Federal Supreme Court issues first decision in 'red colour' case

On September 23 2015 the German Federal Supreme Court issued its first decision (I ZR 78/14) in the long-running dispute over the red colour mark, which has kept various courts and authorities busy over the years. This decision constitutes only one further step, and not the end of the proceedings.

Deutscher Sparkassen- und Giroverband (DSGV) registered the abstract colour red in respect of several banking services and financial services with the German Patent and Trademark Office after long registration proceedings.

With this registration, DSGV filed suit against the Spanish parent company and the German subsidiary of the Santander Group, which had been using the colour red throughout Europe for many years. Both parties do not use the colour red on its own, but as the colour of the 'S' logo and of the name Sparkasse (for DSGV) or as the background of the name Santander and a flame logo (for Santander):

The lower civil court in Hamburg granted DSGV's claim against the German subsidiary of Banco Santander, affirming that the red colour mark had been infringed; however, it rejected the claim against the parent company, holding that the latter has not been using the colour red in German commerce.

The court of appeal affirmed the decision against the parent company. The proceedings were suspended with respect to the German affiliate, as Santander Group filed a cancellation action against DSGV's colour mark and the court of appeal was of the opinion that it should not decide on a trademark infringement claim while the cancellation action was pending, as the claim was based primarily on the infringement of the registered colour mark.

The decision of the Federal Supreme Court (which is not yet available in full, but only as a press release) lifted the decision against the parent company and referred the case back to the court of appeal. According to the press release, this decision was based on three arguments:

• The Federal Supreme Court doubted that the infringement proceedings should be suspended while the cancellation action was pending. As in the 'Yellow' case, the Federal Supreme Court held that the outcome of the cancellation action was “open” and that this would not justify a suspension of the proceedings.

• The Federal Supreme Court held that the court of appeal should not have split up the proceedings against the parent company and its German affiliate, as similar legal questions had to be answered in both cases and the dispute should be decided in the same way against both defendants.

• The Federal Supreme Court disagreed with the previous instances that the Spanish parent company had not used the colour red in German commerce. It referred to the use of the Santander logo during a formula 1 race in Germany and to the internet presence of Banco Santander, whose website could be accessed from Germany. The court was apparently of the opinion that this could theoretically constitute an infringement of DSGV's red colour mark and asked the court of appeal to check whether the colour mark was so well known that German consumers would establish a link between the colour mark of DSGV and use of the colour red by Banco Santander, even if there was no likelihood of confusion in the traditional sense. As the court of appeal has not made any statements in that respect, the case was referred back to it for further consideration.

As the use of the Santander logo during a formula 1 race and Santander's internet presence could indeed constitute use in German commerce, this holding of the Federal Supreme Court is not a real surprise. However, the court missed the opportunity to limit the scope of protection of an abstract colour mark, which was not used per se by Santander, but only as a background colour for the name Santander and for its flame logo. The court apparently stuck to the rather broad scope of protection for abstract colour marks which was affirmed in the 'Yellow' case last year. Furthermore, it is surprising that the court refused to suspend the infringement proceedings based on the fact that the outcome of the cancellation action was “open”. Although the court took a similar point of view in the 'Yellow' case, it is surprising that the open outcome of a cancellation action against a registered mark which is the sole basis for the infringement proceedings would not be a reason to suspend those proceedings.

The most decisive part of this dispute is, however, the cancellation proceedings against the colour mark. The Federal Patent Court had referred the case to the Court of Justice of the European Union (ECJ) for a preliminary ruling, which was issued on June 19 2014 in Joined Cases C-217/13 and C-218/13. With this preliminary ruling at hand, the Federal Patent Court decided on July 8 2105 (25 W (pat) 13/14) that the abstract colour mark of DSGV should be cancelled, knowing that the Federal Supreme Court had denied a similar claim for cancellation in the 'Yellow' case and had just referred the 'Nivea Blue' case back to the Federal Patent Court for further factual findings.

The decision of the Federal Patent Court ordering the cancellation of the red colour mark was very long (81 pages, compared to 10 to 15 pages usually), adopted some rules laid down in the Sparkassen-Rot decision of the ECJ and also challenged the various surveys submitted by both parties during the course of the proceedings. DSGV filed a further appeal on grounds of law against the cancellation of the colour mark, and this matter is still pending. It will be very interesting to see how the Federal Supreme Court will deal with the cancellation action. Depending on the outcome of that action, the court of appeal in Hamburg will then take up the infringement action against both defendants and it seems likely that the case will then reach the Federal Supreme Court for the third time. It even seems possible that some questions will be sent to the ECJ for a preliminary ruling, both in the cancellation action and the infringement proceedings. Hence, the end of these proceedings are not yet within sight.

Carsten Albrecht, FPS Fritze Wicke Seelig, Hamburg