Dec 2021

Germany

Introduction

Several years ago, Oprah Winfrey asked the internationally famous fashion designer Ralph Lauren how he manages to re-invent himself in these short terms of fashion seasons. He answered bluntly: "You copy … Forty-five years of copying, that’s why I’m here." (Farkas, Nachahmungsschutz und Schutzrechtskumulation am Beispiel von Modekreationen, Baden-Baden 2016, p. 23.)

So, it seems that copying is the way to be successful in fashion industry. However, that does not mean that fashion designers copy their competitors but instead may return to old designs and styles, sometimes from several centuries ago. If this is the case, these old designs are no longer protected (if they were at all). However, in many cases designers go back only a few fashion seasons. This is the reason why Intellectual Property Rights are important to safeguard fashion designers' interests.

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

European Union regulations and German law provide a variety of tools to protect the creative process and design results related to fashion. Designs, trademarks and copyrights are certainly the most relevant IPR. The following sections outline these rights as well as the law relating to patents, trade secrets and domain names.

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1.1. Trademarks and non-traditional trademarks

In general, according to § 3 Section 1 of the German Trademark Act (MarkenG), any word and/or device, or combinations thereof, being capable of distinguishing the goods of one company from those of other companies, can be registered as a trademark.

Personal names as trademarks. 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 may be a trademark infringement if the model designation can be considered as a second trademark and not only as a descriptive designation (cf. Federal Court, I ZR 195/17 "SAM").

Black/white mark. The application for a trademark in black and white leaves it open as to which colours the mark should appear in and does not limit the registration to specific colours or combinations of colours.

It depends on the individual case whether it is possible to challenge a coloured trade mark on the basis of a black and white trademark. In most cases, however, a black and white trademark will enjoy protection vis-à-vis a trademark in colour and use of the mark in colour will be considered as a right-preserving use.

Pattern marks. Pattern marks are registrable provided they are distinctive. The following are examples of patterns accepted by the German Patent and Trademark Office for the following trademarks:

  • International registration trademark 580 546  which is a pattern of Christian Dior.

  • German trademark 30 2012 022 812 which is the pattern of the sole of Birkenstock's sandals; non-use cancellation proceeding pending, June 2021.

Position marks. In the fashion industry position marks such as the famous red sole of Christian Louboutin (ECJ - C-163/17) are quite popular. Their registration, however, requires that the position is not usual for the specific product category so that it may be considered as a sign of origin. Another famous example of a position mark is Lloyd Shoes' red stripe on the heel of their shoes (EUTM 002 308 013).

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, conditions of use as well as the testing and monitoring procedures must be laid down in a statute. The German Office requires that the certification character can be taken from the trademark itself although this requirement cannot be taken from 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 trade marks).

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

 

Unregistered trademarks. Unregistered trademarks only enjoy protection if they have acquired a secondary meaning (Verkehrsgeltung) or are well-known or famous through use § 4 No. 2 and 3 German Trademark Act.

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

Colour marks. In general, like all other types of trademarks, colour marks can be granted protection if they have a distinctive character regarding the claimed goods and services. They are usually registered by achieving a secondary meaning (Verkehrsgeltung) due to the high requirements of the German Trademark Act regarding distinctive character. For the application of a single colour mark, an internationally recognised identification code must be indicated (ECJ C-104/01). However, an interest in registering a colour in the field of fashion creations often has to come second to the public interest in keeping a colour free for use due to the small number of colours actually available.

Shape marks.  A shape mark can offer additional protection. Problems arise once a shape mark is solely based on the form of the product. In this case, the shape can only be protected under trademark law if the relevant public perceives the product-dependent shape mark as an indication of origin (ECJ, C-136/02). Protection that goes beyond the origin, for example of aesthetic features, cannot be granted under trademark law but can be under copyright and design law (Farkas, Nachahmungsschutz und Schutzrechtskumulation am Beispiel von Modekreationen, Baden-Baden 2016, p. 79).

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1.2. Design as an alternative or addition to TM registration

The German design register (https://www.dpma.de/designs/recherche/index.html) mainly shows designs for shoes, bags, single pieces of clothes or patterns. Often enough 3D forms are not registerable as trademarks and do not clear the hurdle of copyright protection. For such shapes design protection is the right tool. However, design protection requires novelty which means that registration needs to be requested no later than 12 months after the first disclosure (Section 6 of the German Design Act). In addition, any design needs individual character which differs from pre-existing designs on the market.

If the design is not intended to last for more than two or three seasons, protection as an unregistered Community design may be sufficient (Art. 11 CDR). It requires detailed documentation of the first publication. This is especially attractive for seasonal fashion products. The German translation of this is "Modeneuheit".

Some examples of registered designs are German Design M9603711-0002 of a shoe upper by Reebok Int Ltd and German Design M9711681-0004 of a trouser pocket by Mustang - Bekleidungswerke GmbH + Co. KG.

