News and Press - Lawyers Attorneys MTR Rechtsanwälte Germany - Cologne Berlin Bonn Düsseldorf Frankfurt Hamburg Munich Stuttgart https://www.mtrlegal.com/en/ News and Press releases of Lawyers Attorneys MTR Rechtsanwaltsgesellschaft mbH Germany Cologne Berlin Bonn Düsseldorf Frankfurt Hamburg Munich Stuttgart en MTR Rechtsanwaltsgesellschaft mbH Mon, 04 Jul 2022 08:50:08 +0200 Mon, 04 Jul 2022 08:50:08 +0200 TYPO3 news-467 Wed, 29 Jun 2022 17:12:13 +0200 BGH awards damages for test seal trademark infringement https://www.mtrlegal.com/en/news-and-press/detail/news/bgh-awards-damages-for-test-seal-trademark-infringement.html Manufacturers, though generally keen to cite test verdicts and seals of approval as a means of establishing the quality of their products, are no longer allowed to use a test logo if a more recent test has since been conducted.

One of the key indicators of the quality of a product for consumers are verdicts and seals of approval from tests conducted by respected organizations, which is why manufacturers like to make use of them. However, the use of a test logo is deemed to be improper if the results of a more recent test featuring modified test criteria have since been made available. That was the verdict of the Bundesgerichtshof (BGH) – Germany’s Federal Supreme Court – in a judgment from December 16, 2021 (case ref.: I ZR 201/20). We at the commercial law firm MTR Rechtsanwälte note that improper use of a test verdict or seal of approval may entitle the trademark owner to claim damages.

The plaintiff in this case was the publisher of a consumer magazine that thoroughly examines products and allows the manufacturers to use its test seal under a free license agreement. The test logo in question has been registered as an EU trademark since 2012, with the plaintiff holding the trademark rights. The license agreement stipulated that use of the test logo would no longer be permitted once a more recent test had been conducted and the results become outdated.

A manufacturer was awarded a test seal for a toothpaste that was not included in a subsequent test with modified test criteria, but this did not stop one retailer from promoting it using the test seal. This was challenged by the plaintiff, whose lawsuit was ultimately successful before the BGH.

The Karlsruhe judges ruled that this use of the test logo amounted to unfair exploitation of the combined word and figurate mark’s reputation, noting that while the toothpaste had indeed been awarded the seal in one test, this was now out of date with the release of the more recent test with modified criteria. The BGH held that advertising with outdated test results is misleading if new test results have since been made available. The plaintiff was said to have a legitimate interest in the outdated test results no longer being used for promotional purposes lest consumers lose confidence in the test seal and its reputation be damaged as a result.

The Court went on to conclude that although it was not possible to establish that the plaintiff had suffered actual harm or loss, and therefore no damages could be calculated on the basis of a license analogy, the plaintiff could nonetheless claim damages for infringement of its trademark.

Lawyers with experience in the field of trademark law can provide counsel.

For more information:

https://www.mtrlegal.com/en/legal-advice/ip-law/trademark-law.html

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MarkenrechtPressemitteilungen
news-465 Fri, 24 Jun 2022 16:53:49 +0200 Marc Klaas at MTR Rechtsanwälte ranked among Germany’s top M&A lawyers in 2022 https://www.mtrlegal.com/en/news-and-press/detail/news/marc-klaas-at-mtr-rechtsanwaelte-ranked-among-germanys-top-ma-lawyers-in-2022.html MTR Rechtsanwälte’s very own Marc Klaas has once again been recognized by the German business newspaper Handelsblatt as one of Germany’s top lawyers in the field of mergers and acquisitions (M&A).

Handelsblatt collaborates with the U.S. publisher Best Lawyers to produce annual rankings of Germany’s best lawyers. The 2022 edition sees Marc Klaas at MTR Rechtsanwälte listed among the top M&A lawyers, an honor that Marc is not unfamiliar with, having been recognized as one of Germany’s best lawyers in this category by Handelsblatt in the previous two years as well.

Although this is already the third time he has been featured in the rankings, Marc is not taking the recognition for granted, viewing it instead as both an incentive and a challenge to maintain and build upon the high standards of service and support he provides to his clients. Marc also understands that this is only possible as part of a team. He sees his inclusion in the ranking as not just a personal honor but also as a testament to the entire team at MTR Rechtsanwälte, which has succeeded in building on the firm’s high standards of legal service despite the difficulties presented by the coronavirus pandemic.

One thing that makes inclusion in the list of Germany’s top lawyers so special is that it speaks to the high esteem in which those recognized are held by lawyers from other law firms. The rankings are based on annual surveys of law firms conducted by Best Lawyers, with lawyers giving their assessment of the quality of the work of their colleagues at other law firms. One of the ways in which this esteem is expressed is in specifying which lawyer they would recommend if they themselves were not in a position to assist a client.

This endorsement demonstrates a high level of trust and confidence, and Marc and his team will continue to do their utmost to justify this and to meet the high expectations other have of them.

For more information:

https://www.mtrlegal.com/en/legal-advice/company-law.html

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GesellschaftsrechtPressemitteilungen
news-462 Fri, 24 Jun 2022 10:51:41 +0200 GDPR violations met with a heavy fine from Bremen’s data protection commissioner https://www.mtrlegal.com/en/news-and-press/detail/news/gdpr-violations-met-with-a-heavy-fine-from-bremens-data-protection-commissioner.html The Bremer Landesbeauftragte für Datenschutz und Informationsfreiheit (LfDI) – Bremen’s Federal Commissioner for Data Protection and Freedom of Information – has issued a housing association with a fine in response to violations of the General Data Protection Regulation (GDPR).

One of the aims of the Regulation is to strengthen the protection of sensitive personal information by requiring businesses to comply with more demanding data protection standards, with violations of the GDPR potentially leading to severe penalties.

We at the commercial law firm MTR Rechtsanwälte can report on a real estate firm in Bremen that recently found itself faced with a fine to the tune of around 1.9 million euros for violating the GDPR. The penalty was announced and imposed by Bremen??’s Federal Commissioner for Data Protection and Freedom of Information on March 3, 2022.

The commissioner detailed in a press release how the housing association had processed data from more than 9,500 prospective tenants without a legal basis. This included storing information that was not required for the conclusion of the lease agreement, e.g., regarding hairstyles and body odor. The commissioner also reported that data of a sensitive and personal – and therefore protected – nature relating to ethnic origin, religious affiliation, sexual orientation, and health had been processed.

Citing the extreme severity with which the fundamental right to data privacy had been violated, the commissioner contended that they would have been justified in issuing a substantially larger fine than the approximately 1.9 million euros that was imposed pursuant to Article 83 of the GDPR. Indeed, it was only by cooperating fully and demonstrating a willingness to come clean that the company was able to avoid this outcome. It also made efforts to mitigate the damage. Additionally, the company wants to ensure that violations of this kind or not repeated.

The extent of the fines in cases involving violations of the GDPR are to be determined on a case-by-case basis, with Art. 83(2) GDPR specifying the nature, gravity, and duration of the violation as the key criteria here. The Regulation provides for the possibility of fines of up to ten million euros or up to 2% of total worldwide annual turnover, though the penalty can be doubled in the case of particularly serious violations.

It is therefore in the interests of businesses to give due consideration to data protection and to comply with the GDPR. Our team of lawyers includes data protection experts who can provide counsel.

For more information:

https://www.mtrlegal.com/en/legal-advice/it-law.html

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IT-RechtPressemitteilungen
news-459 Mon, 20 Jun 2022 11:51:04 +0200 OLG Hamburg finds advertisement featuring superlative language such as “highest price” unlawful https://www.mtrlegal.com/en/news-and-press/detail/news/olg-hamburg-finds-advertisement-featuring-superlative-language-such-as-highest-price-unlawful.html Advertisements that make reference to the “best price” or which make use of similar superlative language may be misleading and in breach of competition law. That was the takeaway from a ruling of the Oberlandesgericht (OLG) Hamburg – the Higher Regional Court of Hamburg – from December 9, 2021 (case ref.: 5 U 180/20).

Though advertising is one of the main ways in which businesses market their products and services and present them in a favorable light, caution is advised when it comes to the use of superlative language, e.g., in the form of “best price”, “highest price”, and the like. We at the commercial law firm MTR Rechtsanwälte note that this kind of advertising has the potential to mislead consumers and is therefore anticompetitive.

One such case that demonstrates this recently came before the Hanseatic Higher Regional Court of Hamburg. The proceedings were the result of a lawsuit filed by a competition association that took issue with a real estate agent’s advertisement that promised to sell houses at the highest price.

The competition association argued that a large share of the target audience would infer from the phrase “highest price” that the provider behind the advert occupies a leading or unique position in the market. Consumers would assume that said provider will obtain a better price for their real estate than other real estate agents, i.e., “highest price” is not understood to mean simply that it is the same price that would be obtained by other companies.

The brokerage company on the receiving end of the lawsuit rejected the notion that its advertising gave the dishonest impression that it occupied a unique or leading position, arguing that consumers naturally expect real estate to be sold at the “highest price”. The company contended that the content of this kind of promotional material is not objectively verifiable and that it does not invite consumers to take it at face value. At most, it lawfully points to the company being part of an elite group in this space.

