Fighting product piracy at trade fairs

By Dr Magnus Hirsch & Christoph Mayerhöffer

Posted: 11th December 2015 10:00

Trade fairs are irreplaceable for business.  It’s the place to maintain long-standing business relationships, make promising contacts and collect new ideas and inspiration.  But not all discoveries are pleasant as not all competitors rely on fair competition. And the corrupt gain as is well known through counterfeiting.  In particular if an unscrupulous competitor displays imitations, perhaps even in the same place where the company's goods are on display the fair might turn into a bitter experience. 
 
The German legal system provides effective tools to fight product piracy at trade fairs.  If manufactures and their attorneys initiate concentrated action the preliminary injunction has proven as such effective measure for combatting plagiarists.  But the plagiarists are also learning.  Increasingly, one now comes across foreign imitators, who place great value on wanting to exhibit in German fairs, however, claiming that they would have no interest in the German market.  If the plagiarists act cleverly, then in the worst case solely the presentation of the goods can be documented.  Is this enough for a successful proceeding against such an action, however? We provide an answer to this question.
 
Deception of end consumer?
 
It may surprise some, but whoever exhibits counterfeit products at an exhibition in Germany accessible only to a specialist audience does not necessarily also offer these products on the German market, in the view of different German judges.  A manufacturer of well-known cookie bars had to find this out painfully at the end of last year(Federal Court of Justice GRUR 2015, 603 – Keksstange (cookie bars)).
 
One plagiarist based in Turkey maintained an exhibition stand at theInternational Sweets and Biscuits Fair in Cologne.  It exhibited cookie bars there, which were nearly identical to the well known original cookie bars, but packaged differently and labelled with a different word mark.  The manufacturer of the originals, however, could only substantiate the presentation of the cookie bars in the package.  The manufacturer had no provable knowledge, however, that the plagiarist was also aiming at the German market with its goods.  The plagiarist, however, defended itself that it had never intended to distribute the products in Germany and had aimed solely at the international specialist audience in attendance with its presentation.  Germany’s highest judges therefore denied both, an offering as well as advertising, distribution or other placing on the market of the goods with respect to domestic consumers, since a corresponding intention could not necessarily be deduced solely from the presentation. 
 
Deception of specialist groups?
 
Whoever exhibits a counterfeit product at a specialist exhibition, advertises this, however, at least regularly to the international specialist audience attending the exhibition.  This constitutes a domestic use of the objectionable trademark or product form(Federal Court of Justice GRUR 2010, 1103 – Pralinenform (chocolate mold) II; Federal Court of Justice GRUR 2015, 603 – Keksstangen (cookie bars); Frankfurt Higher Regional Court GRUR 2015, 903 – Tuppex), whereby an infringement and thus an injunctive relief is as a rule given to the benefit of the manufacturer of the original products.  This claim does not concern the offering, distribution, or placing on the market, but in most businesses it may be easy to get over, if indeed not the "offering" but the compulsory upstream advertising is prohibited to a plagiarist. 
 
This conclusion has an important snag, however.  The criterion for likelihood of confusion or deception is not the general public, but rather solely the expert exhibition visitor.  And the latter cannot be as easily deceived as an end consumer.  It follows from this that the requirements of the existence of injury are noticeably higher.  But this is precisely where the above-outlined cookie bar case failed.  The Federal Court of Justice accepted an advertising in respect to the specialist audience, however, this group was not deemed to make a misconception due to the different packaging (Federal Court of Justice GRUR 2015, 603 – Keksstangen (cookie bars) para. 36).
 
Collect, collect, collect
 
How close success and failure are to each other can be learned as well from another case, named the "Tuppex" decision.
 
The plagiarist also based in Turkey maintained an exhibition stand at the international Frankfurt specialist exhibition "Ambiente".  There it exhibited household containers under the mark "tuppex." As in the previous case, the manufacturer of the original "TUPPER" household containers could present no direct proof that the plagiarist aims at the German market with its labelled products.  It was able, however, to submit on behalf of a preliminary injunction an English language catalogue on display at the exhibition stand as well as the self-presentation of the exhibition organizer, from which it results that the goods of the "Ambiente" are also offered for purchase to the specialist audience. 
 
These indications were enough for Frankfurt Higher Regional Court to accept that with the advertisement an invitation is made at the same time to purchase the products in Germany.  The Higher Regional Court accepted both a violation through "advertising" as well as through "offering." The manufacturer won. 
 
Practical tip:
 
The burden of demonstration and proof of the individual infringing acts lies with the manufacturer of the originals. 
  Magnus Hirsch ,based in Frankfurt, Magnus Hirsch advises and represents national and international clients in all IP related matters.  He is a certified IP specialist and a frequently recommended IP lawyer in Germany and was recently selected for Germany’s Best IP Lawyers 2014.  He is member of the INTA, of the PTMG (Pharmaceutical Trademarks Group) and of the GRUR (Intellectual Property Rights and Copyrights Association).  He is Chief Editor of the global IP Newsletter of TerraLex and its global Chair IP.  He has joined SKW in early 2007 and practiced as a lawyer and partner at Baker & McKenzie's Frankfurt and Hong Kong offices from 2001 to 2007.  After his studies at the University of Passau, Mr. Hirsch has practiced with the law firm of Lovells in Frankfurt and Hamburg from 1997 to 2001. 
 
Magnus can be contacted on +49 69 63 00 01-46  or by email at m.hirsch@skwschwarz.de

Christoph Mayerhöffer also based in Frankfurt, Christoph Mayerhöffer advises German and international clients on a wide variety of matters which fall within the area of trademarks, designs, copyrights, patents and unfair competition, including commercials and sales promotion measures – in both preventative and contentious situations.  His specialization comprises enforcing clients’ rights against counterfeiters, parallel importers and domain name pirates, both through court proceedings, as well as international dispute systems.  He is member of the GRUR (Intellectual Property Rights and Copyrights Association) and Vice-President of YPLG within PLG International lawyers.  He has joined SKW in late 2010.

Christoph can be contacted on +49 69 63 00 01-21 or by email at c.mayerhoeffer@skwschwarz.de

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