Each design (registered or unregistered) requires novelty and individuality to obtain protection. Drawings, photographs or three-dimensional models are allowed to be filed for reproduction.

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 the first publication.

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1.3. Copyright as an alternative or addition to TM registration

The hurdle of obtaining copyright protection (§ 2 German Copyright Act (UrhG)) for fashion is still quite high because any piece of clothing or any bag has to reach the required level of originality (which must not be indicated by the purpose of use). German Courts still tend not to accept this originality for fashion pieces and instead refer to the protection of a non-registered design or unfair competition law.

According to § 2 UrhG, protected works in the artistic domain include, in particular, artistic works including works of applied art and drafts of such works, photographic works including 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. All this includes protection of garments, drawings or patterns.

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

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1.4. 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 may increase the number of patents in this area. One example is Fitbit Inc's patent for incorporating the technology of "Backfilling of geolocation-based exercise routes" into their smartwatches (German Patent 60 2017 021 954) or Osram GmbH's patent for textile cable fabric (German Patent 10 2020 201 871).

In Germany, technical inventions can also be protected by utility models. Contrary to patents, utility models are unexamined IP rights. There is no examination as to novelty, inventive step and industrial application. For this reason, utility model protection can be obtained more easily, faster and at lower costs than patent protection. They do have a shorter duration of ten years whereas patents expire after a period of 20 years. Utility models give the same rights as patents: the exclusive right to use, produce and market the invention and the option of prohibiting any third person from using the same technical idea.

Unfair Competition Law. If no exclusive IPR is enforceable, the German and EU regulations on unfair competition may provide protection for pieces which enjoy competitive originality if an avoidable deception of origin is created by the imitation.

Made in Germany. 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 and/or the choice of material is not sufficient to obtain the label.

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1.5. Summary of additional IPRs

IPR

Duration

Time and modalities for grant

Pros and cons in the fashion sector

Patents

Max. 20 years (no extension possible).

Filing with the German Patent and Trademark Office.

Granting takes about 2 to 3 years from the filing date (similar to Italy).

 

Pro: strong exclusivity.

 

Con: high costs and high requirements (novelty and inventive step).

 

Utility models

Max. 10 years.

Filing with the German Patent and Trademark Office.

Granting takes about six months or less. 

Pro: fast protection, cheaper than a patent.

Con: no examination on novelty and inventive steps and thus potentially weak.

 

Trade Secrets

Unlimited, unless disclosed.

Automatic protection; reasonable documentation required.

 

Pro: “free” protection of the information.

 

Domain names

No time limits, but regular renewal required.

Purchase and registration with any domain provider.

Pro: cheap.

Con: protection depends on current use.

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

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2.1. Manufacturing fashion products

License agreements and Non-Disclosure Agreements (NDAs). Like in other jurisdictions, license 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 rights holder has the obligation to maintain the right and to defend it against infringers. In the fashion industry, licenses are often granted for the manufacture of accessories or for co-branding campaigns. In Germany, there are no formal requirements for license agreements but fixing license conditions in writing are highly recommended for evidence purposes in the event of legal disputes. Contrary to jurisdictions such as Russia for example, German law does not require any registration of a trademark license agreements but gives the option § 30 Sec. 6 of the German Trademark Act to register such license.

In 2014/2015, Nike sued three former designers after they moved to Adidas, for the violation of trade secrets. Because of this, the German fashion industry is aware of the importance of Non-Disclosure Agreements 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 the 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 / in-house manufacturing. Subcontract agreements are mainly required in case any third 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-license agreement because in some cases the rights may already be exhausted. Nevertheless it is recommended to fix the scope of the rights of any direct or indirect manufacturer.

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2.2. Distributing fashion products

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, as described in the Italian chapter, also apply in Germany. Selective distribution is a tool used by the high-end fashion industry to avoid distribution of their high quality products through regular e-commerce platforms and to safeguard the distribution channels that fit high quality fashion. To set up a lawful system, manufacturers have to specify criteria, particularly on quality standards, of the sales shops and platforms which, however, have to be reasonable and executable to avoid unjustifiable differences of 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 a broader prominence not only in the identical field of products but also through different distribution channels. An example of this is the different co-branding campaigns of the famous Italian mineral water San Pellegrino with Missoni, Bulgari and Vogue.

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.

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2.3. Advertising fashion products

Employing fashion models. Working with fashion models requires a specific awareness regarding their personal rights. To enable the fashion company to use any photograph or video, the model has to 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 is without a time limit. Otherwise, the fashion company would have to delete pictures from Instagram, etc. after a certain period of time which is often enough 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 § 5a Section 6 Act against Unfair Competition. This is also essential for advertising companies who 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. 
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3 . What regulations govern online marketing and how are the rules enforced?