This line of reasoning was not followed by the OLG Hamburg, which found the advertising in dispute to be misleading and unlawful. The phrase “highest price” was not merely advertising hyperbole but a verifiable statement. The Court noted that the price obtained from selling a house is a readily measurable variable. As such, the advertisement was said to include a statement within the meaning of Section 5(1) Sentence 2 of the German Act Against Unfair Competition [Gesetz gegen den unlauteren Wettbewerb, UWG]. Moreover, the phrase “highest price” gives the impression that the broker will obtain a better selling price than all competitors, it being common for superlatives to be used to indicate a unique position. Ultimately, the OLG concluded that the advertisement was in breach of the UWG.

Our lawyers are experts in the field of antitrust and competition law and can provide counsel.

For more information:

https://www.mtrlegal.com/en/legal-advice/competition-law.html

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WettbewerbsrechtPressemitteilungen
news-456 Wed, 15 Jun 2022 17:01:15 +0200 A major milestone on the road towards a European unitary patent https://www.mtrlegal.com/en/news-and-press/detail/news/a-major-milestone-on-the-road-towards-a-european-unitary-patent.html The German government’s ratification of the Protocol on the Provisional Application of the UPC Agreement represents a major milestone on the road towards a Unified Patent Court.

The European unitary patent is intended to simplify patent law within the European Union, potentially saving businesses time and money. We at the commercial law firm MTR Rechtsanwälte note that this will be achieved through any holder of a European patent being able to apply for unitary effect by submitting a single request as opposed to having to submit individual applications in each EU member state as has been the case to date.

The introduction of this new European unitary patent regime will also see the establishment of a Unified Patent Court, a development which has been met with resistance in a number of countries, including Germany. And yet, despite this opposition, there has recently been another important development since the Bundesverfassungsgericht – Germany’s Federal Constitutional Court – rejected two petitions for a preliminary injunction directed against the Act that was adopted for the purposes of ratifying the EU [UPC] Agreement on a Unified Patent Court (case ref. BvR 2216/20 and 2 BvR 2217/20): on September 27, 2021, the German government ratified the Protocol on the Provisional Application of the UPC Agreement – a major milestone on the road towards a European unitary patent.

The role of the Unified Patent Court will be to rule on infringements and the validity of patent titles in a single proceeding, with the aim being to provide legal certainty for the companies involved in a manner that is both quick and cost-effective, and to strengthen the protection of inventions, particularly for the benefit of small and medium-sized companies.

The first step, however, is to establish the organizational capacity of the Unified Patent Court. Once this begins to take shape, Germany will ratify the Agreement, becoming the 16th signatory country to do so and making it possible for the Agreement to enter into force. It is expected that this will be the case in mid-2022. Only then will jurisdiction be transferred to the Unified Patent Court.

Disputes concerning infringements of patent law, the validity of patents, as well as appeals against decisions of the European Patent Office will then be decided by the Unified Patent Court. Courts of first instance shall also be established in the signatory countries.

Our lawyers are well versed in IP law and can advise on all things patent-related.

For more information:

https://www.mtrlegal.com/en/legal-advice/ip-law.html

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IP RechtPressemitteilungen
news-452 Fri, 10 Jun 2022 08:47:14 +0200 Federal Constitutional Court rejects requests for an injunction against the Unified Patent Court Act https://www.mtrlegal.com/en/news-and-press/detail/news/federal-constitutional-court-rejects-requests-for-an-injunction-against-the-unified-patent-court-act.html A ruling from June 23, 2021 by the Bundesverfassungsgericht – Germany’s Federal Constitutional Court – saw the Court reject two petitions for a preliminary injunction directed against the Act that was adopted for the purposes of ratifying the EU Agreement on a Unified Patent Court (case ref. 2 BvR 2216/20 and 2 BvR 2217/20).

The European unitary patent is intended to simplify patent law within the EU, saving companies time and money. But despite the fundamental consensus that exists, there have been teething problems. We at the commercial law firm MTR Rechtsanwälte can report that the reason for this is that the European regulation also seeks to establish a Unified Patent Court, and there is resistance to this in Germany, where the Bundesverfassungsgericht declared the bill to ratify the Agreement null and void back in early 2020 because it was not passed by the two-thirds majority required in the Bundestag.

The legislation made its way through the Bundestag and the Bundesrat – Germany’s lower and upper houses of parliament, respectively – for a second time in late 2020, only to be put on hold again by new claims of unconstitutionality. However, by dismissing the two petitions for a preliminary injunction against the legislation, the Bundesverfassungsgericht has now cleared the way for its implementation. The Court ruled that the complaints were inadmissible as the complainants had failed to sufficiently substantiate a possible violation of their fundamental rights.

The Unified Patent Court shall have jurisdiction to hear disputes concerning patent infringements, the validity of patents, as well as appeals against decisions of the European Patent Office. Courts of first instance will be established in the signatory countries in addition to a court of appeal based in Luxembourg. Germany’s failure to ratify the Agreement on a Unified Patent Court has to date been a roadblock to its entry into force.

Every EU member state has signed up to the European unitary patent except for Spain and Croatia. The new regime will allow any holder of a European patent to also apply for unitary effect for the patent across all participating countries by submitting a single request instead of having to submit individual applications for patent protection, thus saving time and money. According to the European Commission, the costs associated with registering a patent could be reduced by as much as 32,000 euros as a result. The unitary patent regime is currently expected to enter into force sometime in 2022.

Lawyers with experience in the field of IP law can advise on all things patent-related.

For more information:

https://www.mtrlegal.com/en/legal-advice/ip-law.html

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IP RechtPressemitteilungen
news-449 Mon, 06 Jun 2022 10:30:53 +0200 BFH rules on how to determine typical market rates for intra-group loans https://www.mtrlegal.com/en/news-and-press/detail/news/bfh-rules-on-how-to-determine-typical-market-rates-for-intra-group-loans.html The Bundesfinanzhof (BFH) – Germany’s Federal Fiscal Court – ruled on May 18, 2021 that the preferred method for determining whether the interest rate on an intra-group loan reflects the typical market rate is to compare prices (case ref.: I R 4/17).

If a company loans money to another company that is part of the same corporate group, the interest rate may be used to shift profits from one group member to a sister company. If both foreign and domestic companies are part of the group, this may also be used to take advantage of lower tax rates at the registered office of the sister company.

We at the commercial law firm MTR Rechtsanwälte note that these kinds of tax arrangements are not what the legislature intended, which is why companies cannot arbitrarily determine the rate of interest; certainly, the tax office only recognizes interest at the rate that would have been agreed between non-related companies. The Bundesfinanzhof has now ruled on the method that the tax authorities should use to make this kind of arm’s length comparison.

In the case in question, a company based in Germany that was part of corporate group had taken out several loans with a company in the Netherlands, with the latter acting as a group financing company. Both the tax office and the fiscal court concluded that the interest rates that had been agreed for the loans were too high, having carried out an arm’s length comparison using the cost-plus method.

This was the wrong approach according to the BFH, which held that the preferred method for determining whether the rate of interest agreed on an intra-group loan reflects the typical market rate is the price comparison method, according to which the interest rate that has been agreed is compared with interest rates in comparable transactions between independent companies that do not belong to the same group. The Court went on to clarify that it is only in cases where this kind of price comparison is not possible that the appropriate rate of interest can be determined using the cost-plus method, which, according to the BFH, is based on the costs incurred by the lender plus a reasonable profit mark-up.

The creditworthiness of the borrower is also an important factor in determining the appropriate rate of interest. The BFH noted in this regard that, in principle, it is the creditworthiness of the individual company and not of the entire group that must be taken into account.

Experienced lawyers can be trusted to provide counsel and assistance should disputes arise with the authorities.

For more information:

https://www.mtrlegal.com/en/legal-advice/tax-law/tax-dispute.html

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SteuerstreitPressemitteilungen
news-445 Wed, 01 Jun 2022 07:47:17 +0200 Annual general meetings and other shareholder’s meetings can still be held virtually https://www.mtrlegal.com/en/news-and-press/detail/news/annual-general-meetings-and-other-shareholders-meetings-can-still-be-held-virtually.html Following a resolution by the Bundestag – Germany’s lower house of parliament – general shareholder’s meetings can continue to be conducted virtually until August 31, 2022 due to the coronavirus pandemic, a measure that is intended to provide planning certainty.

The German government decided back in 2020 in the wake of the coronavirus pandemic that general meetings could also be held virtually, thus ensuring that companies retain the capacity to act and make decisions. We at the commercial law firm MTR Rechtsanwälte can report that this decision by the Bundestag extends the option to conduct general meetings virtually until the end of August 2022.

Pandemic-related restrictions on meetings are also to be expected in the coming months. To ensure that certainty surrounding planning is based on a sound legal foundation, measures to facilitate meetings have been extended for stock corporations as well as other legal entities such as limited liability companies, cooperatives, associations, political parties, foundations, and homeowners’ associations. This means, for instance, that general meetings can continue to be held virtually.

Notwithstanding these measures, the legislature has added the caveat that the option to conduct general meetings virtually should only be exercised if this appears necessary in light of the prevailing state of affairs under the pandemic. In principle, however, it is left at the discretion of the board of directors to decide whether the meeting is held virtually or in person, it being necessary to take into account, on the one hand, the interests of the shareholders, partners, etc., and, on the other hand, to be mindful of the latest regulations and the aim of preventing the transmission of COVID-19.

If this extension had not been granted, the previous requirement for meetings to be conducted in person would have come back into effect from the beginning of 2022, something that is difficult to image given how the pandemic is currently developing.

