aim is to avoid possible reputational damage, which could be detrimental to the company, and to avoid any misleading of consumers.

•     Withdrawal of the imitating products from the market. Pursuant to section 8(1) of the UWG, the infringer can be ordered to remedy the issue in question (that is, withdraw the products from the market) or cease and desist from the breach of competition. Note that only competitors, certain associations and the Chambers of Industry and Commerce can assert such a claim. Consumers, however, are not entitled to make this claim.

•     Compensation for damages. According to section 9 of the UWG, a person who commits an unfair commercial act is liable for damages. The infringer must have acted intentionally or negligently. The specific amount to be claimed for damages is calculated based on sections 249 and 252 of the German Civil Code. 

Top

5 . Is there any regulation specifically addressing sustainability or ESG (Environmental, Social and Governance) in the fashion industry?

The fashion industry is one of the leading industries in the development of socially and environmentally sustainable products. One tool used to indicate that fashion has been manufactured under controlled and fair conditions is the certification trademark.

At the EU level, Council Regulation (EC) No 834/2007 of 28 June 2007 on organic production and labelling of organic products, repealing Regulation (EEC) No 2092/91, clarifies the use of terms such as “bio”, “eco” or “vegan”, which can only be used if the products are produced in accordance with this Regulation. 

At a national German level, section 5 of the UWG and the general prohibition of misleading advertising must be considered when using such terms, labels or slogans. 

The number of ecological labels/certificates for the fashion industry has grown in recent years to over 20. There is no specific ISO certification, but German fashion designers refer to ISO 26000:2010 “Guidance on social responsibility”. One of the most well-known labels is the OEKO-TEX® STANDARD 100. It represents customer confidence and high product safety.

Top

6 . Customs monitoring: do any special import and export rules apply to fashion products?

Like all other product categories, the import of textiles from some non-EU states may require special import permits, which need to be shown to the competent customs office upon entry into Germany. Currently, restrictions only apply in relation to textiles imported from the Democratic People's Republic of Korea (North Korea).

In addition, customs may seize goods moved into Germany or moved out of Germany if it is obvious that intellectual property rights held by an entity are being violated. To allow customs to identify counterfeit goods, all relevant information and IP rights must be filed with customs and a renewal request must be submitted once a year. The system established for that purpose is ZGR-online, which stands for Zentrales Datenbanksystem zum Schutz von Geistigen Eigentums Rechten online (centralised online accessible database for the protection of intellectual property rights) (see www.zoll-portal.de/).

Top

7 . Frequently Asked Questions (FAQs)

Can I use the term “Made in Germany”?

EU law relevant to this issue is Directive 2005/29/EC of the European Parliament and of the Council of 11 May 2005 concerning unfair business-to-consumer commercial practices in the internal market and amending Council Directive 84/450/EEC, Directives 97/7/EC, 98/27/EC and 2002/65/EC of the European Parliament and of the Council and Regulation (EC) No 2006/2004 of the European Parliament and of the Council (Unfair Commercial Practices Directive).

Using the term “Made in Germany” is only allowed if the central manufacturing process takes place in Germany. The development of the design occurring in and/or the choice of material being from Germany is not sufficient to obtain the label.

Is it worth registering the design pieces of a new fashion or shoe collection?

Yes, if it is an iconic piece that will last for more than three years. Otherwise, the protection of an unregistered Community design or maybe Copyright Protection may be sufficient. Both would require detailed documentation of the first publication.

EXPERT ANALYSIS

Chapters

Australia

Derek Baigent
Ellen Baker
Jennifer Wyndham-Wheeler
Shannon Fati

Belgium

Christine De Keersmaeker
Katrijn Huon

Brazil

Flavia M. Murad-Schaal
Isadora Schumacher Jeong

Finland

Hilma-Karoliina Rozell

France

Floriane Codevelle
Karina Dimidjian-Lecomte

Greece

Alexandra Varla
Maria G. Sinanidou

Hong Kong

Hank Leung
Harry Wong

India

Radha Khera
Ashwin Julka

Ireland

Patricia McGovern

Italy

Alice Fratti
Beatrice Cazzanelli
Carlo Colaci
Francesca Ferrero

Mexico

Erik Pérez Caballero
Luis Pavel García Costinica

Nigeria

Annie Oti

Singapore

Lorraine Tay
Cheryl Lim

Spain

David Fuentes Lahoz
José Miguel Lissén Arbeloa

Taiwan

Cathy Wang
Huan-Yi Lin
Matthew Lee

Thailand

Chanya Veawab
Michelle Ray-Jones

United Kingdom

Gary Assim

United States

Megan Bannigan

Vietnam

Chi Lan Dang
Diep Thi Bich Le
Hien Thi Thu Vu
Tu Ngoc Trinh

Powered by SimSage

Popular Articles

Latest Articles

Irish government confirms deferral of referendum on Unified Patent Court

12h

Pérez-Llorca enters Mexico through landmark merger with 100-lawyer González Calvillo

14h

Gibson Dunn unveils hire of Linklaters’ former leveraged finance co-head in London

16h

Orrick hires Kramer Levin’s life sciences head in New York

19h

McDermott hires two senior Shearman tax specialists in Paris

1d