The online sale and e-commerce fields are growing constantly, and this was exacerbated by the COVID 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.

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3.1. Consumer protection regulations

Distance selling and e-commerce include a number of information obligations for any company 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, the EU Consumer Rights Directive 2011/83/EU as well as the 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, and repealing Directive 95/46/EC (General Data Protection Regulation) have to be considered.

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3.2. Physical store and online store layout

Physical stores can be protected as company designations without name function according to § 5 Sec. 2 German Trademark Act (MarkenG) but this protection requires secondary meaning. Another option is the protection as works of applied arts under Copyright Law, § 2 Section 4 UrhG.

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 for registration 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 for trademark registration.

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 as a special mark or only recognize the technical functions and aesthetic design.

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

The German Act Against Unfair Competition (UWG) protects competitors, the general public and consumers from unfair competition. The most relevant sections for the fashion industry are:

  • Protection against imitation, § 4 Nr 3 UWG. According to Section 4 No. 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, unreasonably exploits or impairs the reputation of the counterfeit goods or services, or has dishonestly obtained the knowledge necessary for the counterfeiting.
  • Misleading commercial practices, § 5 Section 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, § 6 Section 2 Nr 3 UWG. § 6 Section 2 No. 3 UWG 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. § 12 Act against Unfair Competition, §§ 935 ff. German Code of Civil Procedure. Courts can grant preliminary injunctions to quickly eliminate unfair competition violations. The aim is to avoid possible reputational damages 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 Section 2 sent. 1 UWG, the infringer can be ordered to remedy the issue in question or cease and desist from the breach of competition. It should be noted that only competitors, certain associations and the Chambers of Industry and Commerce can assert such a claim. Consumers, however, are not entitled to this claim.
  • Compensation for damages. According to Section 9 UWG, a person who commits an unfair commercial act is liable for damages. The infringer must have acted intentionally or negligently. The calculation of the specific amount of the claim for damages is based on §§ 249, 252 German Civil Code (BGB).
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5 . Is there any regulation specifically addressing sustainability or ESG (Environmental, Social and Governance) in the fashion industry?

The fashion industry is certainly one of the leading industries in developing socially and environmentally sustainable products. One tool to show that fashion has been especially manufactured under controlled and fair conditions are certification trademarks such as the Grüner Knopf, which is the German state seal for sustainable textiles.

On EU level the Council Regulation (EC) No 834/2007 of 28 June 2007 on organic production and labelling of organic products and repealing Regulation (EEC) No 2092/91 clarifies the use of terms such as "bio", "eco" or "vegan" which may only be used in case the products are in line with this Regulation. On a national German level, § 5 of the Law against Unfair Competition (UWG) and the general prohibition of misleading advertising has to be considered when using such terms, labels or slogans.

Examples - all registered for clothing and shoes:

[INSERT IMAGE 10 HERE**]

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

Trademark, design and product piracy are obstacles to fair competition and the creation of new jobs. This applies particularly to a country like Germany which manufactures high-value and high-quality products.

It is, however, not only German companies which are faced with copies of their products, manufactured at substantially lower cost exploiting cheap labour, and usually in poorer quality, being sold at rock-bottom prices on the European market.

German and EU customs offer a monitoring service to avoid the import of such counterfeits and to safeguard fair competition.

The German Customs Administration’s online procedure ZGR-online for the application of industrial property rights (mainly trademarks and designs) was established in May 2009 (www.zgr-online.zoll.de). ZGR-online is a comprehensive data processing system to file customs applications to all German customs offices as well as to the customs authorities of other EU Member States if EU rights are concerned. The system allows applicants to amend their applications as well as to submit additional relevant information of the identification of goods infringing intellectual property rights, such as details of the products concerned or risk-analysis relevant information.

Ongoing digitisation and the implementation of the Onlinezugangsgesetz (Online Access Act) will make it even easier to use the ZGR-online tool. Since 31 May 2021 applications for the seizure of goods at the border can be filed fully electronically and without printed applications of the Zentralstelle Gewerblicher Rechtsschutz (Central Office for the Protection of Industrial Property) provided that you have established a special account.

In the case of a granted application, the customs office may only then order a seizure when the infringement is manifest. "Manifest" means that during clearance, it seems very likely that there was an infringement. However, for action pursuant to Regulation (EU) No 608/2013 a suspicion would be sufficient.

To manifest a seizure customs, authorities rely on the collaboration of the rights holder who has to provide information to identify any infringement. The consignee (usually the importer, exporter, holder or owner) and the applicant are notified of the seizure. If no objection is lodged against the seizure, the goods concerned are ruled to be forfeited. Should no legal remedies be taken, the forfeiture becomes legally binding two weeks after the service of notice, and the goods will be destroyed by the customs authorities.

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7 . Frequently Asked Questions

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EXPERT ANALYSIS

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