The extension to the transitional arrangements is not bound up with substantive changes. Parliament already made the decision back in late 2020 to strengthen the rights of shareholders in connection with virtual general meetings, including granting them the right – as opposed to what was previously merely an option – to ask questions. At the same time, the board no longer has the discretion to decide whether or not to answer these questions.

All this means that companies and also foundations and associations can continue to hold purely virtual as well as hybrid meetings and make decisions, even if this is not enshrined in their respective articles of association.

Lawyers with experience in the fields of commercial law and company law can provide counsel.

For more information:

https://www.mtrlegal.com/en/legal-advice/corona.html

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CoronaPressemitteilungen
news-443 Mon, 30 May 2022 12:14:18 +0200 Pandora Papers: Voluntary declaration for tax evasion can lead to exemption from punishment https://www.mtrlegal.com/en/news-and-press/detail/news/pandora-papers-voluntary-declaration-for-tax-evasion-can-lead-to-exemption-from-punishment.html Ever since the Pandora Papers were released back in 2021, the tax evaders exposed by the leak have been counting the days until their discovery by the authorities. In Germany, it remains possible to submit a voluntary declaration in order to avoid penalties.

The Pandora Papers represent the latest major tax haven leak since the Panama Papers were published in 2016. Almost 12 million documents were passed on anonymously to the International Consortium of Investigative Journalists (ICIJ). These contain confidential information from no less than 14 providers who have assisted their clients in setting up shell companies and the like. But the veil of anonymity over these dealings has now been lifted. More than 600 journalists from respected media outlets from across the world have sifted through the documents and will be reporting on them bit by bit. The Pandora Papers appear to include data from the 1970s all the way up to 2021.

It is already well known that numerous politicians and celebrities have been implicated in these explosive documents. What is less widely known, however, is that taxpayers who have participated in offshore dealings and have failed to report the taxable income to the German tax authorities are also likely to come under pressure to explain themselves. We at the commercial law firm MTR Rechtsanwälte note that in these cases it is worth examining whether a voluntary declaration could still lead to an exemption from punishment.

Involvement in offshore dealings or shell companies is not in and of itself punishable. Indeed, many of the transactions published in the Pandora Papers appear to be legal, as has been reported by the Süddeutsche Zeitung. It is when these dealings are used for money laundering purposes or when taxable income is registered in tax havens and not reported to the relevant tax offices that they become punishable.

Tax dodgers resident in Germany are also increasingly feeling the pressure since the release of the Pandora Papers. The first step they can take is to have someone review whether they have properly declared their taxes and, if necessary, can still submit a voluntary declaration for tax evasion in order to avoid penalties. It is essential that the declaration be submitted in a timely manner, i.e., before the tax evasion is discovered by the authorities, and that it be comprehensive. Additionally, it must not contain any errors if it is to be capable of leading to an exemption from punishment.

Experienced lawyers can be trusted to provide discrete support in preparing a legally compliant voluntary declaration.

For more information:

https://www.mtrlegal.com/en/legal-advice/tax-law/voluntary-disclosure.html

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SelbstanzeigePressemitteilungen
news-440 Wed, 25 May 2022 09:42:25 +0200 Voluntary declaration for tax evasion still possible despite the exchange of financial data with Turkey https://www.mtrlegal.com/en/news-and-press/detail/news/voluntary-declaration-for-tax-evasion-still-possible-despite-the-exchange-of-financial-data-with-tur.html As part of the ongoing fight against tax evasion, the German tax authorities can expect to receive information regarding foreign accounts at the end of September, with the country of Turkey having signed up for the first time last year. And yet it is still possible to submit a voluntary declaration.

Financial data is routinely shared among the participating countries in late September within the framework of the automatic exchange of information (AEOI). More than 100 countries have signed up to this regime, which sees them receive financial information relating to their taxpayers who maintain foreign accounts. Last year was the first year in which Turkey sent data to the German tax authorities. Anyone who is liable to pay tax in Germany and yet fails to declare income in foreign accounts – for instance, in Turkey – is guilty of tax evasion. While it is no longer possible to conceal this untaxed income from the German tax authorities thanks to the automatic exchange of information, we at the commercial law firm MTR Rechtsanwälte can report that it is still possible to submit a voluntary declaration in order to avoid penalties.

The AEOI facilitates the transfer of extensive data pertaining to bank customers who are resident abroad. In addition to the name, address, and tax identification number of the individuals concerned, this also notably covers the account balance, income from returns on capital, and proceeds from the sale of shares, bonds, and other securities. In Germany, the data is initially transmitted to the Federal Central Tax Office (the Bundeszentralamt für Steuern) before being passed on to the relevant tax offices.

Those who have failed to correctly declare this income in Germany may not only have to contend with demands for retrospective payment but also with charges of tax evasion, which can lead to severe penalties such as fines and even custodial sentences.

Anyone who has untaxed income in foreign accounts can avoid these penalties by submitting a voluntary declaration. However, for this to be effective, the declaration must be both comprehensive and have been submitted in a timely manner, i.e., before the offenses are discovered by the tax authorities. Comprehensive means that the voluntary declaration must include any and all information from the past ten years that is relevant from a tax perspective.

The requirements that need to be fulfilled in order for a voluntary declaration to lead to an exemption from punishment are demanding, it being almost impossible for those without expert knowledge and experience to meet them on their own. At the same time, it is worth noting that even minor errors can render a voluntary declaration ineffective.

Lawyers with experience in the field of tax law know what information the voluntary declaration needs to include for it to be effective, and they can take the necessary steps with this end in mind.

For more information:

https://www.mtrlegal.com/en/legal-advice/tax-law/voluntary-disclosure.html

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PressemitteilungenSteuerrecht
news-427 Fri, 29 Apr 2022 08:58:18 +0200 BFH: Capital gains attributable to home office remain tax-exempt https://www.mtrlegal.com/en/news-and-press/detail/news/bfh-capital-gains-attributable-to-home-office-remain-tax-exempt.html The capital gains generated from the sale of an owner-occupied property that are attributable to a home office are tax-exempt. That was the verdict of the Bundesfinanzhof (BFH), Germany’s Federal Fiscal Court (case ref.: IX R 27/19).

We at the commercial law firm MTR Rechtsanwälte can report that in instances where a property which was used for personal residential purposes is sold, the capital gains do not usually have to be taxed. This is also true for the portion of the capitals gains attributable to a home office that was offset against income tax in previous years. That was the verdict of the Bundesfinanzhof in a ruling from March 1, 2021. The Court found that the use of a home office falls within the definition of personal residential use and that said home office is thus exempt from taxation.

This decision saw the BFH go against a letter from Germany’s Federal Ministry of Finance from October 2000, according to which a home office is not used for residential purposes.

The case before the BFH concerned a teacher who had sold a condominium that belonged to her and in which she had personally lived in for around five years. She had used one of the rooms as a home office and had claimed income-related expenses in connection with this, and these were recognized by the competent tax office. Although she had sold her condominium after five years, i.e., within the ten-year holding period, her profits from the sale were tax-exempt because she had personally made residential use of the property. And yet the tax office sought to withhold income tax on the proportion of the profits attributable to the study, pointing out that the sale had taken place within the ten-year speculation period.

This was successfully challenged by the woman in question, with both the Finanzgericht Baden-Württemberg – the Fiscal Court of Baden-Württemberg – at first instance and later the BFH ruling that the capitals gains on the study were also tax-exempt.

The BFH noted that while the sale of the property within the ten-year holding period constituted a private sales transaction, the profit is not taxed if the property was used exclusively for personal residential purposes, or if the property was used for personal residential purposes in the year it was sold and in the previous two years. The Court held that the use of a home office falls within the definition of personal residential use, as it too would be used regularly to a limited extent for personal residential purposes.

Those who find themselves caught up in a tax dispute with the authorities can turn to lawyers with experience in the field of tax law.

For more information:

https://www.mtrlegal.com/en/legal-advice/tax-law/tax-dispute.html

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SteuerstreitPressemitteilungen
news-423 Tue, 19 Apr 2022 10:22:39 +0200 EGC: Not possible for the hissing sound from a beverage can to be registered as a trademark https://www.mtrlegal.com/en/news-and-press/detail/news/egc-not-possible-for-the-hissing-sound-from-a-beverage-can-to-be-registered-as-a-trademark-1.html The hissing sound that can be heard when opening a beverage can, followed by a pause and a fizzing sound, cannot be registered as a sound mark. That was the verdict of the General Court (EGC) – a constituent court of the Court of Justice of the European Union – in a ruling from July 7, 2021 (ref.: T-668/19).

While many consumers are no doubt familiar with the hissing sound one hears when opening a beverage can, followed by a brief moment of silence and then a fizzing sound, we at the commercial law firm MTR Rechtsanwälte can report that this sequence of sounds cannot be protected as a trademark. That was the verdict of the General Court, which concluded that there was a lack of distinctive character necessary for trademark registration.

A beverage producer had tried registering this sequence of sounds in audio file format as an EU sound trademark with the European Union Intellectual Property Office (EUIPO). Registration was sought for various different canned beverages, but the application was rejected by the EUIPO due to a lack of distinctive character required for registration as a trademark.

