Court considers environmental problems and traffic in trademark infringement case
The Federal Court of Justice recently addressed the question of similarity between bicycles and motor vehicles. The Hamburg Higher Regional Court must now render a final judgment by considering, among other issues, the extent to which the relevant public regards the use of a bicycle as an alternative to the use of a motor vehicle in light of developments in mobility.
The proceedings concerned a legal dispute between a trademark owner and a subsidiary of Peugeot SA over whether the use of a sign for motor vehicles constituted infringement of a trademark which was registered for bicycles. The Federal Court of Justice provided some guidance on the disputed question of similarity between motor vehicles and bicycles.
This decision is interesting in that the court expressly considered changes in modern civilisation – namely, changes in mobility and the climate. The Federal Court of Justice addressed environmental problems and the tense traffic situation in metropolitan areas in its assessment of the similarity of the goods. The Federal Court of Justice referred the case back to the Hamburg Higher Regional Court with the proviso that it could not be excluded that the relevant public regarded the use of a bicycle as an alternative to the use of a motor vehicle when travelling a short distance in a limited spatial area (eg, in cities).
The final ruling in this case, which is still pending, will have to be taken into account by the German courts. It may also affect assessments throughout the European Union.
On 15 October 2020 the Federal Court of Justice passed judgment on whether the use of the sign PURE PEARL for motor vehicles constituted infringement of the trademark PEARL, which was protected for bicycles.
The plaintiff in the proceedings was a company based in South Africa which owned:
- the registered EU trademark PEARL, which was protected for "bicycles"; and
- the registered German trademark PEARL, which was protected for "bicycles, bicycle parts (as far as included in class 12)".
The defendant was a French-based subsidiary of Peugeot SA which manufactured motor vehicles, bicycles and scooters and owned a later-registered EU trademark, PURE PEARL, which claimed protection for "vehicles, apparatus for land transport, motor vehicles, components therefor".
The plaintiff contested the use of the signs CITROËN DS4 PURE PEARL and CITROËN DS5 PURE PEARL for motor vehicles and claimed infringement of its trademark rights.
The first-instance court upheld the action. In the second instance, the Hamburg Higher Regional Court dismissed the claim on the grounds that although there was a similarity between the signs PEARL and PURE PEARL, the goods (ie, bicycles and motor vehicles) were dissimilar.
Assuming a labelling practice in the motor vehicle sector whereby well-known car brands are often combined with other origin-indicating elements, the Federal Court of Justice agreed with the finding that the relevant public would perceive the sign PURE PEARL in the combinations CITROËN DS4 PURE PEARL and CITROËN DS5 PURE PEARL in such a way that the sign PURE PEARL itself would be understood as an indication of origin and thus as a trademark. However, the Federal Court of Justice held that the well-known CITROËN trademark would also be recognised.
The lower court dismissed any similarity between the goods, although it took into account that numerous motor vehicle manufacturers (eg, BMW and Porsche) also offered bicycles and that some automobile manufacturers (eg, Opel and Peugeot) had initially been active in the market as manufactures of bicycles before they entered the motor vehicle sector. Nevertheless, the lower court assumed that bicycles typically did not have the same place of origin as motor vehicles.
The lower court considered that although bicycles and motor vehicles are both land vehicles which transfer energy to the ground via wheels, unlike bicycles, motor vehicles are powered exclusively by an engine and are suitable for travelling longer distances at higher speeds. The lower court considered that bicycles are technologically simple. It held that driving a motor vehicle is subject to special requirements (ie, a driver's licence) which do not apply to bicycles. The lower court further considered that motor vehicles and bicycles are not complementary goods and that the mere fact that bicycles were offered by a motor vehicle manufacturer under the same sign or that a licensing practice of the trademarks for bicycles could be assumed was insufficient to assume a similarity of goods. Moreover, the lower court held that in this case the public would not assume a transfer of image or technology from a manufacturer of bicycles to one of the few motor vehicle manufacturers.
The Federal Court of Justice admitted that the mere fact that a practice existed of licensing the brands of motor vehicle manufacturers to bicycles did not constitute a similarity of goods. In this vein, the Federal Court of Justice referred to case law, which found that the existing licensing practice in the context of motor vehicles and model cars or computer games did not establish similarity.
The Federal Court of Justice also agreed that, in the present case, the relevant public would not assume a transfer of know-how from bicycles to motor vehicles.
However, contrary to the findings of the lower court, the Federal Court of Justice referred to the fact that motor vehicle manufacturers (eg, Opel and Peugeot) had previously produced bicycles and therefore held that the defendant's parent company's continued production of bicycles had to be considered. Further, sufficient consideration had to be given to the numerous motor vehicle manufacturers (eg, BMW, Mercedes, VW, Porsche, Peugeot and Smart), which also offered bicycles under their brands, and the fact that the public was accustomed to this practice.
The Federal Court of Justice further stated that due to the development of different types of mobility, there was no longer a clear distinction between bicycles and motor vehicles. The Federal Court of Justice pointed out that future assessments would also have to consider the extent to which new means of transport which aim to transform existing mobility concepts are constantly being developed in view of growing environmental problems and increasing traffic, particularly in cities. For example, a switch from cars to bicycles as an alternate means of transport would be an essential consideration. The court highlighted that the market for electric bicycles is growing and held that the emergence of electronically powered stand-up scooters indicates a change in mobility behaviour. The court stated that these trends are leading automakers to look increasingly at bicycles as a future alternative to their motor vehicle offerings and, in view of these developments, bicycles and motor vehicles have become increasingly interchangeable.
Finally, the Federal Court of Justice stated that the Hamburg Higher Regional Court had not considered submissions regarding the fact that the relevant public may well consider the use of a bicycle as an alternative to the use of a motor vehicle. The Federal Court of Justice held that this idea was valid in that both motor vehicles and bicycles are used as a means of transport for short distances in limited spatial areas (eg, in cities).
It remains to be seen how the Hamburg Higher Regional Court will decide in this question of similarity and whether the court will maintain its previous practice. Nevertheless, this question is sure to arise in the future as the bicycle sector expands. When considering trademark rights – not only when preparing new applications, but also when assessing conflicts – the similarity between bicycles and motor vehicles may have to be assessed in a new way.
Regardless of the outcome of this case, the decision also addresses the extent to which the concept of mobility options can change. It shows that the understanding of transport used for assessing the similarity of goods is not fixed and must adapt to current circumstances.