PAEFFGEN GMBH v. GERMANY
Inadmissible
Peer Lorenzen
The applicant, Paeffgen GmbH, is a limited liability company possessing legal personality under German law. It was represented before the Court by Mr B. Hoeller and colleagues, lawyers practising in Bonn. The applicant company sells construction materials, but is also engaged in e-commerce. It held several thousand internet domain names which had been registered by the competent registration authority (DENIC e.G.) after payment of the respective fees (currently EUR 58 per domain registration and EUR 58 per year for the connectivity and administration of the domain by DENIC e.G.). In particular, in 1997 and 1998 the applicant successfully applied for the registration of the domains “freundin-online.de”, “ad-acta.de”, “Eltern-online.de” and “duck.de”. The domain contracts concluded with DENIC e.G. granted the applicant the exclusive right to use or dispose of the domains registered. According to terms of the contract, DENIC e.G. did not examine whether the registration and use of the domain infringed the rights of others, which was a matter for the domain holder to verify. The contracts were open-ended and could be terminated by the domain holder without notice and by DENIC e.G. for good cause (such as the final finding of a court that the registration of the domain in question violated the rights of others or the contracting party’s failure to pay the domain fees). Subsequently, several sets of proceedings were brought against the applicant by other companies and private individuals claiming that the registration and use by the applicant of certain domains breached their trademark rights and / or their rights to a (business) name. On 4 October 2002 the Freundin Verlag GmbH, publisher of the women’s magazine “freundin” (“(girl)friend”) and licensed holder of the trademark “freundin”, brought an action in the Munich Regional Court for a court order prohibiting the applicant to use or dispose of the internet domain “freundin-online.de” and obliging the applicant to apply for a cancellation of this domain with the registration authority. It argued that the applicant breached its right to a business denomination and its trademark rights. By decision of 20 February 2003 the Munich Regional Court separated two counterclaims brought by the applicant from the plaintiff’s claim. It argued that, contrary to the plaintiff’s action, the counterclaims, which had only been served in the hearing on 16 January 2003, were not yet ready for a decision. In its judgment delivered on the same day the Munich I Regional Court, relying on section 15 §§ 3 and 4 of the Trademark Act (Markengesetz; see Relevant domestic law below), allowed the plaintiff’s action. The Regional Court found that the magazine title “freundin” was a well-known business denomination as the women’s magazine, which addressed the general public with the issues it covered, had been sold in all newspaper stands for at least thirty years. Moreover, the plaintiff published the contents and services of its magazine on the website “freundin.de”. The applicant was unfairly taking advantage of the distinctiveness of the plaintiff’s business denomination for its internet platform without justification. As the applicant had failed to explain why it did not use its domain “freundin-online.de”, the respective website being “under construction” for years, the court concluded that the company had only “grabbed” this domain in order to sell it to the plaintiff which could then use the domain. As the applicant also had not set out what future use exactly it intended for the website at issue – the company had only announced that an internet portal should be created on which everyone having a connection with the domain name could present himself free of charge –, there was a risk that it would use the site in one of numerous possible manners which infringed the plaintiff’s rights. Therefore, the scope of the orders against the applicant could not be less broad. By decision of 16 October 2003 the Munich Court of Appeal, having considered the parties’ written submissions, dismissed the applicant’s appeal. It found that the case did not raise a legal issue of fundamental importance, that its judgment was not necessary for the development of the law or for securing the uniform application of the law and that, for the reasons given by the Regional Court, the appeal was ill-founded. The Court of Appeal further argued that the separation of the applicant’s two counterclaims from the plaintiff’s claim had complied with the applicable legal provisions and had neither been arbitrary nor breached the applicant’s right to be heard. The counterclaim against both the plaintiff and a third party company, by which the applicant pursued a partial cancellation of the word mark “freundin”, was irrelevant to the present proceedings as the scope of that word mark