This decision was upheld by the General Court, which first sought to make it clear that the criteria for determining the distinctiveness of sound marks are no different from those that apply to other categories of marks. A sound mark thus needs to have a certain resonance by which consumers can recognize it as a trademark and not merely as a functional element without any intrinsic characteristics of its own. Consumers must be able to establish a link to the mark’s commercial origin from merely perceiving the mark without any connection to other elements, in particular words and images. The Court went on to clarify that in the present case, consumers would have to be able to identify from the hissing and fizzing sounds which manufacturer the canned beverage comes from. According to the EGC, the sound that is produced when a can is opened is to be viewed as a purely technical and functional element and is not an indication of the commercial origin. The Court concluded that there was a lack of sufficient distinctive character.

For a sign to be registered as a trademark, it must possess the necessary distinctive character. Lawyers with experience in the field of trademark law can advise on registering and protecting trademarks.

For more information:

https://www.mtrlegal.com/en/legal-advice/ip-law/trademark-law.html

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MarkenrechtPressemitteilungen
news-416 Wed, 30 Mar 2022 09:49:46 +0200 FG Münster: Amendment to tax assessment notice due to incorrectly attributed additional estimates https://www.mtrlegal.com/en/news-and-press/detail/news/fg-muenster-amendment-to-tax-assessment-notice-due-to-incorrectly-attributed-additional-estimates.html A tax assessment notice can be amended on account of estimates of additional income being attributed to the wrong tax assessment period. That was the verdict of the Finanzgericht (FG) Münster – the Fiscal Court of Münster – in a ruling from September 14, 2021 (ref.: 2 K 1155/19 G, F).

If a tax audit reveals income irregularities and it is suspected that the taxpayer provided incomplete information, the tax office can produce an estimate of additional profits. We at the commercial law firm MTR Rechtsanwälte note that while such an estimate must be realistic and not simply a stab in the dark, the ruling by the Finanzgericht Münster demonstrates that estimates of additional income being attributed to the wrong tax assessment period will not benefit the taxpayer.

In the instant case, a tax audit of a car dealer revealed unexplained cash deposits into the company account, and a subsequent cash transaction statement uncovered shortfalls. The tax authorities and the car dealer ultimately agreed on a total amount of 150,000 euros in estimated additional income, distributed evenly across the audit years 2008, 2009, and 2010, with the tax office subsequently issuing notices of assessment to effect this, including for trade tax.

The dealer lodged an objection against the assessment notices for 2009 and 2010, reasoning that the deficits identified for 2008 did not justify estimates of additional income for these years. This line of reasoning was followed by the tax office, which issued amendment notices to reflect this. What is now the definitive assessment notice for 2008 was amended by the tax office in accordance with Section 174(4) of the German Tax Code [Abgabenordnung, AO] in order to account for the total amount of 150,000 euros in estimated additional income for 2008.

The dealer’s legal action in opposition to this was ultimately unsuccessful. The FG Münster found that the prerequisites for the application of Section 174(4) AO had been met, i.e., in cases where a tax assessment notice has been amended to the benefit of the taxpayer due to an incorrect appraisal of a particular circumstance, the proper tax implications may subsequently be effected by issuing or amending a tax assessment notice. The Court noted that in this case the estimated additional income had been attributed to the wrong tax assessment period, as income generated in 2008 cannot be attributed to the following years. However, the total amount of estimated additional income had been correctly determined. The FG Münster held that the appeals against the tax assessment notices for 2009 and 2010 were only successful because the income had been attributed to the wrong tax assessment period and not because of the estimation method.

Lawyers with experience in the field of tax law can provide counsel.

For more information:

https://www.mtrlegal.com/en/legal-advice/tax-law/tax-audit.html

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BetriebsprüfungPressemitteilungen
news-411 Mon, 14 Mar 2022 10:57:47 +0100 BGH: Protection of regional indications of source as collective marks https://www.mtrlegal.com/en/news-and-press/detail/news/bgh-protection-of-regional-indications-of-source-as-collective-marks.html Regional indications of source for food items can, according to a ruling of the Bundesgerichtshof (BGH) – Germany’s Federal Supreme Court – be protected under trademark law even if they do not conform to the EU criteria for geographical indications.

In a ruling from July 29, 2021, the Bundesgerichtshof held that regional indications of source can benefit from trademark protection under German law even if they do not meet the EU criteria for protected geographical indications (ref: I ZR 163/19 et al.). We at the commercial law firm MTR Rechtsanwälte note that in doing so the Court has strengthened the protection of collective marks at the national level.

The almost 1500-strong farmers’ cooperative that filed the lawsuit in question had registered its pork and beef products featuring a regional indication of source in their name. In order to be allowed to make use of the collective mark, it was not enough for the animals to come from the region. The members of the cooperative also had to adhere to strict quality standards with regards to how the animals were fed, kept, slaughtered, etc., and the cooperative filed these standards with the German Patent and Trademark Office.

Yet other businesses from the region were also using the same brand name for their products without being members of the cooperative and without adhering to the relevant standards. One such case, for instance, concerned a butcher’s shop. The farmers’ cooperative viewed this as an infringement of its trademark rights and therefore filed a lawsuit. Its first taste of success came in 2019 when the Oberlandesgericht (OLG) Stuttgart – the Higher Regional Court of Stuttgart – made it clear that unfairly exploiting the good reputation enjoyed by the collective mark was unacceptable and that consumers must be able to clearly recognize that they are not dealing with a product from the cooperative.

The BGH has since upheld the ruling and dismissed the appeal. The impact of this decision also extends to other collective marks. The Court held that a product can be protected as a German collective mark even if it is not eligible for protection according to the EU criteria. Accordingly, national protection of collective marks can exist parallel to or independent of European regulations.

Lawyers with experience in the field of trademark law can advise on a wide range of issues pertaining to trademark law: from registration and trademark protection, to asserting legal claims in response to infringements.

For more information:

https://www.mtrlegal.com/en/legal-advice/ip-law/trademark-law.html

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PressemitteilungenIP Recht
news-408 Mon, 28 Feb 2022 09:39:52 +0100 FG Münster: Loss of estate tax exemption in connection with sale of family home https://www.mtrlegal.com/en/news-and-press/detail/news/fg-muenster-loss-of-estate-tax-exemption-in-connection-with-sale-of-family-home.html A family home is no longer exempt from estate tax if the heir sells the house within ten years, even if the decision to move out was informed by the advice of a doctor.

We at the commercial law firm MTR Rechtsanwälte note that a family home can be inherited tax-free if certain conditions are met, it being necessary, among other things, for the heir to promptly begin personally making residential use of the property and to continue doing so for the next ten years. If the inherited family home is sold during this ten-year period, then it is no longer exempt from estate tax. According to a ruling of the Finanzgericht (FG) Münster – the Fiscal Court of Münster – from December 10, 2020, this is the case even if the heir has moved out on the advice of a doctor and sold the family home (case ref.: 3 K 420/20 Erb).

The plaintiff in the case in question inherited her deceased husband’s estate in 2017, including the 50 percent co-ownership share in the detached family house which the married couple had been living in at the time of the husband’s death. However, the plaintiff’s living situation changed when, in 2019, she sold the house and moved into a condominium instead. The competent tax office subsequently amended the estate tax assessment notice, with the result that the family home was deemed to have retroactively lost its tax-exempt status following the sale of the house within the ten-year time frame.

The plaintiff objected to this, noting that her husband had passed away in the family home and that she had been suffering from depression and anxiety in the wake of his death, which is why she made the decision to change her living environment on the advice of her doctor. According to the plaintiff, there were compelling reasons preventing her from making personal use of the family home.

The lawsuit was nonetheless rejected by the FG Münster. It held that the tax-exempt status of a family home which the heir stops personally making residential use of within ten years is only not lost if there is a compelling reason preventing the heir from making personal use of the property. This was found not to be the case here.

The FG Münster went on to note that while the plaintiff had indeed been under considerable psychological strain as result of her husband’s death and her depression, a compelling reason could only be said to exist if it was not possible for the heir to keep house, e.g., due to the need for care. The Court has granted leave to appeal to the Bundesgerichtshof (BGH), Germany’s Federal Supreme Court.

Heirs who inherit a family home need to make sure that the conditions for tax exemption are met. Lawyers with experience in the field of tax law can offer advice.

For more information:

https://www.mtrlegal.com/en/legal-advice/tax-law/inheritance-tax.html

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ErbschaftssteuerPressemitteilungen
news-405 Wed, 16 Feb 2022 10:24:28 +0100 FG Düsseldorf on the transfer of tax relief on estate tax https://www.mtrlegal.com/en/news-and-press/detail/news/fg-duesseldorf-on-the-transfer-of-tax-relief-on-estate-tax.html Tax relief on estate tax is not conditional on the distribution of the estate taking place within a defined timeframe. That was the verdict of the Finanzgericht (FG) Düsseldorf – the Fiscal Court of Düsseldorf – in a ruling from April 21, 2021 (case ref.: 4 K 1154/Erb).

In inheritance cases, spouses, children, or other close relatives may be able to benefit from tax relief on estate tax, with it being possible for estate tax relief to be passed on from heirs to third parties. We at the commercial law firm MTR Rechtsanwälte can report that according to a ruling of the FG Düsseldorf, it is not necessary for the distribution of the estate to take place within six months in order for the transfer of the tax relief to be effective.

The case in question concerned two brothers who in 2015 each inherited half of their parents’ estate, which included, among other things, multiple plots of land and a limited partnership interest. In 2018, the brothers reached an agreement for the purpose of partitioning the estate. This entailed one brother transferring his fifty percent ownership stake in an apartment and in the limited partnership interest to the other brother (later plaintiff). They resolved to divide the land between themselves. The plaintiff subsequently applied for an amendment to the estate tax assessment, claiming that he was now due the maximum estate tax relief on the family home and the business assets as opposed to merely 50 percent.

