No time limit in trademark delimitation agreements - Trademark Law

[GRP Rainer LLP Lawyers Tax Advisors - 12.11.2013] GRP Rainer Lawyers and Tax Advisors in Cologne, Berlin, Bonn, Bremen, Dusseldorf, Essen, Frankfurt, Hamburg, Hanover, Munich, Nuremberg, Stuttgart and London - www.grprainer.com/en conclude: A case decided by the Regional Court (LG) of Braunschweig (File number: 9 O 2637/12) concerned an agreement between two competing manufacturers of spirits. In their trademark delimitation agreement from 1974, the two companies had agreed on what colours could be used by which manufacturer in marketing the products. The plaintiff terminated the agreement in 2009. The reason it named was that market conditions had changed in the meantime, that contrary to the agreement signed at the time, the defendant and not the plaintiff was now connected with the colour of green, and that furthermore the sales figures had changed drastically. The defendant showed only declining sales, while the plaintiff had been able to expand its market share constantly. From the plaintiff's point of view, this was enough reason for cancelling the agreement.

However, the court was of a different opinion and dismissed the claim. The agreement concluded almost 40 years ago contained no ordinary termination right. The judges could not see such a drastic change in market conditions as the plaintiff had argued, and no termination could therefore be considered. When companies sign a trademark limitation agreement, they must be aware that it will stay in effect indefinitely and is still in force even after such a long time. Furthermore, the importance of colour in the marketing of products has not diminished. The defendant is still associated with green products.

Furthermore, it is not unreasonable to expect the plaintiff to respect the agreement. This clause does not prohibit the plaintiff from using the colour of green altogether. It is allowed to do so to a small degree. As the sales figures show, the trademark delimitation agreement has not interfered with the plaintiff's economic success.

The economic success of a product is closely related with advertising and design. The establishment of a trademark is connected with much work and expense. That is why rigorous action us usually taken against trademark violators. Due to the complex legal situation, those affected should consult a lawyer with experience in trademark law who can help to enforce claims and to apply for registration.

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