had not been relied upon by the Regional Court or by itself, the decision having been based on the protection of the plaintiff’s business denomination. The applicant’s counterclaim against the plaintiff alone for a declaration that the use by the applicant of the domain in order to sell computer discs did not breach the plaintiff’s rights was no more than a contestation of the plaintiff’s claim and had as such been taken into consideration in the Regional Court’s judgment. The applicant had, however, failed to demonstrate that it could use the domain in question in a way which did not breach the plaintiff’s rights. On 21 November 2003 the applicant lodged a complaint with the Federal Constitutional Court. It submitted that the decisions taken by the civil courts had breached its right to be heard and to a fair trial due to the separation of its counterclaims from the plaintiff’s claims and by dismissing its appeal by way of a decision. Moreover, its right to property had been violated in that it was prohibited to use its domain “freundin-online.de” and obliged to apply for its cancellation. On 12 January 2004 the Federal Constitutional Court, referring to the provisions allowing for that procedure, declined to consider the applicant’s constitutional complaint without giving reasons for its decision (file no. 1 BvR 2377/03). The decision was served on the applicant’s counsel on 14 January 2004. In 2000 the ad-acta Datenschutz und Recycling GmbH, a company dealing with the destruction of files and data media, brought an action for a court order prohibiting the applicant to use the domain name “ad-acta.de” and obliging it to apply with the registration authority for a cancellation of that domain. It argued that the applicant breached its right to a business name and its trademark rights. On 8 November 2000 the Düsseldorf Regional Court, relying on the right to protection of one’s name under section 12 of the Civil Code (see Relevant domestic law below), allowed the plaintiff’s action. On 29 October 2001 the Düsseldorf Court of Appeal dismissed the applicant’s appeal. It found that the plaintiff had a claim under section 15 §§ 2 and 4 of the Trademark Act and section 12 of the Civil Code (see Relevant domestic law below) for the applicant to refrain from using the domain name “ad-acta.de”. The term “ad-acta” was part of the plaintiff’s business name. The use of the internet address “ad-acta.de” by the applicant company, which intended to offer definitions and advertisements concerning the storing and destruction of files on its website, was likely to lead to confusion with the plaintiff’s company and infringed the plaintiff’s right to a name. In order to have the interference with its rights removed, the plaintiff could also request the applicant to agree to the cancellation of its domain name with the registration authority. On 13 June 2002 the Federal Court of Justice refused to grant the applicant leave to appeal on points of law, finding that the appeal had no prospects of success. On 18 July 2002 the applicant lodged a constitutional complaint with the Federal Constitutional Court. It complained, in particular, that its right to property had been breached and that the civil courts had failed to consider its arguments relating to the violation of this right. On 24 November 2004 the Federal Constitutional Court declined to consider the applicant’s constitutional complaint (file no. 1 BvR 1306/02). It found that the complaint had no prospects of success because the impugned decisions did not violate the applicant’s property rights. Its contract with the registration authority provided that the applicant had a right to use the domain in question, which constituted “property” under the Basic Law. However, the application to the present case of the relevant provisions of the Trademark Act was a limitation on the applicant’s property rights which was compatible with the Basic Law. In particular, the applicant’s duty to apply for a cancellation of its domain with the registration authority did not disproportionately limit its property rights. There were no measures which would be less restrictive while fully satisfying the legitimate interests of the company holding the trademark rights to stop the interference with its rights. The danger of confusion could not sufficiently be averted, for example, by indications given on a website operated by the applicant under the domain name in question. The decision was served on the applicant’s counsel on 6 December 2004. On 8 August 2001 the Gruner + Jahr AG & Co. KG, which has published the magazine “Eltern” (“parents”) monthly since 1966 and has run the website “Eltern.de” since 1997, brought an action against the applicant company in the Hamburg Regional Court. It applied for an order prohibiting the applicant from using or to authorising others to use the domain name “eltern-online.de” and