Author: Birgit Clark (Boult Wade Tennant)
Citation: Journal of Intellectual Property Law & Practice, doi:10.1093/jiplp/jpp205
German Federal Supreme Court (Bundesgerichtshof), advance press release No. 232/2009, 13 November 2009 concerning case I ZR 183/07 (‘WM-Marken’), 12 November 2009
The German Federal Supreme Court had decided that FIFA, the organiser of the football World Cup, cannot prevent the economic exploitation of its sporting events through third party trade mark registrations relating to the World Cup or the third party use of these marks.
The ‘general clause’ of section 3 of the German Act of Unfair Competition (UWG) prohibits unfair acts of competition which are liable to have more than an insubstantial impact on competition to the detriment of competitors, consumers, or other market participants. Section 4 No. 10 UWG renders it unlawful systematically to obstruct an individual competitor's freedom to act within the market.
‘Work titles’ (Werktitel) are any distinctive designation of an intangible result of work, such as the title of a book, and are protected under the German Trade Mark Act, mainly under the same terms as trade names and other business identifiers. In contrast to trade marks, work titles are protected without registration as soon as they are used in trade, subject only to the condition that they are inherently distinctive.
The International Federation of Association Football (FIFA), based in Switzerland, organizes the football World Cup and owns numerous (German) trade mark registrations relating to the football World Cup 2006, which was held in Germany, as well as trade marks relating to the upcoming World Cup to be held in South Africa later this year.
During past World Cup tournaments the defendant, sweets maker Ferrero GmbH had distributed free collectible stickers with its chocolate wafers that showed each member of the German national team together with a logo that combined a depiction of a football with a reference to the tournament, including the year it was held. In 2004 and 2005, the defendant registered eight word and device marks which referred to the World Cup and covered a broad range of classes. These marks included ‘WM 2010’, ‘WM’, and ‘2010’. The abbreviation WM was short for ‘Weltmeisterschaft’, the German word for World Cup. The defendant also applied to register three additional marks, including the mark ‘Südafrika 2010’ in reference to the 2010 World Cup in South Africa.
With its court action, FIFA sought to cancel Ferrero GmbH's World Cup trade mark registrations and to secure its agreement to a withdrawal of its pending applications arguing that the confectionery company had no rights to register the marks. FIFA, which controlled its World Cup franchise via its own collection company, claimed that Ferrero's trade mark registrations and applications infringed their earlier rights and constituted an infringement of German unfair competition law.
The Court of First Instance, the Regional Court of Hamburg (case reference: 312 O 353/05 of 25 October 2005) decided in FIFA's favour and ruled that the defendant's actions had unfairly obstructed the claimant's freedom to operate on the market under section 4 No. 10 UWG. The court of appeal, the Higher Regional Court of Hamburg (case reference: 3 U 240/05 of 13 September 2007), dismissed the claim and held that FIFA could base its claim neither on its earlier trade mark registrations nor on the protection of ‘work titles’. The Higher Regional Court disagreed with the Court of First Instance and emphasized that it could not be established that the defendant's trade mark registration aimed to obstruct the claimant in the market. The defendant's trade mark registrations predominantly served to safeguard its established business practices. Even though the specifications of the defendant's trade marks were wider than its actual business activities, a certain level of expansion was permissible.
In its decision of 12 November 2009, the German Federal Supreme Court agreed with the Higher Regional Court's reasoning. The Federal judges found that there was no likelihood of confusion between the parties' trade marks under section 14, German Trade Mark Act; nor could FIFA successfully base its claim on the ‘work title rights’ it owned for ‘WM 2010’, ‘GERMANY 2006’, and ‘SOUTH AFRICA’. FIFA was also barred from making claims under unfair competition law, including the so-called ‘general clause’ of section 3 UWG.
The Federal Supreme Court based its decision on the following reasoning: Ferrero's trade marks did not influence the relevant trade circles to assume that it was an official sponsor of the World Cup tournaments, nor did the defendant unfairly block FIFA's efforts to market the World Cup events via licensing through third party sponsors. The court emphasized that FIFA's basic constitutional right to exploit its World Cup tournaments commercially did not extend to the point that it could prevent all types of third party exploitation of the sport event.
The Federal Supreme Court clarified that FIFA, as the organiser of the World Cup tournament, did not own the exclusive right to every kind of financial exploitation of the sporting events it organized. Neither Ferrero's trade mark registrations nor its practice of including collectible stickers with its confectionery products unfairly and uncompetitively affect FIFA's economic exploitation of the events or lead to confusion on the market.
However, while this decision could have far-reaching consequences for organisers of sport (and other events) that seek to financially exploit their respective events, it is unlikely to be last ‘match’ between both sides, who have been involved in various disputes before.