Germany: German Federal Supreme Court Rules on Domain Names

In 2000, the Hamburg Court of Appeal decided that the use of the domain name "mitwohnzentrale.de" (housing-cooperative.de) was not in line with German competition law, since the domain name owner did not represent all the housing cooperatives active in Germany. The court held that the use of such a generic domain without a distinctive addition would lead to an unfair channeling of consumers seeking housing cooperative services on the Internet to the domain name owner's web site.

The Federal Supreme Court has in the meantime overturned this ruling, holding that it is generally permissible to use generic terms as domain names. The established principles of unfair competition case law do not extend to the use of such generic designations. By using a generic domain name, the service provider does not directly influence the customers of its competitors. The argument that generic domains should be kept free for all internet users - in keeping with the provisions of the Trademark Act - was deemed invalid by the Federal Supreme Court, since internet domains do not create an absolute IP right as a trademark; rather competitors are free to use the term 'mitwohnzentrale' on their web sites and in their advertising without limitation.

However, the Federal Supreme Court explained that the admissibility of the use of generic domains also has certain limitations. For example, if the owner of a generic domain also applied for (all) other generic domain names in other top-level domains, its conduct could be considered to be unfair. Further, the use of generic domain names must not be misleading. The Federal Supreme Court sent the case back to the Hamburg Court of Appeal for further investigation as to whether the actual use of the domain mitwohnzentrale.de can be considered misleading (ie, because the web site creates the impression that it is the only housing cooperative in Germany).

On November 22, 2001, the Federal Supreme Court issued another milestone decision on German domain name law, this time in the area of the law on designations focusing on the aspect of a private use of Internet domains.

The plaintiff, the German Shell GmbH, affiliated with the International Shell Group, filed a lawsuit against a private person, Dr. Andreas Shell, requesting an injunction concerning the domain "shell.de", which was initially used by the defendant for commercial purposes and later on only for private purposes at the time of the decision of the Federal Supreme Court. Furthermore, a transfer of this domain to the plaintiff was requested. Both the District Court and the Court of Appeals granted the injunction against Mr. Shell. In addition, the Court of Appeals granted the request for transfer of the domain name to the plaintiff.

The Federal Supreme Court confirmed these decisions to a great extent. However, it seized the opportunity to further develop German case law on internet domains names. As a result, the private use of the internet address "shell.de" was considered in this particular case as an infringement of the name rights of the plaintiff. According to German designation law, company names or abbreviations thereof are not only covered by the Trademark Act, but also by section 12 of the German Civil Code concerning name rights of natural persons and companies. This name right cannot only be enforced in the course of business - as company name protection and trademark protection require in accordance with the Trademark Act - but also against purely private use. The Federal Supreme Court set forth the general principle that a private person cannot be prevented from using his family name as an internet address. If several persons and/or companies have the same name, their interests have to be balanced against each other. Such conflicts are - generally - sorted out in accordance with the general principle of priority. In many cases, the interests of a person who first applied for the domain, will be privileged over those of other persons claiming their rights on the same domain name at a later date. This assumption remains valid even if the name of another person or company is for whatever reason better known than the name of the person who first applied for the domain. Also, German Law does not accord a general precedence of economic interests over private interests.

In the case at hand, however, the Federal Supreme Court was of the opinion that the interests of both parties were of such different weight that an exception to the aforementioned rules had to be made. Since the designation "Shell" is of such outstanding reputation, the defendant was obliged to use an addition to his domain name to avoid that a significant number of customers of the plaintiff Shell company be directed to his website. A typical internet user would expect to find the plaintiff when entering "www.shell.de" into the browser software. Furthermore, contrary to the defendant, the plaintiff cannot easily inform its customers that "www.shell.de" is not its internet address. Even the friends or family of the defendant would not expect to find the private website of the Shell family by typing "www. shell.de". Although the plaintiff succeeded in this particular case so far, companies with less famous or more common names might be well advised that the general principle in cases where both plaintiff and defendant have identical names is still the priority of the domain name application according to German domain name law.

With respect to the request for transfer of the domain, the Federal Supreme Court held that the plaintiff is not entitled to have the domain name transferred to it. A defendant can only be obliged to relinquish the domain name, since in most cases it cannot be excluded that a third party might have an equal or better right than the plaintiff to the domain in suit.

© by Dietrich Beier 2001. Dietrich Beier is an attorney at law and partner with the Intellectual Property firm Bardehle Pagenberg Dost Altenburg Geissler Isenbruck, Munich.

First published with International Technology Law Review, EuromoneyPLC, London, 2001