Service partner = Contractual partner?

The Federal Court of Justice (BGH) in Karlsruhe had to decide on the unfair competition aspect of an automobile dealership's advertising, which advertised a motor vehicle with a registration several months old as a new car and furthermore presented itself as a contractual partner of an automobile manufacturer, although it was merely a service partner but not an authorised dealer of Ford.

The automobile dealership L. in Görlitz is a service partner of Ford. In its dealership a Ford Fiesta was offered with advertising inscriptions

"New car" - "German model with registration 03/06 ... Warranty commences 03/06" and
"Autohaus L. – Your Ford Contractual Partner"

The dealership had previously purchased the motor vehicle with a registration five months old from an authorised dealer of the automobile manufacturer Ford. A competitor of Autohaus L. in Görlitz considered this advertising to be misleading, as it conveyed to the public the impression that the dealership was an authorised dealer of Ford. Furthermore, it was considered misleading to advertise a motor vehicle with a registration five months old as a "new car". The competitor issued a warning for the unfair competition infringements and demanded the cessation of such advertising.

Court's decision
In its decision of 17.03.2011 – Az. I ZR 170/08 the Federal Court of Justice (BGH) ruled that through the use of the term "contractual partner" the addressed public would gain the incorrect impression that the advertiser was an "authorised dealer" of an automobile manufacturer. This constituted a misleading statement relevant to competition law affecting the addressed customer base, which Autohaus L. was required to cease.

The advertising of a vehicle registered approximately five months earlier as a new car was likewise misleading and therefore impermissible. The addressed public circle would assume when advertising new cars that, in the event of a purchase, they could avail themselves of all the advantages of a new vehicle, in particular an unrestricted manufacturer's warranty. In this expectation they would be deceived if the warranty for the advertised vehicle had already been running for some time. The reference to the date of first registration was not sufficient to dispel the misleading impression created by the prominent advertising statement "new car".

Conclusion

The decision of the BGH is interesting in that Autohaus L. had not concealed the fact that the advertised car had already been registered five months earlier, but rather expressly stated this in its advertising. The car dealer also did not claim to be an "authorised dealer" of Ford. The dealership merely stated that it was a "contractual partner" of Ford, which also corresponded to the facts. All of this, however, could not convince the court, as there was a danger of misleading the public in the overall assessment. The public regularly associates a certain conception with the keyword "new car" and readily confuses "contractual partner" with "authorised dealer".

This case demonstrates very clearly that it may be advisable to discuss the scope of advertising permitted under competition law with an appropriately qualified lawyer.