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/ Created by Dr. Reinhard Fischer

Self-promotion – but with others’ products?

About the use of other brands and products for a company’s own advertising

In the world of goods and services, many things are connected. One product might not work without another, a certain feature of an item might only become clear when presented in a wider context. For some companies, this raises the question: To what extent am I allowed to show or name brands or products of other companies to promote my own? Several scenarios are conceivable:
 

Brand use: Rights and risks

A trader wants to resell a branded product that it has purchased under the brand: If the owner of the trademark has not explicitly and effectively excluded further distribution under the brand (e.g. through a selective distribution system compatible with antitrust law), the trader is entitled to do this (“principle of exhaustion”). In this case, the trader may also use the other company’s brand for advertising purposes to offer the products for sale.

Sometimes, another company’s branded product might be mentioned in an ad to indicate that the company’s own product is a spare part or accessory for it, or that the company offers repair services for such products. As long as the presentation of the other company’s branded product is absolutely necessary to explain the purpose and the possible use of the company’s own product in this context, the use of the other company’s brand is allowed. A manufacturer of vacuum filter bags who advertised with the text “Filter bag suitable for Vorwerk Kobold 130” printed on its packaging, for example, won its case. The Federal Court of Justice (BGH) (2005) deemed this permissible use of another company’s name, since the product could not be adequately described without mentioning this brand. Another case, however, shows how easy it is to encounter stumbling blocks: A car repair shop used the Volkswagen emblem to advertise its services for VW vehicles with the slogan “Great inspection for all”. The Federal Court of Justice (2011) put a stop to this: According to the judges, the logo was not necessary information – providing the word mark “VW” would have sufficed to inform customers comprehensively. 

Things get a bit more complicated when it comes to comparative advertising, i.e. ads that refer to a competitor or its goods or services for the purpose of comparison. Companies like to use these to highlight particular advantages of their own products. Some important criteria apply to this type of advertising (according to Section 6 II Act Against Unfair Competition (UWG)): One of these is the comparison with goods or services “for the same need or purpose”. Another criterion concerns objectivity, in other words the reference to certain verifiable characteristics of the goods. A drugstore chain, for example, cleverly used a large-scale advertising campaign to compare the prices of its own-brand products with those of more expensive branded products from other manufacturers in tables – according to the Federal Court of Justice ruling (2007), these were indeed objective and verifiable statements, and the ad was deemed permissible. Comparative advertising must not, however, be misleading. This means that there must be no confusion between the advertiser and the competitor or between their respective brands for the consumer. The choice of words can be key: For example, a (different) manufacturer of vacuum bags once advertised its products with phrases such as “similar to Swirl”. In its ruling (2015), the Federal Court of Justice found this permissible, as the term “similar” indicated that the ad was precisely not about the plaintiff’s vacuum bags, but other vacuum bags, and thus it was not likely to cause confusion. If comparative advertising is permissible, a company may name products of other brands with which it is comparing its products in its advertising and it may generally show these products, even if they are copyright- or design-protected (more on this below).

What if another brand is mentioned as a reference – as is often the case in customer lists on websites? The case law has not been clear on this point so far. To be on the safe side, companies should therefore always obtain the customer’s consent if they want to use its name or brands as a reference. Of course, this makes good sense anyway if the company does not wish to endanger the business relationship.
 

Presenting products: Guidelines and pitfalls

One very popular strategy, but sometimes a precarious one, is a company presenting others’ products in its own advertising. For example, when the products appear in commercials to underline a certain message. Exclusive branded products with a high level of brand awareness are particularly well protected. This is because there is a comparatively high risk that others will deliberately exploit their good reputation and thus profit from the attention that the product receives.

There are also pitfalls when it comes to copyrights. For example, if a copyright-protected work is used in advertising as an “incidental” for another product. Here, the consent of the creator should always be obtained. This is not necessarily required, however, if the copyright-protected work shown is only an insignificant incidental – i.e. if the work has no influence on the overall effect and could just as easily be omitted or replaced. An interesting exception is provided in Section 59 Copyright Act (UrhG), termed “freedom of panorama”: This applies if the work is located permanently on public paths, roads, or squares – and also if the work shown is not an incidental. The ships of AIDA Cruises, with their eye-catching puckered lips, are an example: An artist designed the puckered lips for the cruise company and transferred the exclusive right of use to the company through a license agreement. A provider of shore excursions then posted a photo of the ship on the internet, which was taken from a public place. The Federal Court of Justice (2017) found this to be permissible because, in accordance with the freedom of panorama, a cruise ship is located in public places and is intended to be used for a long period of time on the water and in seaports and to be publicly visible.

In addition to competition and copyright issues, design law sometimes comes into play when presenting other companies’ products. The same applies here: The consent of the rights holder should be obtained before reproducing another’s design. An exception is made in cases where the reproduction of the product is used for citation purposes (Section 40 No. 3 Design Act (DesignG)). It must be clear that the design serves as evidence or the basis for a company’s own statements. The Federal Court of Justice (2011) did not consider this the case, for example, in the matter of an exhibitor catalogue for rail vehicle technology: Here, the train model ICE 3, a registered design, was depicted to visually underpin the wheelset testing facility developed for Deutsche Bahn. However, the Federal Court of Justice did not deem there to be any connection. According to the judges, the image only served to promote the company’s own range of services. The outcome of the case would probably have been different if the image had been used in the context of a permissible comparative advertisement to present the competitor’s product that was being compared.

Cases like these show: Companies that use other brands or products should cover their backs by gaining the rights holder’s consent and keeping an eye on the finer points of the law. Those who do not maintain objectivity or who seek to steal others’ thunder may find themselves in legal difficulty.

 

Picture credits: alex2016 – AdobeStock.com

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