Infringement of competition law due to doctoral title in company name

Under certain circumstances, it is legally permissible to continue a company name even when the namegiving shareholder withdraws from the company. However, what is the legal position if a company's name contains a doctoral title, but a person with a doctoral title is not employed in the specific company but rather in its parent company? Does this then constitute an act of unfair competition and misleading conduct?

A limited liability company operates dental medical care centres. The sole shareholder and managing director of the limited liability company is a doctorate-holding dentist. One of the care centres was operated under the designation "Dr. Z Medical Care Centre R." At times, no doctorate-holding dentist was employed there.

A dental district association considered this to be an act of unfair competition and misleading conduct and filed an action for injunction before the Regional Court (LG) Düsseldorf. The Regional Court granted the claim. The Higher Regional Court (OLG) Düsseldorf dismissed the claim. The association filed an appeal against the judgment of the appellate court.

The Federal Court of Justice (BGH) decision on the doctoral title in a company name

With judgment of 11.02.2021 – "Dr. Z" (Az. I ZR 126/19 )the Federal Court of Justice (BGH) set aside the judgment of the Higher Regional Court (OLG) Düsseldorf and remitted the matter for reconsideration and decision.

The Federal Court of Justice (BGH) decided that an unfair company designation exists if only a shareholder of the parent company, but not the medical management of the care centre, possesses a doctoral title.

In the court's view, the examination conducted by the Higher Regional Court (OLG) Düsseldorf neglected the particularly stringent requirements for ruling out the risk of misleading conduct in the context of health-related advertising. These requirements also apply to the competition law assessment of the business name of a company that provides health-related services.

The relevant public understands "Dr. Z" as an abbreviation for a doctorate-holding business owner and regards the doctoral title as evidence of special scientific qualification that goes beyond a university degree. It is to be expected that in the daily operation of a dental medical care centre, treatments will occur in which patients expect to benefit from the special scientific qualification of the dentist as evidenced by the doctoral title.

Conclusion

An act of unfair competition and misleading conduct may exist if the business name contains a doctoral title, even though no person with a doctoral title is employed in the specific company. The fact that a person with a doctoral title is employed in the parent company is insufficient in this regard. It is permissible to add a clarifying note to the company designation in order to avoid an act of unfair competition and misleading conduct.