BGH: not so fast, look-alike fasteners

Whether features of a (usually three dimensional) sign that was formely protected by a patent can be the object of a valid trade mark registration has been the subject of quite a few decisions (see C-48-09 P (LEGO brick), IPKat post,  joined Cases C‑337/12 P to C‑340/12 P (Yoshida knives), IPKat post, and TrafFix Devices, Inc. v. Marketing Displays, Inc., the leading US Supreme Court decision on the subject).

Trade mark owners have generally not fared well when the sign for which protection was sought was the object of an expired utility patent. Courts consider trade marking such shapes to be an extension of the limited term of the patent and contrary to public policy.

However, a key question which has not been addressed with a lot of attention by most courts is what exactly is the object of a utility patent. It is not the specific embodiment of the technical teaching used to illustrate the teaching, it is the technical teaching as described in the claims. It is possible that this technical teaching can be achieved by shapes that look quite different from the examples given in the patent specification and from the products actually placed on the market by the patentee.

In a recently published decision (I ZR 107/13), the German BGH has taken a more nuanced look at the issue - not in the context of (harmonised) trade mark law, but rather in the context of (largely) unharmonised unfair competition law. Still, the decision is interesting beyond Germany.

The claimant, Austrian Schnabl Stecktechnik GmbH, was the owner of a patent for a method of fastening electrical installations (tubes) to a wall (the decision does not state the patent number, but I believe it to be EP 0 105 865 B1). The method uses eccentric teeth fixed to a rod that is inserted into a pre-drilled hole and will expand when the rod is being pulled from the hole. This has the advantage that little force is needed for inserting the rod, but a large force is required to remove the rod from the hole. The figures from the patent show the principle quite clearly.

Figures from Schnabl's expired patent

Schnabl used an exclusive distributor for distribution of its fasteners in Germany. This distributor sold 90% of the fasteners to whole-sellers who in turn sold them under their own branding to end users (electricians). After expiration of the patent, the distributor began marketing its own fasteners, which bear a striking resemblance to Schnabl's products (see image).

Schnabl's fasteners (on the left) and the distributors fasteners (on the right)

Schnabl sued for unfair competition, claiming that its products had "competitive originality" ("wettbewerbliche Eigenart"), i.e., the relevant consumers associated their shape with a specific origin, and the distributor's use of nearly identical shapes led to confusion and/or exploitation of the original products' reputation. The first instance court sided with Schnabl. On appeal, the Oberlandesgericht Frankfurt reversed and dismissed the complaint. The reputation of Schnabl's products was based on the shape of the rod and its teeth, not the attached rings, bars etc. The rod and its eccentric teeth was subject of the expired patent and its appropriation by a competitor could not be prevented after expiration of the patent. In any case, since Schnabl's products were sold in Germany under different brands, the relevant consumers - we come to who that actually is - would not associate their shapes with a single source.  

On appeal, the BGH lifted the second instance's decision and remanded for further factual findings. The BGH held that the mere fact that a product had been within the scope of protection of a now expired patent did not prevent a finding of passing off if the shape of the product was not the only way to perform the (formerly) patented teaching (para. 24):

An element formerly protected by a patent (here the push-rod with its eccentric teeth) can form the basis for competitive originality of a product if the specific shape of the element is not technically necessary, but may be replaced by a different design that serves the same technical purpose without loss of quality.

In other words, in the area of (unharmonised) competition law, the BGH applies the "alternative shape" test that the CJEU explicitly rejected in the domain of harmonised trade mark law ("As to the question whether the establishment that there are other shapes which could achieve the same technical result can overcome the ground for refusal or invalidity contained in Article 3(1)(e) [Directive 89/104/EEC], second indent, there is nothing in the wording of that provision to allow such a conclusion.", C-299/99 - Philips v. Remington).

The BGH then goes on and states, more controversially in my opinion (para. 36):*

In case of an (almost) identical copy, a stricter standard applies with regards to the legality of appropriating features of the prior art that adequately solve a technical problem than in case of more limited resemblance. In case of an (almost) identical copy, the copier cannot, in principle, defend itself by argueing that it is merely appropriating an adequate technical teaching no longer protected by patent. If the copying of formerly protected elements leads to an (almost) identical copy, the competitor is reasonably requested to use another adequate ("angemessene") technical solution, unless the risk of confusion about the origin of the goods can be countered by other measures, such as labeling.

In other words, you cannot simply put a product on the market that corresponds to the specific examples of an expired patent and assume you are safe. If the product that looks like the specific example has acquired competitive originality, you have to use another "adequate" technical solution. The key term being "adequate" - I would assume that this means the alternative solution is in no way inferior to the specific embodiment of the patented teaching marketed by the patentee, but the BGH does not give much guidance on what an "adequate" solution is.

In the case at hand, affixing a label to the products was not possible. While the distributor used its own brand on the packaging and in its promotional material, the findings of the lower court did not show that this was sufficient to prevent confusion about the origin of the products. The lower court also had not made any findings as to whether another "adequate" technical solution was available - Schnabl argued that competitors used eccentric teeth on their fasteners that looked quite different from Schnabl's without incurring any disadvantages.

Schnabl's fastener (top) and alternative forms allegedly achieving the same technical effect (bottom)

The lower court had also failed to find whether the whole-sellers, rather than the end-users, perceived the shape of Schnabl's products as an indication of origin. It was improper to only consider the end-users as the relevant public. The BGH therefore remanded the case to the OLG Frankfurt for further factual findings.

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* German original of the crucial para. 36 (references omitted):

Bei einer (nahezu) identischen Nachahmung gilt allerdings im Hinblick auf die Zulässigkeit der Übernahme von Merkmalen, die dem freien Stand der Technik angehören und der angemessenen Lösung einer technischen Aufgabe dienen, ein strengerer Maßstab als bei einem geringeren Grad der Übernahme. Bei einer (nahezu) identischen Übernahme kann sich der Nachahmer grundsätzlich nicht darauf berufen, er habe lediglich eine nicht unter Sonderrechtsschutz stehende angemessene technische Lösung übernommen. Würde die Übernahme solcher Merkmale zu einer (nahezu) identischen Nachahmung führen, ist es einem Wettbewerber regelmäßig zuzumuten, auf eine andere angemessene technische Lösung auszuweichen, wenn er der Gefahr einer Herkunftstäuschung nicht auf andere Weise - etwa durch eine (unterscheidende) Kennzeichnung seiner Produkte - entgegenwirken kann.