obliging the applicant to apply with the registration authority for a cancellation of that domain. It argued that the applicant breached its trademark rights. On 5 August 2002 the Hamburg Regional Court, relying on section 15 §§ 2 and 4 of the Trademark Act, allowed the plaintiff’s action. On 31 July 2003 the Hamburg Court of Appeal dismissed the applicant’s appeal. It argued that there was a danger of confusion between the domain name “eltern-online.de” registered by the applicant and the business denomination “Eltern” of the plaintiff’s magazine within the meaning of section 15 §§ 2 and 4 of the Trademark Act. In order to have the interference with its rights removed, the plaintiff could also request the applicant to agree to the cancellation of its domain name with the registration authority. On 19 February 2004 the Federal Court of Justice dismissed the applicant’s complaint about the Court of Appeal’s refusal to grant it leave to appeal on points of law. On 23 March 2004 the applicant lodged a constitutional complaint with the Federal Constitutional Court in which it complained, in particular, that its property rights had been breached by the decisions of the civil courts and that the civil courts had failed to consider its arguments concerning the violation of these rights. On 24 November 2004 the Federal Constitutional Court, without giving reasons, declined to consider the applicant’s constitutional complaint (file no. 1 BvR 650/04). The decision was served on the applicant’s counsel on 6 December 2004. In 2001 Mr Peter Duck, an architect who had been working under the business name “Architekturbüro Duck” (“architecture office Duck”) since 2000, brought an action in the Munich Regional Court for a court order prohibiting the applicant to use or dispose of the domain name “duck.de” and obliging the applicant to apply with the registration authority for the cancellation of that domain. He argued that the applicant breached his right to a name and his trademark rights. On 26 April 2001 the Munich I Regional Court allowed the plaintiff’s action. On 10 January 2002 the Munich Court of Appeal dismissed the applicant’s appeal. The domain name contained the plaintiff’s family name and the applicant had failed to give sound reasons outweighing the plaintiff’s interests why it made use of the name. In particular, if the applicant company, as it had claimed, wanted to create a website concerning the duck as an animal or aliment, it was free to use the German expression for duck or a different denomination which was not likely to lead to confusion with the plaintiff’s name. As the applicant had spent less than 3,000 marks in domain fees and had not posted any contents on the internet under the domain name in question, its possession did not warrant protection. The Federal Court of Justice subsequently refused to grant the applicant leave to appeal on points of law. On 20 September 2002 the applicant lodged a complaint with the Federal Constitutional Court. It argued, in particular, that its property rights had been breached by the decisions of the civil courts and that the civil courts had failed to consider its arguments concerning the violation of these rights. On 24 November 2004 the Federal Constitutional Court, without giving reasons, declined to consider the applicant’s constitutional complaint (file no. 1 BvR 1774/02). The decision was served on the applicant’s counsel on 6 December 2004. Section 12 of the Civil Code, which concerns the right to bear a name, provides that if someone contests the holder’s right to use a name or interferes with the holder’s interest by using the same name without justification, the holder may claim removal of the interference. If there is a risk of repeated interferences the holder may bring an action for a permanent injunction. Section 15 of the Trademark Act lays down the rights of holders of a business denomination (geschäftliche Bezeichnung). It is prohibited for third parties to use the business denomination or a similar mark without justification in the course of business activities in a manner which may lead to confusion with the protected denomination (section 15 § 2). Section 15 § 3 of the Trademark Act concerns business denominations which are well-known within the domestic territory. It is prohibited for third parties to use these business denominations or a similar mark in the course of business activities also if there is no danger of confusion within the meaning of paragraph 2 in so far as the use of the denomination unfairly exploits or interferes with the distinctiveness or esteem of the protected business denomination without justification. According to section 15 § 4 of the Trademark Act, the holder of a protected business denomination may bring an action to cease and desist against anyone who uses a business denomination or a similar mark contrary to paragraphs 2 or 3.