Unfortunately for him, the tax office did not go along with this line of reasoning. Its official response was that the distribution of the estate can only be taken into account for tax purposes if it takes place shortly after the accrual of the inheritance, i.e., within six months. It was noted that in the present case this did not occur until after three years had passed.

However, the FG Düsseldorf took a different view, ruling that the law does not impose a time limit on the distribution of the estate but that an inherent connection between the accrual of the inheritance and the allocation of the assets is required for the transfer of the tax relief, with it being necessary – particularly in cases involving complex investments – to clarify a number of issues. The FG Düsseldorf noted that while this does take time, the inherent connection is still there. The Court went on to state that in the instant case there were no indications that the transfer of the assets had occurred as a result of the heirs forming a new intention.

The ruling is not yet final; the appeal to the Bundesfinanzhof – Germany’s Federal Fiscal Court – is pending (case ref.: II R 12/21).

Lawyers with experience in the field of tax law can advise on matters pertaining to estate tax and gift tax.

For more information:

https://www.mtrlegal.com/en/legal-advice/tax-law/inheritance-tax.html

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ErbschaftssteuerPressemitteilungen
news-401 Wed, 02 Feb 2022 14:29:00 +0100 Forged certification of COVID-19 masks – Cancellation of purchase agreement https://www.mtrlegal.com/en/news-and-press/detail/news/forged-certification-of-covid-19-masks-cancellation-of-purchase-agreement.html A forged CE certificate entitles the buyer to cancel the agreement for the purchase of COVID-19 masks. That was the verdict of the Oberlandesgericht (OLG) Frankfurt – the Higher Regional Court of Frankfurt – in a ruling from September 15, 2021 (case ref.: 4 U 66/21).

At the outset of the coronavirus pandemic back in the spring of 2020, masks and other protective equipment were in short supply in Germany. One consequence of these supply shortages was that some merchants began marketing masks and other equipment of inferior equality that did not meet current protection standards or whose certificates were forged. We at the commercial law firm MTR Rechtsanwälte note that it is customers and distributors who have suffered as a result. According to the judgment of the OLG Frankfurt, they are entitled to demand the cancellation of the purchase agreement if CE certification has been forged.

In the case in question, the plaintiff had ordered 80,000 disposable COVID-19 masks, with the seller having warranted that the masks were CE certified. The latter demanded that the purchase price be paid in cash on delivery. The plaintiff complied with this demand, and there was a reference to CE certification on the packaging of the masks delivered. However, this certification notice was missing from the subsequently delivered invoice. The plaintiff therefore requested that they be sent proof of certification. While they did receive a certificate to this end, this turned out to be a forgery from a Polish company. In fact, the masks had not been CE certified.

Accordingly, the plaintiff demanded that the purchase price be repaid for return of the masks. The claim was successful before the OLG Frankfurt, which upheld the ruling at first instance and dismissed the mask supplier’s appeal, noting that the masks were not certified as promised and thus defective.

The Court held that the plaintiff was not required to comply with a deadline for supplementary performance due to unreasonableness, an appropriate descriptor given that the defendant had supplied the plaintiff with a forged certificate following the conclusion of the purchase agreement, resulting in a breakdown in trust.

The ruling is not yet final. Leave to appeal can still be pursued by means of an appeal against the denial of leave to appeal.

Merchants who have been supplied with defective masks or other defective protective equipment over the course of the coronavirus pandemic ought to assert their rights and reclaim their money. Lawyers with experience in the field of commercial law can provide counsel.

For more information:

https://www.mtrlegal.com/en/legal-advice/commercial-law.html

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HandelsrechtPressemitteilungen
news-397 Wed, 12 Jan 2022 14:56:07 +0100 Munich court throws its weight behind protected designations of origin in Champagne dispute https://www.mtrlegal.com/en/news-and-press/detail/news/munich-court-throws-its-weight-behind-protected-designations-of-origin-in-champagne-dispute.html Food products that feature Champagne in their name should actually taste like Champagne. That was the verdict of the Oberlandesgericht (OLG) München – the Higher Regional Court of Munich – in a judgment from July 1, 2021 (case ref.: 29 U 1698/14).

Champagne, a drink often served on festive occasions, is not merely a sparkling drink but also a protected designation of origin that cannot be exploited without proper cause. Reason enough for the Association of French Champagne Producers to crack open a bottle and celebrate, particularly in light of the recent ruling delivered by the OLG München.

After years of legal wrangling, we at the commercial law firm MTR Rechtsanwälte can now report that the Munich court has affirmed the importance of the protections enjoyed by designations of origin. The case concerned a dispute between Champagne producers and a discounter that had been stocking a product labelled as a “Champagne sorbet”. The Association of Champagne Producers took legal action against this, arguing that it violated the protected designation of origin “Champagne”.

The case even reached the Bundesgerichtshof (BGH) – Germany’s Federal Supreme Court – and the European Court of Justice (ECJ). In a ruling from December 20, 2017, the ECJ held that use of the term Champagne is only legal if the relevant product’s taste can be attributed primarily to Champagne, otherwise its use constitutes unlawful exploitation of the reputation of a protected designation of origin for the purposes of unjustifiably benefiting from said reputation.

And this was exactly what the sorbet in question was found to be lacking despite consisting of roughly 12% Champagne. According to one expert assessment, the sorbet’s dominant flavor was that of pears. For this reason, the OLG München deemed the product’s description as a Champagne sorbet to be misleading to consumers, reasoning that it amounted to unlawful exploitation of the designation of origin “Champagne”. The Court noted that the discounter had benefited greatly from the positive public image of the protected designation of origin and refused leave to appeal on the grounds that both the BGH and the ECJ had already addressed the case.

The ruling is likely to send a signal and strengthen the protection of designations of origin, which – like trademarks – represent major assets due to, among other reasons, consumers associating a certain level of quality with the product. Other businesses are not allowed to take undue advantage of this aura of prestige and in so doing mislead consumers.

Lawyers with experience in the field of trademark law can provide counsel.

For more information:

https://www.mtrlegal.com/en/legal-advice/ip-law/trademark-law.html

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PressemitteilungenIP Recht
news-393 Thu, 06 Jan 2022 10:24:22 +0100 BGH: Golden color of chocolate bunny enjoys trademark protection https://www.mtrlegal.com/en/news-and-press/detail/news/bgh-golden-color-of-chocolate-bunny-enjoys-trademark-protection.html The Bundesgerichtshof (BGH) – Germany’s Federal Supreme Court – ruled on July 29, 2021 that the shade of gold used by a particular manufacturer for its chocolate bunnies enjoys trademark protection (case no.: I ZR 139/20).

The manufacturer’s chocolate bunny wrapped in golden foil has been a staple on supermarket shelves in the weeks leading up to Easter for decades and is well recognized by consumers. A survey conducted by the manufacturer found that 70 percent of respondents associate the golden color of the foil with the company. We at the commercial law firm MTR Rechtsanwälte can report that the BGH has since ruled that this particular shade of color enjoys trademark protection due to how readily consumers associate it with the manufacturer in question. In doing so, the BGH overturned a ruling of the Oberlandesgericht (OLG) München, the Higher Regional Court of Munich.

Since the golden chocolate bunny has been sold since the beginning of the 1950s, the manufacturer believes that it is the owner of a trademark acquired through use of this particular shade of golden color, which is why it considered its trademark rights to have been infringed when it came across a competitor marketing its own golden chocolate bunny in 2018.

The manufacturer’s lawsuit was nonetheless ultimately dismissed by the Higher Regional Court of Munich, which held that the long-standing use of this particular shade of color had yet to give rise to any rights under trademark law. According to the Court, the color had not acquired a reputation for being associated with the chocolate bunnies and hence the plaintiff was not the owner of a trademark acquired through use pursuant to Section 4 No. 2 of the German Trademark Act [Markengesetz, MarkenG] (case no.: 29 U 6389/19).

However, having concluded that the plaintiff had in fact successfully made the case that the golden color of the chocolate bunny had acquired market recognition, the BGH took a different view and granted the plaintiff's appeal, noting that according to the survey presented in court the degree of association was 70 percent, substantially higher than the required 50 percent.

The Court went on to state that the color trademark need not necessarily have been used for all or many of the company's products as a kind of "house color" in order for it to acquire a reputation. Other design features were also found not to preclude the color having acquired a reputation; what is important according to the BGH is that the target consumer audience see an indication of origin in the use of this particular shade of gold for chocolate bunnies even if it is featured together with these other design elements.

Whether the competitor in question has infringed the manufacturer’s trademark rights with its chocolate bunny in golden foil must now be adjudicated by the Higher Regional Court of Munich.

Lawyers with experience in the field of IP law can provide comprehensive advice on all matters pertaining to trademark law.

For more information:

https://www.mtrlegal.com/en/legal-advice/ip-law/trademark-law.html

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PressemitteilungenMarkenrecht
news-388 Wed, 29 Dec 2021 11:53:35 +0100 End to the suspension of the duty to file for insolvency https://www.mtrlegal.com/en/news-and-press/detail/news/end-to-the-suspension-of-the-duty-to-file-for-insolvency.html With the suspension of the duty to file for insolvency having been lifted in late April, businesses facing imminent insolvency are once again required to file for insolvency as soon as possible.

