Dressing up as Pippi Longstocking is not unfair, either

In a case reported here, the right-holders of the work of Astrid Lindgren had sued a supermarket offering carnival costumes of the literary figure of Pippi Longstocking for infringement of copyright and unfair competition.  The alleged acts of infringement included distributing a prospectus with models being dressed with the costume.

According to the case-law, the utilization of work products of third parties is generally allowable but can be considered unfair if specific circumstances appear to justify this finding.

The action had been dismissed by the BGH insofar as copyright was concerned and had been remitted to the 2nd instance (OLG) to re-assess the claims based on competition law. The OLG found that the pictures with the models could be considered to be an imitation in the sense of § 4 Nr. 9 Buchst. a und b UWG but rejected these claims because no specific circumstances rendering the imitation unfair were recognizable.

The case went back to the BGH which confirmed the result but for different reasons. According to the BGH, the imitation of a character of a novel by transferring features having features of competitive individual character into other product classes as this is the case for carnival costumes is possible but must not be assessed based on low requirements ("keine geringen Anforderungen"). In the case at issue, the overlap between the features characterizing the literary figure of Pippi Longstocking and the design of the carnival costume is sufficiently small to exclude an imitation.

This applies to alleged imitations the character in the novel as such and is without prejudice to the claims based on unfair imitation of actual merchandizing products offered by the right-holder.

Damages for Unjustified Preliminary Order

The decision I ZR 249/12 of the BGH deals with the claim to damages of a party having observed a preliminary order which finally turned out to be unjustified.

The Hamburg district court had issued a preliminary injunction ordering to stop selling trousers allegedly infringing rights in designer jeans called "Nero". The injunction was issued on June 9, 2006, a simple copy of the injunction was sent to the defendant on June 12, 2006 by the plaintiff and the defendant stopped producing the trousers on June 20, 2006. A formal notification took place on July 6, 2006.

The preliminary injunction was initially confirmed in the procedure on the merits but then withdrawn by the alleged right-holder in the course of the oral proceedings on March 14, 2007. The final decision on non-infringement was issued on December 19, 2007.

The dispute went on for several years and through various instances including a decision of the BGH in 2009. The defendant never resumed the production of his version of the "Nero" jeans but requested roughly 0.5 Million Euros consequential damages for the lost sales between June 2006 and December 2007.

The BGH ruled that the claim to damages is to be limited to the period in which the preliminary injunction was in legal force, i.e. from July 6, 2006 to March 14, 2007 and that the fact that the order was observed before or after this period was not a compulsory consequence of the preliminary order such that the claim to damages for the lost sales is limited to the above period.

Is it unfair to account for compatibility with design characteristics of copetitors?

The question of whether or not the adaption of design features, in order to integrate a product into a series or a system developed and designed by a third party, offends the principle of fair competition has been under heavy dispute in the past.

While the BGH had ruled in the decision "Klemmbausteine II" (Urt. v. 7.5.1992 - I ZR 163/90, GRUR 1992, 619 = WRP 1992, 642)that such an integration into a series of a third party (in the case at issue, the products were plastic bricks matching Lego breaks constitutes an unfair profiting of the achievements of that third party.

However, this rule was put into perspective with the subsequent decision “Klemmbausteine III” (I ZR 30/02) and "Modulgerüst" according to which this subsequent protection against inserttion into a series of a third party should be at least limited in time. According to the Senate, the term of protection should be based on the term of protection of similar industrial property rights such as patents or registered designs. However, a legitimate interest of the author of a series of product to be protected against insertions into the series was recognized.

The two recent decisions “Regalsystem” (I ZR 136/11), and "Einkaufswagen III" constitute surprising turning point in this line of decisions. According to the decision “Einkaufswagen III”, the fact that an interest of customers in optically compatible products in view of the need of replacement or enlargement exists is no indication for an inappropriate exploitation of the valuation of the imitated product, but rather an indication to the contrary. If a need for replacement using optically compatible products exists of the side of the customers, an inappropriate exploitation of the valuation of the counterfeit product may be excluded even if the aesthetic design features are adopted almost identically.

One decisive factor is the question whether or not the salability of a product with differing design features would be reduced as compared to the product with imitated design features (BGH “Regalsystem” I ZR 136/11).

Originality not Required

The latest part (I ZR 21/11) in the recent series of interesting decisions on design protection under German unfair competition (see e.g. (here) law relates to a toy set with a box having a glass bottom, a bag of sand and some tools to create patterns in the sand spread on the bottom.

The set had been protected by a utility model, which, however had expired when a competitor started to sell highly similar toy sets. The court in the 2nd instance had rejected the claims by arguing that the realization of a general idea using only basic shapes could not lend a "competitive character" to the design in the sense that the design could be construed as an indication of the commercial origin of the product by the public.

The BGH disagreed and argued that restriction to the use of basic shapes might lead to a puristic design which could be considered characterizing for the commercial origin of the goods such that copying the design could be an avoidable deception on the commercial origin of the goods.

Originality of individual features of the design is not required. Decisive is rather the overall impression.

AstraZeneca/Omperazol and the technical effects in the mechanical arts

Upon reading the ECJ decistion in re Astra Zeneca, I suddenly got a bad feeling about the creative ways a good patent attorney in the field of mechanical arts often works.

When arguing on the advantages of the invention, arguments on the technical effects of the distinguishing features need to be provided. These arguments have to be plausible to an extend that the Examiner believes that the technical effect is achieved indeed. This assesment has to be made "on the balance of probabilities".

When trying to argue on the inventive step, the patent attorney has to formulate an "objective technical problem" solved by the feature in question by referring to the technical effects thereof. If the specific advantages of a particular feature (e.g. taken from the specification) are not explicitly mentioned in the specification and the inventors are not available (e.g. during oral proceedings), both the patent attorney and the examiner usually rely on their technical expertise and sometimes "predict" the technical effects in a way which may sometimes be speculative.

This is usually not considered problematic in the mechanical arts where the technical effects of well-defined measures are usually predictable such that the examiner may well assess the plausibility of the attorney's arguments using his technical knowledge. However, the practice shows that a "good story" which is plausible and supported by convincing technical arguments provided by the attorney is often decisive in this regard.

In the field of chemistry or pharmacy where the effects of features may be less predictable, the EPO often requires the provision of comparative studies, which may be handed in later provided that the effects in question had been asserted already in the original disclosure. This is very rare in mechanics.

Now what happens if your client is an undertaking dominating the market and the "story" provided by the attorney in the mechanical arts turns out to be wrong in the end?

The AstraZeneca ruling by the ECJ (which related to information needed to obtain a supplementary protection and not ton inventiveness) contains a passage which may be transferred to the above case immediately:

"In the present case, the Court observes that the submission to the public authorities of misleading information liable to lead them into error and there-fore to make possible the grant of an exclusive right to which an undertaking is not entitled, or to which it is entitled for a shorter period, constitutes a practice falling outside the scope of competition on the merits which may be particularly restrictive of competition. Such conduct is not in keeping with the special responsibility of an undertaking in a dominant position not to impair, by conduct falling out-side the scope of competition on the merits, genuine undistorted competition in the common market"

What to learn from this? Be prudent with speculations on technical effects. Astra Zeneca was sentenced to pay a fine of 52,5 million EUR......