Calculating damages for trademark infringements based on the license analogy principle

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A license analogy is one way of calculating claims for damages in response to trademark infringements. If a registered trademark is violated, those concerned can turn to an IP lawyer for advice and assistance in enforcing and fending off claims. Fortunately, the protection of intellectual and industrial property is one of commercial law firm MTR Legal Rechtsanwälte’s areas of expertise.

Calculating damages in the context of IP law according to the license analogy principle means that the amount of compensation is based on the license fees that would have been incurred in the case of proper use. While this method of calculating damages plays a particularly prominent role in copyright law, it can also be applied to trademark infringements. An attorney who practises IP law can provide counsel.

Case in point: a ruling by Stuttgart’s higher regional court – the Oberlandesgericht (OLG) Stuttgart – on damages claims for trademark infringements in relation to a scaffolding system. The plaintiff, a scaffolding manufacturer, had previously registered a word mark for its scaffolding. A competitor later advertised in promotional emails that its scaffolding parts could be mixed with the trademark owner’s scaffolding, the name of which was mentioned in the emails.

To the plaintiff, this decision to use the name of its scaffolding in the promotional emails amounted to an infringement of its registered word mark, and it therefore asserted claims for damages. Stuttgart’s regional court – the Landgericht (LG) Stuttgart – subsequently awarded the plaintiff damages, which the court quantified at 8 percent of net turnover by applying the license analogy principle.

The case was then appealed to the OLG Stuttgart, which upheld the claim for damages but ruled that a hypothetical royal rate of 5 percent was appropriate (case ref.: 2 U 34/20). The estimate had to be based on general criteria, and even in cases involving particularly well-known brands, it is very rare for the percentage to exceed 5 percent.

The OLG Stuttgart also confirmed that the defendant’s use of the same sign as that of the owner of the trademark gave rise to a high likelihood of confusion. According to the court, the third-party trademark had been used to entice recipients to open the emails.

Violating copyrights or trademark rights can have serious legal consequences, which is why it is crucial to consult a lawyer who specializes in IP law.

MTR Legal Rechtsanwälte advises on all aspects of industrial and intellectual property.

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