The duty to file for insolvency was suspended in March of 2020 to prevent a wave of insolvencies in the wake of the coronavirus pandemic. This suspension was later extended a number of times – subject to restrictions – until April 30, 2021, with the coalition partners unable to reach an agreement on a further extension. This means that the special arrangements relating to insolvency protection, which most recently only applied to over-indebted companies, have expired.

The standard provisions of insolvency law have thus been in force again since May of 2021. We at the commercial law firm MTR Rechtsanwälte note that this means managing directors or board members are required to file for insolvency as soon as possible but with a delay of no more than three weeks when faced with the prospect of imminent insolvency.

Insolvency describes a situation in which a company is unable to pay its debts and/or is over-indebted. The former is deemed to have occurred if the company is no longer able to pay wages, or its bills, or make payments on loans, whereas the company is assumed to be over-indebted if its debts exceed the entire value of the company.

If there is reason to believe a company is insolvent, it is necessary to file for insolvency as soon as possible and without undue delay, i.e. no more than three weeks delay. However, this period can only be taken advantage of if there is legitimate cause to believe that the grounds for insolvency can be successfully addressed within this three-week timescale. These grounds may have persisted for longer than three weeks because of the coronavirus pandemic, and businesses ought to have been aware that it was only by virtue of the special arrangements put in place by the German government that it was not necessary to file for insolvency within the usual timeframe.

Failure to file for insolvency in due time may render those responsible liable to prosecution for late filing of insolvency. It should also be noted that no further payments may be made following the onset of insolvency. This is another way in which the managing directors or board members responsible can find themselves guilty of an offence.

Filing for insolvency presents businesses with an opportunity to restructure and to start again on sound economic footing. For this reason, it ought to be assessed whether the insolvency process can be administered autonomously.

Lawyers with experience in the field of insolvency law can provide counsel.

For more information:

https://www.mtrlegal.com/en/legal-advice/company-law/restructuring-insolvency/corona-and-insolvency-law.html

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PressemitteilungenRestrukturierung InsolvenzCorona und Insolvenzrecht
news-385 Mon, 27 Dec 2021 17:58:09 +0100 OLG Karlsruhe rules on business closure insurance provider’s liability for closures related to COVID-19 https://www.mtrlegal.com/en/news-and-press/detail/news/olg-karlsruhe-rules-on-business-closure-insurance-providers-liability-for-closures-related-to-covid.html In a ruling of June 30, 2021, the Oberlandesgericht (OLG) Karlsruhe – the Higher Regional Court of Karlsruhe – found a provider of business closure insurance liable to pay out in response to a closure related to COVID-19 (ref.: 12 U 4/21).

In order to stem the spread of the coronavirus, restaurants and hotels have at times been forced to close by the authorities. Whether the provider of business closure insurance is liable to pay out in these cases is a matter of dispute. We at the commercial law firm MTR Rechtsanwälte can report that while the regional courts of Munich and Düsseldorf have answered in the affirmative, the OLG Karlsruhe has stated that it essentially comes down to the wording of the insurance conditions.

In a case that came before the OLG Karlsruhe (ref.: 12 U 4/21), a hotel with an associated restaurant had been forced to close temporarily due to the pandemic. The terms and conditions of the business closure insurance policy that was taken out in January 2020 made multiple references to the German Act concerning the Prevention and Control of Infectious Diseases (Infektionsschutzgesetz, IfSG), according to which insurance cover is to be provided in the event of an outbreak of notifiable diseases or pathogens if these are listed by name in the Act. Since COVID-19/SARS-CoV-2 was not listed, the insurer did not wish to pay out.

However, the OLG Karlsruhe did not play along, ruling that the attempt to limit the insurance coverage to an exhaustive catalog of diseases and pathogens that falls short of the scope of the IfSG was not sufficiently clear and understandable. The clause was found to be in violation of the statutory requirement for transparency and was therefore invalid. The repeated references to the IfSG in the insurance terms and conditions were said to have given the policyholder the impression that any business closure justified on the basis of the IfSG was covered by the insurance, and yet the fact that there were restrictions was not made clear enough. Having found the clause to be invalid, the OLG Karlsruhe concluded that COVID-19/SARS-CoV-2 was also covered by the insurance.

In another case, however, the OLG Karlsruhe arrived at a different conclusion (ref.: 12 U 11/21). There was no mention in that case of the IfSG anywhere in the insurance conditions of the business closure insurance policy that had been taken out in 2019. Instead, the insurance conditions included a provision expressly stating that notifiable diseases and pathogens within the meaning of the contract in question were "only" those listed in a subsequent catalog, with COVID-19/SARS-CoV-2 not being listed. The Court held that the clause in this case was unambiguous and that the policyholder was not unreasonably disadvantaged.

Whether a provider of business closure insurance is liable to pay out depends on the circumstances of a given case. Experienced attorneys can provide counsel in the context of legal disputes with the insurer.

For more information:

https://www.mtrlegal.com/rechtsberatung/corona.html

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CoronaPressemitteilungen
news-383 Mon, 13 Dec 2021 09:44:03 +0100 COVID-19 – Liability of business closure insurance providers depends on the individual case https://www.mtrlegal.com/en/news-and-press/detail/news/covid-19-liability-of-business-closure-insurance-providers-depends-on-the-individual-case.html Whether a provider of business closure insurance is liable to pay out in response to a closure related to COVID-19 depends largely on the specific wording of the insurance conditions.

A large of number of stores were forced to close during the coronavirus lockdown. Although it remains a matter of legal dispute whether a provider of business closure insurance is required to pay out if a business is forced to close by the authorities, we at the commercial law firm MTR Rechtsanwälte can report that it is becoming increasingly apparent that the issue of liability turns on the specific wording in the insurance conditions.

In its ruling of June 30, 2021, the Oberlandesgericht (OLG) Karlsruhe – the Higher Regional Court of Karlsruhe – found an insurer liable to pay out (ref.: 12 U 4/21). In the case in question, the operator of a hotel with an associated restaurant had taken out business closure insurance in January 2020. The terms and conditions of the insurance policy stated that insurance cover was provided in the event of an outbreak of notifiable diseases or pathogens if these were listed in the German Act concerning the Prevention and Control of Infectious Diseases (Infektionsschutzgesetz, IfSG). At that time, this was not yet the case for COVID-19/SARS-CoV-2, and the insurer did not want to provide coverage.

However, the OLG Karlsruhe did not play along, noting that the insurance conditions repeatedly made reference to the IfSG. This was said to give the policyholder the impression that every business closure justified on the basis of the IfSG would be covered by the insurance, it not being clear to them that there are restrictions. A clause which limits insurance coverage to an exhaustive catalog of diseases and pathogens that falls short of the scope of the IfSG is not transparent for the policyholder and is therefore invalid according to the OLG Karlsruhe. The Court held that the policyholder did not realize that the catalog in the insurance conditions was already out of date. In addition, it noted that an obligation to report COVID-19 was already in place at the time when the policy was taken out.

The Oberlandesgericht (OLG) Celle – the Higher Regional Court of Celle – arrived at a different conclusion in its judgment of July 1, 2021 (ref.: 8 U 5/21). The case was concerned with a restaurateur who had been forced to close his restaurant due to the coronavirus. In the terms and conditions of his business closure insurance, the obligation to pay out was tied to the outbreak of diseases and pathogens named in the IfSG. At that time, COVID-19 was still unknown and not named. Finding that the list of diseases and pathogens in the insurance conditions was exhaustive, the OLG Celle ruled that the insurer was not liable to pay out and that the policyholder was not unreasonably disadvantaged as a result.

The Bundesgerichtshof (BGH) – Germany’s Federal Supreme Court – will probably have the last word on the liability of business closure insurance providers. The OLG Celle has granted leave to appeal to the BGH.

For more information

https://www.mtrlegal.com/en/legal-advice/corona.html

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CoronaPressemitteilungen
news-378 Fri, 08 Oct 2021 15:27:38 +0200 ECJ: Toy block eligible for design protection https://www.mtrlegal.com/en/news-and-press/detail/news/ecj-toy-block-eligible-for-design-protection.html A well-known toy building block shall continue to enjoy protection. That was the verdict of the European Court of Justice (ECJ) in a ruling from March 24, 2021 that overturned a decision of the European Union Intellectual Property Office (EUIPO) (A.: T-515/19).

Design protection can be requested in the European Union for the appearance of the whole or a part of a product resulting from the features, in particular the lines, contours, colors, shape, texture and/or materials of the product itself and/or its ornamentation. We at the commercial law firm MTR Rechtsanwälte note that design protection is a top priority for businesses because of how well recognized designs are by consumers.

It is for this reason that a well-known manufacturer of toy building blocks requested design protection for a building block. The registration of the design was subsequently declared invalid by the EUIPO in 2019 in response to a legal action brought by another company.

In its reasoning, the EUIPO stated that all features of the appearance of the product benefiting from design protection were solely dictated by its technical function, specifically its assembly with other blocks. The EUIPO noted that solely technical functions are not eligible for protection as Community designs.

The manufacturer of the building blocks took action against this and was successful before the ECJ. This was somewhat surprising given that back in 2010 the ECJ had ruled in a trademark dispute that the toy block was not eligible for trademark protection based solely on its shape, it being necessary to achieve a technical result.

