Commerzbank is allowed to use DAX mark, says Supreme Court

The German Federal Supreme Court has ruled in favour of Commerzbank in a dispute over the use of the trademark DAX (Case I ZR 42/07, April 30 2009).

 

Commerzbank is a German bank that trades in warrants, among other things. Deutsche Börse AG operates the Frankfurt Stock Exchange and provides services in respect of the commercial exploitation of indexes and rates. Deutsche Börse is the owner of the German trademarks DAX and DIVDAX for, among other services, “quotation of stock exchange prices; determination, including computation, of a share index” in Class 36 of the Nice Classification.

 

In 2001 Deutsche Börse and Commerzbank concluded a licensing agreement for the use of the mark DAX in respect of the issuance of warrants. After Commerzbank terminated the agreement in 2006, a dispute arose as to whether Commerzbank was entitled to use the DAX and DIVDAX marks. Commerzbank filed suit seeking a declaration that it was entitled to use Deutsche Börse’s trademarks. Deutsche Börse counterclaimed for injunctive relief and requested payment of licensing fees in the amount of over €1 million for use of the trademark DAX. The Frankfurt District Court rejected Commerzbank's claim and allowed Deutsche Börse’s counterclaim.

 

Commerzbank appealed to the Frankfurt Appeal Court. The court ruled that Commerzbank was entitled to use the DAX mark, but not the DIVDAX mark.  

 

On appeal, the Federal Supreme Court affirmed the Appeal Court’s decision with regard to the trademark DAX and held that Commerzbank was entitled to use the mark. The court held that use of the abbreviation 'DAX' (short for 'Deutscher Aktienindex') as a reference did not take unfair advantage of the reputation of the DAX mark and, consequently, did not violate Section 4(9)(b) of the Act against Unfair Competition.

 

Turning to Deutsche Börse’s trademark infringement claim, the court held that Commerzbank used the mark in a descriptive way. Therefore, such use was authorized under Section 23(2) of the Trademark Act. Under Section 23(2), third parties may use a trademark to describe the nature of their services provided that such use is not immoral. The court held that in the present case, use of the DAX mark by Commerzbank was not immoral because the DAX is a stock market index. Consequently, the court rejected Deutsche Börse’s counterclaim for injunctive relief in respect of the DAX mark. It remains unclear whether the court upheld the Appeal Court’s decision with regard to the trademark DIVDAX, as the decision has not yet been published.