Don't call it Schnitzel?

The Higher Regional Court (OLG) Frankfurt am Main recently had to deal with a schnitzel. The processed meat product of company T., advertised with the slogan "Don't call it Schnitzel", was the subject of legal proceedings in which the manufacturing company sought to defend itself against a competitor with a cease-and-desist letter and a claim for the signing of a binding declaration of discontinuance on the basis of a registered design and supplementary competition law protection, because the competitor brought a similar product onto the market.

Company T. developed a food product made of breaded meat in the shape of a slice of toast, which is prepared in commercially available toasters. This outer design of the processed meat had also been

protected by company T. by means of a design (so-called design protection). A competitor then brought a schnitzel onto the market that was also prepared in toasters and was very similar to the original product in its external design. Company T. was therefore of the opinion: "Don't call it Schnitzel!"

By means of a cease-and-desist letter and the subsequent lawsuit, company T. now attempted to prohibit the competitor from manufacturing and distributing meat of a corresponding shape. It was of the opinion that the competitor's schnitzel could be confused with its own product. In doing so, the competitor would exploit the market position and good reputation of the "original product" in order to increase its own profits through additional sales. Furthermore, the shape of the schnitzel was protected by a design.

Court's decision

The OLG Frankfurt a.M. decided in itsjudgment of 02.02.2010 – Az. 6 U 236/09, that in the present case there was no right to an injunction on the part of company T.

With regard to design-related claims, the competitor was able to credibly demonstrate that at the time of filing the design application, company T.'s schnitzels had already been made accessible to the public prior to filing the design application. Thus the shape of the schnitzel registered by company T. was no longer new, and therefore an essential requirement for design protection was not met.

The design of company T. also lacked the required individual character. The conditions for competition law protection against imitation are not met because a risk of confusion with regard to the external features of the product manufactured by company T. was unavoidable. In order to manufacture a toastable schnitzel, the processed meat pieces must fit into commercially available toasters. As a result, the competitor was very limited in the design of the external shape. Under these circumstances, the competitor also could not be accused of inappropriate exploitation or impairment of the reputation of the "original product".

In the context of the competition law assessment, the lower court was also correct in assuming that the product idea first implemented by the applicant – which is not subject to any special rights protection – of providing consumers with breaded processed meat for preparation in a commercially available toaster, as such is excluded from supplementary competition law protection from the outset. This applies regardless of what market awareness the applicant has meanwhile gained with its product.

Even if one were to assume in favour of company T. that parts of the relevant public currently tend to conclude that the breaded meat in the form of a slice of toast is from a particular manufacturer due to the novelty of the offered product and the advertising "Don't call it Schnitzel!" carried out for it, the attacked imitation only poses the risk of an avoidable deception as to origin if the competitor had failed to ensure differentiation between the competing products through reasonable modifications, for example in the packaging. However, this was not the case here.

The fact that the avoidability of deception as to origin is lacking under competition law is also confirmed by trademark law considerations. Fundamentally, the shape of a product is capable of trademark protection. However, this does not apply if the shape of the product is necessary to achieve a technical effect, it being sufficient that the essential functional features of the shape of a product are attributable solely to a technical effect, even if the technical effect in question can also be achieved by other shapes.

Ultimately, company T. could not convince the OLG Frankfurt under any of the aspects discussed. In this case, the competitor was therefore entitled to say in good faith: "Let's call it Schnitzel!"

Conclusion

The protection situation, in particular the novelty and individual character of a new product, should be evaluated before a new product is brought onto the market. With good legal advice and the correct strategy developed with the consultant, simple mistakes can be avoided and the new product can achieve optimal protection.

When assessing whether the risk of confusion caused by the external appearance of a product is avoidable within the meaning of competition law, it must be taken into account that a product idea itself is never subject to supplementary protection. If the shape of the product is determined by necessities, the required distinctive character in competition law is regularly lacking.