Claims for damages are not limited by first act of infringement

In a landmark decision, the First Senate of the Federal Supreme Court has overturned previous case law on claims for damages in trademark infringement cases, thereby strengthening the position of trademark owners (Case I ZR 93/04, July 19 2007, published in December 2007).

The owner of the German registration for the mark WINDSOR ESTATE and its licensee sued the defendant for trademark infringement. The defendant used the terms 'Windsor estate' and 'Windsor garden' for climbing aids for plants. The trademark WINDSOR ESTATE was registered on January 31 2003 for identical goods and was published on February 14 2003. The first act of infringement was the distribution of leaflets using the term 'Windsor estate' on March 31 2003.

According to previous case law of the First Senate of the Federal Supreme Court, claims for compensation arose only from the first act of infringement established by the claimant. The defendant was not required to disclose information on acts of infringement committed before that date and the burden to establish the first act of infringement lay on the claimant. Practitioners strongly criticized this line of decisions.

In the WINDSOR ESTATE Case, the First Senate overturned its own case law and ruled that claims for damages and disclosure of information are not limited by the first act of infringement. The First Senate followed the approach adopted by the Tenth Senate (which deals with patent and plant variety cases) in order to ensure the uniformity of case law.

The First Senate held that the interest of the claimant in an efficient enforcement overrides the interest of the defendant in not disclosing acts of infringement committed before the first act of infringement established by the claimant. Consequently, the claimant in this case was entitled to request the disclosure of information relating to acts committed before March 31 2003, as the defendant could have become aware of the trademark registration as early as February 28 2003.

Moreover, the First Senate found that use of the terms 'Windsor estate' and 'Windsor garden' infringed the trademark WINDSOR ESTATE. The court held that there was a likelihood of confusion between WINDSOR ESTATE and WINDSOR GARDEN because the word 'Windsor' is the dominant element of both signs and the relevant public will perceived the words 'estate' and 'garden' as being descriptive.

Importantly, the court also held that a licensee - either exclusive or non-exclusive - cannot assert its own claim for damages under the Trademark Act, as Section 30(4) grants only a procedural right to intervene in an action brought by the trademark owner.

The decision of the First Senate is a welcome development for trademark owners. However, in practice it is unlikely that infringers will deliberately disclose acts of infringement committed before the first act of infringement established by the claimant. In addition, the finding that there is a likelihood of confusion between WINDSOR ESTATE and WINDSOR GARDEN is debatable, as it is doubtful that the average German consumer is familiar with the word 'estate'. Finally, the term WINDSOR might be considered to be descriptive of the British royal family.

Florian Schwab, Boehmert & Boehmert, Munich