The ECJ has now delivered a different verdict with respect to design protection in the present case, even though it too is essentially concerned with technical function. In justifying this decision, the European Court stated that the EUIPO had erred in law by failing to consider the possibility of an exception, namely that mechanical fittings of modular products may exceptionally constitute an important element of the innovative characteristics of modular products and represent a major marketing asset, and therefore ought to be eligible for protection. The ECJ went on to state that the design can benefit from protection if it serves the purpose of allowing the multiple assembly or connection of products within a modular system. The EUIPO must now reconsider the matter.

Lawyers with experience in the field of trademark law can provide counsel.

For more information:
https://www.mtrlegal.com/en/legal-advice/ip-law/trademark-law.html

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MarkenrechtPressemitteilungen
news-371 Thu, 09 Sep 2021 14:04:28 +0200 BGH approves clauses that provide for lump-sum compensation in response to cartel damages https://www.mtrlegal.com/en/news-and-press/detail/news/bgh-approves-clauses-that-provide-for-lump-sum-compensation-in-response-to-cartel-damages.html In a judgment from February 10, 2021, the Bundesgerichtshof (BGH) – Germany’s Federal Supreme Court – found a clause providing for lump-sum compensation in response to damages claims lodged on the basis of unlawful cartel arrangements to be lawful (Az.: KZR 63/18).

The case concerned claims for damages that had been asserted against one of the members of the so-called “Schienenkartell” (rail cartel) that was exposed back in 2011. The cartel members had been colluding to fix, among other things, prices and quotas for railroad tracks. One transportation company had entered into an additional contractual agreement with one of the members of the cartel, according to which the former was entitled to claim lump-sum compensation in the event of a breach of antitrust law.

Lump-sum cartel compensation clauses of this kind are legally contentious. The BGH has now ruled that these clauses are legitimate and that they do not unduly disadvantage parties on the receiving end of such claims. We at the commercial law firm MTR Rechtsanwälte note that the decision is likely to prove positive for the victims of cartels above and beyond the rail cartel.

Lump-sum compensation clauses are regularly incorporated because of how difficult and tedious calculating cartel damages often proves to be. Cartel members frequently consider these clauses to be invalid, arguing that they are in breach of the laws governing general terms and conditions.

The Bundesgerichtshof’s cartel panel has since put an end to this line of reasoning, while also noting that there are several rules that need to be observed when it comes to compensation for cartel damages. The court held that quantifying damage that is the result of an antitrust infringement is often associated with considerable difficulties and a great deal of material and financial effort. Lump-sum compensation clauses are therefore key to making the enforcement of damages claims more efficient. According to the BGH, if a product was purchased at an inflated price due to illegal price fixing, compensation can be awarded as a lump sum by means of a clause to this end in the purchase agreement or contract for work and services in the amount of up to 15 percent of the total billing amount. The court went on to state that it is possible to make arrangements for a lump sum that corresponds to the average price markup resulting from cartels. The transport company in question had only agreed a lump sum of 5 percent.

Only if the lump sum is significantly higher than the damage caused by the cartel arrangements is the clause invalid according to the Bundesgerichtshof. This has yet to be determined by the appeal court in the instant case. Accordingly, the BGH referred the matter back to the Oberlandesgericht that had previously heard the case. The BGH noted, however, that the cartel member must demonstrate that the lump sum is in fact higher than the actual damage.

The ruling is equally groundbreaking for other damages claims lodged on the basis of unlawful cartel arrangements. Lawyers with experience in the field of antitrust law can provide counsel.

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Pressemitteilungen
news-368 Mon, 23 Aug 2021 10:58:28 +0200 BFH: Tax consultancy costs and clearance costs can be deducted from tax as estate planning costs https://www.mtrlegal.com/en/news-and-press/detail/news/bfh-tax-consultancy-costs-and-clearance-costs-can-be-deducted-from-tax-as-estate-planning-costs.html If a testator has committed tax evasion, the costs incurred from obtaining tax advice in relation to the supplementary tax return can be deducted from tax as estate planning costs according to a ruling of the Bundesfinanzhof (BFH), Germany’s Federal Fiscal Court (Az.: II R 30/19).

Heirs, take note: A supplementary tax return needs to be submitted by the heirs if the estate contains undeclared assets. If the heirs conceal these from the tax authorities, they may themselves be guilty of tax evasion. We at the commercial law firm MTR Rechtsanwälte note that those heirs that have yet to declare unreported income to the tax authorities should look into the possibility of submitting a voluntary declaration.

If an estate contains undeclared assets, the heirs ought to consult with experts and submit a supplementary declaration to the tax authorities. The benefit of doing so is that the costs incurred from obtaining advice in relation to the supplementary declaration can be deducted from estate tax as estate planning costs. The costs associated with the dissolution of the household and clearing the testator’s property are also tax deductible. That was the verdict of the Bundesfinanzhof in a ruling from October 14, 2020.

The testator in the case in question had generated income in Switzerland but failed to declare this in his tax returns from 2002 to 2012. The daughter, in her capacity as heir, had her deceased father’s tax returns corrected. She subsequently declared the resulting costs, together with the costs associated with clearing her father’s property, in her estate tax declaration as a liability of the estate.

The tax office did not approve of this, refusing to take the costs incurred from obtaining tax advice and clearing the property into account when determining the amount of estate tax due.

The daughter’s subsequent lawsuit was only partially successful before the relevant fiscal court, which held that the tax consultancy costs were to be accounted for as estate planning costs because the obligation to file tax returns had passed to the heir. However, the court took a different view when it came to the costs associated with clearing the property, ruling these were not tax deductible.

The Bundesfinanzhof went one step further. Ruling in favor of the heir, the court found that the clearance costs could be deducted from tax as estate planning costs. It reasoned that inspecting the household and clearing the property are directly linked to the estate.

Lawyers with experience in the field of tax law can provide counsel.

For more information:

https://www.mtrlegal.com/en/legal-advice/tax-law/inheritance-tax.html

 

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PressemitteilungenErbschaftssteuer
news-366 Tue, 10 Aug 2021 15:58:01 +0200 BGH: Advertisements that feature test verdicts without referencing the source are unlawful https://www.mtrlegal.com/en/news-and-press/detail/news/bgh-advertisements-that-feature-test-verdicts-without-referencing-the-source-are-unlawful.html Advertisements that feature test verdicts must include a reference to the source that is clearly visible to consumers. That was the verdict of the Bundesgerichtshof (BGH) – Germany’s Federal Supreme Court – in a ruling from April 25, 2021 (Az.: I ZR 134/29).

Products that perform well in tests conducted by prestigious institutions can draw on these accolades as a source of positive publicity. We at the commercial law firm MTR Rechtsanwälte note, however, that advertisements that feature a test verdict must also specify where consumers can look up the test results for themselves. Failure to do so constitutes a violation of competition law according to the BGH.

The case in question concerned a DIY chain that had been promoting a manufacturer’s paint in a catalogue, with the image of the paint bucket featuring alongside a small test verdict and recognition of the product as a “Testsieger”, i.e. the best performing product in a test.

A competition association filed a lawsuit in response to this, arguing that the advertisement was anticompetitive. While acknowledging that the catalogue featured the test verdict alongside the relevant image in the catalogue, it also noted that there was no visible reference to the source of the test.

The First Civil Chamber of the BGH granted the action. The judges found the advertising to be in breach of the German Unfair Competition Act (Gesetz gegen den unlauteren Wettbewerb, UWG), and the plaintiff was therefore entitled to seek injunctive relief. The court went on to note that the distinction of being the best rated product in the test – featured clearly alongside the relevant image in the catalogue – had a positive promotional effect, and that the DIY chain had made use of this test verdict for its own promotional purposes and was required to provide a reference to the source of the test results. The court held that due to the exceptional promotional impact of a test verdict, it is necessary to include a reference to the source even if, as in this case, the distinction of being the best rated product in the test is only objectively being promoted without being particularly emphasized.

The BGH clarified that referencing a website featuring the source is not superfluous, as it can be easily looked up. Consumers need to be able to access the source without any intermediate steps.

The court noted that consumers’ interest in being able to investigate test-based promotions when making an informed business decision and to be able to make sense of them in the overall context of the test is not contingent on the intensity with which the test results are promoted.

There is often a fine line to be walked when it comes to advertising, with the prospect of penalties in the form of formal warnings, injunction suits, and damages claims never far away. Lawyers with experience in the field of antitrust and competition law can provide counsel.

For more information:

https://www.mtrlegal.com/en/legal-advice/competition-law.html

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WettbewerbsrechtPressemitteilungen
news-363 Thu, 29 Jul 2021 09:00:52 +0200 Turkey shares financial data – Tax dodgers should consider submitting a voluntary declaration https://www.mtrlegal.com/en/news-and-press/detail/news/turkey-shares-financial-data-tax-dodgers-should-consider-submitting-a-voluntary-declaration.html The automatic exchange of financial information is supposed to assist countries in their efforts to tackle cross-border tax evasion. Turkey is now among the countries that share information with the German tax authorities.

The automatic exchange of information is a powerful weapon in the fight against cross-border tax evasion. More than 100 countries are party to the international agreement, which sees the signatory states mutually exchange financial information relating to their taxpayers who have accounts abroad. Among the signatories are former tax havens such as Switzerland. Following quite a bit of back and forth, Turkey is now also among the countries that share information with the German tax authorities. This means that untaxed income in Turkish accounts will no longer be hidden from the German authorities.

