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EUROPE, MIDDLE EAST AND AFRICA: GERMANY
"MADE IN GERMANY" - REALLY?
Authors: Thorsten A. Wieland & Dr. Ivo Lewalter, Heuking Kühn Lüer Wojtek
Today, as part of our globalised economy, the production of goods, or at least of parts of goods, is often shifted to other countries. Manufacturers, however, still like to use the geographical indication "Made in Germany" to promote their products - be it to show that their products enjoy a special reputation or that they possess certain qualities.
But just how many production steps actually have to take place in Germany for a product to be labelled "Made in Germany"? The Appellate Court (Oberlandesgericht) of Düsseldorf in a decision dated 5 April 2011, Case no. I-20 U 110/10, recently commented on such requirements.
I. Facts of the case
The decision concerns a cutlery set consisting of six knives, forks, spoons and tea spoons. The packaging stated that the cutlery set was "Produced in Germany" and pictured the German flag. Inside the package, there was a leaflet with care instructions and, again, the statement "Made in Germany". The knives had, in fact, been produced in China. Only the finishing process had taken place in Germany, by which the knives had been polished several times. All the other parts of the cutlery set had been entirely produced in Germany by the defendant. Plaintiff was an association monitoring fair trade practices.
II. Judgement of the court
The court ruled that the information on the packaging and on the leaflet inside constituted a misleading geographical indication, which was therefore in breach of the German Trademarks Act, and ordered the defendant to refrain from using the misleading geographical indication "Made in Germany". Pursuant to Sec. 127 of the German Trademarks Act, geographical indications must not be used in the course of trade for goods or services which do not originate in the town, area or country indicated by the geographical indication, if the use of such names, statements or signs for goods or services of a different origin may mislead the public as to the geographical origin.
The court stated that products may only be promoted as having been "Produced in Germany" if they have been manufactured primarily in Germany. By particularly highlighting the country of manufacture, said the court, the manufacturer was heightening consumer expectations that all parts of the promoted cutlery set had indeed been manufactured in Germany. This was also due to the fact that the origin of the goods was used as the only feature distinguishing the goods from others. Further, the court clarified, the decision did not turn on consumer expectations as to quality. The consumer's motivation for purchasing a product made in Germany may be based on different reasons, such as the preservation of local jobs.
III. Practical implications
Geographical indications are particularly significant for the promotion of goods and can be a decisive factor in pricing. Companies doing business in Germany should, however, make sure to comply with this decision by the Appellate Court of Düsseldorf. All essential production steps of industrial products to be promoted and sold in Germany with the indication "Made in Germany" should have indeed taken place in Germany. Failing this, the advertiser runs the risk of being caught up in a lawsuit by a competitor or one of the many German associations monitoring fair trade practices.