Car dealership must not advertise with manufacturer logo

A car dealership that is not an authorized dealer for specific automobile brands must not advertise using the corresponding manufacturer logo in the course of its business operations. In the opinion of the Higher Regional Court (OLG) Jena, such advertising—regardless of trademark law issues—creates a misleading impression regarding the existence of authorized dealer status.

A car dealership that was an authorized dealer for the brands "Mitsubishi" and "SsangYong" but not for the brand "HYUNDAI" advertised extensively for the brand HYUNDAI on the building façade on its business premises as well as on its business letterheads and used the corresponding manufacturer logo, albeit with slight colour modifications. In addition, advertising was displayed on a sign with the note "HYUNDAI Spezialwerkstatt".

The Wettbewerbszentrale (Competition Centre) saw in this advertising a misleading of consumers and demanded that the use of the logo and lettering be discontinued. The Regional Court (LG) Mühlhausen (judgment of 18.06.2015 – HK O 98/14) did not share this view and dismissed the action. On appeal, the Wettbewerbszentrale achieved at least partial success.

Court decision – manufacturer logo misleading

The Higher Regional Court (OLG) Jena ruled by judgment of 25.05.2016 – 2 U 514/15 (Press release of 08.06.2016) that the advertising on the façade of the car dealership as well as on the business premises and letterheads was misleading and ordered it to be discontinued.

By using the complete brand logo, the public is made to believe that the car dealership has a special contractual relationship with the manufacturer and is its authorized dealer. In this way, the limits of permitted, restrained use of the brand name have been exceeded. Slight colour deviations are not material to the consumer. The use of the manufacturer logo "HYUNDAI" was particularly suited to mislead in the present case because the business premises also advertised other brands for which the car dealership was actually an authorized dealer.

The court, however, considered the note "HYUNDAI Spezialwerkstatt" to be permissible, since the average consumer would not expect the car dealer to be integrated into HYUNDAI's distribution organisation. It would merely be assumed that the car dealer possessed the appropriate knowledge in the repair of the stated vehicle types, which, however, was the case in the present matter.

Conclusion

The mention of a brand in the course of sales offers is generally not prohibited. However, if the manufacturer logo is used as extensively as, for example, brands of automobile manufacturers in whose distribution organisation the respective dealer is integrated, the misleading impression arises that this is also the case with the advertised manufacturer. In this respect, not only competition associations but also competitors can demand that such advertising measures be discontinued.