Anyone who is liable to pay taxes in Germany and fails to declare income from foreign accounts, for example in Turkey, is committing tax evasion. We at the commercial law firm MTR Rechtsanwälte note, however, that it remains possible to submit a voluntary declaration for tax evasion, which can potentially lead to immunity from punishment.

The first transferal by Turkey of financial information pertaining to individuals living in Germany with one or more accounts in Turkey was supposed to have already taken place in late 2020. Following delays, information was set to flow freely as of June 1, 2021, with President Erdogan signing a decree to this end.

In addition to names, addresses, birth dates, account numbers, and tax identification numbers, other information shared as part of the automatic exchange of information includes account balances and income from returns on capital. As a result, untaxed income from capital in foreign accounts can no longer be concealed from the tax authorities. One possible solution is to submit a voluntary declaration for tax evasion, with this potentially leading to immunity.

That being said, the declaration needs to be complete and have been submitted on time, i.e. before the tax evasion is discovered by the authorities. That is why those concerned should not wait much longer if they want to submit a voluntary declaration. For the declaration to be complete it needs to include all tax-relevant information from the past ten years. Even minor errors can render a voluntary declaration incapable of leading to immunity, though it may still have a mitigating effect similar to a confession.

Lawyers with experience in the field of tax law know what information needs to be included in the voluntary declaration and can prepare the latter in a manner that ensures that it will be effective.

For more information:

https://www.mtrlegal.com/en/legal-advice/tax-law/voluntary-disclosure.html

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SelbstanzeigePressemitteilungen
news-360 Mon, 26 Jul 2021 09:44:36 +0200 Voluntary disclosure: Germany’s Federal Minister of Finance purchases tax CD from Dubai https://www.mtrlegal.com/en/news-and-press/detail/news/voluntary-disclosure-germanys-federal-minister-of-finance-purchases-tax-cd-from-dubai.html Germany’s Federal Minister of Finance, Olaf Scholz, has purchased a CD from Dubai that contains confidential information pertaining to possible tax evaders. A number of taxpayers – including quite a few from Germany – ought to be concerned that their tax evasion will be discovered.

There has been little to report on recently regarding the purchase of so-called “Steuer-CDs” (tax CDs). That is until now: Germany’s Federal Minister of Finance (“Bundesfinanzminister”) has directed the Bundeszentralamt für Steuern – Germany’s Federal Central Tax Office – to purchase confidential data for the first time. The Bundesfinanzminister is seeking to step up the fight against tax fraud, with Germany’s federal states now set to examine the data from Dubai and uncover potential tax offenses, including tax evasion by taxpayers from Germany.

Tax fraud has long since ceased being treated as a trivial offense. Today, it is met with severe penalties. We at the commercial law firm MTR Rechtsanwälte note, however, that those concerned are still able to submit a voluntary declaration that can potentially lead to immunity from punishment.

The CD that was purchased from Dubai is reported to contain extensive information concerning assets in the Emirates belonging to millions of taxpayers, including assets belonging to thousands of Germans who own properties in the Gulf state and who may have concealed this from the German tax authorities. The matter will now be looked at in great detail by tax investigators. If their investigations bear fruit, the individuals concerned may be facing severe penalties ranging from fines all the way to custodial sentences.

One possible way forward is to submit a voluntary declaration, but this can only lead to immunity if the declaration is complete and submitted on time, i.e. before the tax evasion is discovered. The individuals concerned should therefore take action at once. Even if the tax evasion is considered to have already been uncovered, the declaration can still have a mitigating effect – much like a confession – and potentially be the difference between prison and a fine.

A voluntary declaration must include any and all information that is relevant from a tax perspective. A voluntary declaration that is incomplete or which contains inaccurate information cannot lead to immunity.

To avoid these kinds of mistakes and ensure that the voluntary declaration is effective, it is vital to consult with lawyers who are experienced in the field of tax law. They work in close consultation with clients and can be trusted to handle your case with discretion. They know what information needs to be included in the voluntary declaration and can prepare the latter in a manner that ensures that it will satisfy the requirements set out by the legislature.

For more information:

https://www.mtrlegal.com/en/legal-advice/tax-law/voluntary-disclosure.html

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SelbstanzeigePressemitteilungen
news-359 Tue, 20 Jul 2021 10:51:00 +0200 BFH finds rules governing taxation of shares to be partially unconstitutional https://www.mtrlegal.com/en/news-and-press/detail/news/bfh-finds-rules-governing-taxation-of-shares-to-be-partially-unconstitutional.html Losses from shares can only be offset against profits from the sale of shares. The Bundesfinanzhof (BFH) – Germany’s Federal Fiscal Court – has ruled that this is unconstitutional and asked the Bundesverfassungsgericht – Germany’s Federal Constitutional Court – to weigh in (Az.: VIII R 11/18).

The fact that losses from share trading can, to date, only be offset against profits from the sale of shares is a source of frustration for shareholders, it not being possible to offset the losses against income from capital assets. We at the commercial law firm MTR Rechtsanwälte note, however, that shareholders may find hope in a recent ruling of the Bundesfinanzhof that points to the possibility of change.

In a judgment from November 17, 2020, the BFH made it clear that it considers this aspect of the taxation of shares unconstitutional, and it consequently brought the case in question to the attention of the Bundesverfassungsgericht.

The backdrop to this case is the German Corporate Tax Reform Act of 2008 (Unternehmenssteuerreformgesetz), which set out a fundamentally new framework for the taxation of capital investments held as private assets for tax purposes. The Act provides for, among other things, an additional restriction on the ability to offset losses from the sale of shares: these cannot be offset against income from capital assets; only profits from the sale of shares can be used to offset the losses.

The case before the BFH concerned a married couple whose unfortunate record dealing with shares had resulted in the couple incurring losses of around 4,800 euros from the sale of shares. They subsequently sought to offset these losses against income (of just under 3,400 euros) from other investments. Yet neither the competent tax office nor the Finanzgericht Schleswig-Holstein – the Fiscal Court of Schleswig-Holstein – at first instance was supportive of this course of action.

However, the Bundesfinanzhof reached a different conclusion on appeal, ruling that the restriction on the ability to offset losses from shares amounts to an unconstitutional violation of the principle of equality. As such, the court held that taxpayers’ losses from the sale of shares are being treated differently for tax purposes than losses from the divestiture of other investments. Moreover, the BFH found that there is no justification for this discrimination.

Many investors may stand to benefit if the Bundesverfassungsgericht affirms the position taken by the BFH. They would subsequently be able to offset losses from the sale of shares against other income from capital assets, e.g. from investments in funds or from interest.

Lawyers with experience in the field of tax law can provide counsel.

For more information:

www.mtrlegal.com/en/legal-advice/tax-law/tax-dispute.html

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PressemitteilungenSteuerstreit
news-348 Fri, 28 May 2021 10:41:18 +0200 BGH changes tune on trademark forfeiture https://www.mtrlegal.com/en/news-and-press/detail/news/bgh-changes-tune-on-trademark-forfeiture.html In a judgment from January 14, 2021, the Bundesgerichtshof (BGH) – Germany’s Federal Supreme Court – overruled its own legal precedent on the forfeiture of trademarks (Az.: I ZR 40/20) in finding that failure to make use of a trademark means forfeiting trademark protection.

According to Section 49 of the German Trademark Act (Markengesetz, MarkenG), the registration of a trademark will be declared invalid and cancelled in response to a request to this end if the mark has not been used over a continuous period of five years. We at the commercial law firm MTR Rechtsanwälte can report that the BGH recently ruled that for the purposes of a legal action to have a trademark declared invalid, the determining factor is the date on which formal notice of the action was served. The court held that the duty of disclosure and burden of proof regarding the forfeiture of a trademark lie not with the plaintiff; rather, it is the proprietor of the trademark who must prove genuine use of the mark. This marks a departure from the Bundesgerichtshof’s case-law to date, which was no longer consistent with EU law.

The case concerned a trademark that had been registered by a wine merchant for sparkling wines. A competitor submitted a request to the German Patent and Trademark Office to have the mark cancelled on the basis that it was not being used. The action was dismissed by the Landgericht (LG) München, the Regional Court of Munich. The appeal before the Oberlandesgericht (OLG) München – the Higher Regional Court of Munich – was also unsuccessful, the OLG having considered the preconditions for declaring a trademark invalid not to have been met. The plaintiff was said to have failed to prove that the mark was not being used, with the trademark proprietor bearing merely a secondary duty of disclosure that it had successfully discharged.

However, the BGH took a different view on the matter, referring the proceedings back to the OLG München. The issue of whether the trademark had not been used for five years was said to be informed by the date on which legal action was taken, i.e. the date formal notice of the action was served. In a departure from its previous rulings, the BGH held that the period following the filing of the action until the conclusion of the oral hearing is no longer relevant. The court went on to state that if the action is preceded by a request submitted to the German Patent and Trademark Office to have the mark cancelled, the date on which the request was received is decisive provided the action for cancellation is brought within three months of the party submitting the request having been informed of the trademark proprietor’s objection.

The BGH concluded that the duty of disclosure and burden of proof lie not with the plaintiff but with the proprietor of the trademark when it comes to the use or non-use of a mark.

Lawyers with experience in the field of trademark law can provide counsel.

For more information:

https://www.mtrlegal.com/en/legal-advice/ip-law/trademark-law.html

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MarkenrechtPressemitteilungen