Definition and significance of exclusivity
Exclusivity is a central concept in German law and generally describes a special, prominent position of a person, company, product, or service in the market or within a specific legal area. Exclusivity implies the presence of particular characteristics or features that are not possessed by other market participants or rights holders. This outstanding position entails special legal and economic implications.
Legal foundations of exclusivity
Aspects of competition law
Unfair competition and exclusivity claims
The Act Against Unfair Competition (UWG) contains key provisions regarding so-called claims of exclusivity. Advertising a unique position is permissible if the advertised product is actually unique in a characteristic essential to the consumer. According to Section 5 UWG, it is considered misleading if companies, products, or services are attributed features which do not exist or do not exist in the claimed exclusive form.
Requirements for lawful claims of exclusivity
Exclusivity claims must be objectively verifiable and regularly refer to the entire relevant market. Case law requires that the claimed exclusivity actually exists in relation to all competitors and that the special feature is permanent. Temporary or insignificant advantages are not sufficient for a permissible exclusivity claim. If the factual basis is lacking, legal claims under competition law such as injunctions, removal, and possible damages may arise.
Trademark law implications
Protection of distinctive designations
Under trademark law, exclusivity may exist in the sense of particularly high recognition value or so-called acquired distinctiveness. A trademark can become particularly well-known through extensive use and acquire a unique status in the consciousness of market participants. This outstanding position may lead to broader protection in the event of infringement (Section 14 MarkenG).
Acquired distinctiveness and exclusivity
If a trademark or company designation claims acquired distinctiveness, exclusivity becomes a legal requirement for extended protection. The distinctiveness of the mark is the decisive criterion. The degree of recognition and uniqueness must be proven, for example, through opinion polls or market research data.
Antitrust law relevance
Dominant market position
Antitrust law, especially the Act Against Restraints of Competition (GWB), regularly addresses exclusivity in connection with dominant market positions (Sections 18 et seq. GWB). A dominant market position is a special form of exclusivity in the economic context; it is present when a company is not exposed to any substantial competition and can operate largely independently of competitors and customers.
Abuse control and merger supervision
Abusive exploitation of a dominant or equivalent exclusive position is prohibited under Section 19 GWB. Merger control also ensures that mergers do not result in undesirable exclusive positions or new dominant market positions (Sections 35 et seq. GWB).
Exclusivity in intellectual property law
Patent law and intellectual property rights
In patent law, a valid patent can grant exclusivity regarding the use of an invention. The patent holder has the exclusive right to use the patented invention (Section 9 PatG). Infringements of this right may result in claims for injunctive relief, information, destruction, and damages.
Copyright law and exclusivity
In copyright law, exclusivity is connected with the principle of the individuality of creative work. Whoever has created a work protected by copyright enjoys the exclusive right of exploitation (Sections 15 et seq. UrhG). However, this resulting exclusivity is limited in time and ends when the protection period expires.
Findings from case law
Requirements for evidence
Case law emphasizes that high standards are set for the burden of proof regarding the actual existence of an exclusivity claim. Particularly in relation to advertising claims of exclusivity, only a temporary or insignificant superiority is not sufficient. Proof is regularly provided by market comparisons, expert opinions, and objective analysis of the relevant features.
Misleading information and legal consequences
The consequences of misleading claims about exclusivity can range from warnings and injunction/removal claims to damages. Case law clearly states that only the objective understanding of an average, reasonably well-informed and observant consumer is decisive.
Special forms of exclusivity
Temporal and substantive exclusivity
A distinction is made between absolute and relative exclusivity. Absolute exclusivity presupposes a complete monopoly, while relative exclusivity merely describes a particularly prominent position within a specific area or segment.
Technological exclusivity
Innovative products or technical solutions in particular can have a limited period of exclusivity until corresponding protection rights expire or the technology becomes generally accessible.
Limits and potential for abuse
The legal system sets clear limits on exclusivity. In particular, the exploitation of a dominant position may not result in competitors being unfairly hindered or consumers being disadvantaged. Violations of these principles can result in antitrust sanctions such as fines and obligations to allow other competitors market access.
Literature references and further regulations
Important regulations concerning exclusivity can be found in the Act Against Unfair Competition (UWG), the Act Against Restraints of Competition (GWB), the Trademark Act (MarkenG), the Patent Act (PatG), and the Copyright Act (UrhG). Further detailed questions are governed by the extensive supreme court case law on fair competition and the protection of intellectual property.
Summary
From a legal perspective, exclusivity is a complex concept with central importance in competition, trademark, antitrust, and intellectual property law. Claims of exclusivity and actual exclusive positions are subject to strict legal requirements and controls to ensure fair competition, consumer protection, and promotion of innovation. Missing or misleading representations can have serious civil and antitrust law consequences. Careful examination and compliance with legal requirements are therefore mandatory whenever an exclusive position is claimed or asserted.
Frequently Asked Questions
Can exclusivity claims be problematic under competition law?
Claims of exclusivity can be problematic under German competition law, especially under the Act Against Unfair Competition (UWG), if they are not objectively correct or sufficiently substantiated. An exclusivity claim occurs when a company claims to offer a service or product that is unrivaled in the relevant market, i.e., occupies a prominent, unique position. According to Section 5 UWG, this constitutes misleading advertising if the claimed uniqueness does not actually exist, or if such a claim creates a false impression among the average consumer or competitor. Courts apply strict standards for permissibility: It is not enough for a company to be marginally better than the competition in some respect; rather, there must be a clear differentiation from competitors. In addition, the statement must be true and verifiable at any time. If this is not the case, companies face warnings, injunctive relief, and claims for damages from competitors or associations.
Who bears the burden of proof in legal disputes over exclusivity claims?
In the event of a legal dispute, the company making the advertising claim generally bears the burden of proof for the accuracy of an exclusivity statement. If the company cannot prove that the uniqueness highlighted in advertising or public relations is correct at the time of publication and is based on objective facts, the claim is considered misleading (Section 5 UWG). The requirements for evidence are high: it is not sufficient to rely on general market knowledge or subjective assessments. Instead, current, reliable, and preferably independent sources (e.g., market studies, expert opinions, or scientific investigations) must be consulted. A reversal of the burden of proof, as sometimes applies in other areas, does not occur here; the responsibility for substantiation and evidence lies solely with the party claiming exclusivity.
What legal consequences can arise from unlawful exclusivity claims?
Unlawful or false claims of exclusivity can lead to various legal consequences. Firstly, a competitor, association, or consumer protection agency may issue a warning under competition law. This may be accompanied by a demand for a cease-and-desist declaration subject to a penalty and payment of warning costs. If the company does not comply with the warning, an interim injunction or an action for injunctive relief may be pursued. Additionally, claims for damages may arise if it can be proven that the unlawful claim resulted in measurable harm to competitors or consumers. In individual cases, misleading exclusivity claims can also lead to refunds of payments or rescission of already concluded contracts. Furthermore, providing inaccurate exclusivity information may result in reports to industry regulators and, if necessary, official measures.
How long may an exclusivity claim be asserted legally?
An exclusivity claim may only be maintained legally as long as the underlying facts are accurate and up to date. Once the relevant market, product, or service changes and the claimed exclusivity lapses – for example, because new competitors enter the market or existing providers catch up – the claim must be withdrawn or amended without delay. Continuing to use outdated exclusivity claims is legally regarded as misleading with the corresponding consequences under Section 5 UWG. Companies are therefore advised to continuously monitor the competitive situation in order to detect changes promptly and adjust their advertising accordingly.
Are there industry-specific nuances in the legal assessment of exclusivity claims?
Yes, the legal assessment of exclusivity claims can vary by industry, as market perceptions, environmental factors, and the type of products or services being advertised differ. For example, stricter requirements for advertising statements and supporting evidence apply in the fields of medicinal product advertising, financial services, or the food sector. For technical innovations, exclusivity can be backed by patents, which provide a statutory monopoly for a set period. In the medical sector, features of exclusivity must be assessed even more critically due to the regulation by the German Act on Advertising in the Health Care System (HWG). Case law takes into account industry-specific circumstances and the expectations of the relevant public in each individual case.
Is a ‘temporary exclusivity’ legally permissible and how must it be substantiated?
Promoting a ‘temporary exclusivity,’ i.e., a time-limited exclusivity, is legally permissible if it is clearly communicated and factually justified. Companies must specify precisely what the exclusivity is and the period it covers. Permissibility also depends on whether the claim is true and verifiable, e.g., via exclusive distribution rights, patents, or market-specific factors. However, if the advertising suggests permanent or comprehensive exclusivity when in fact it only exists temporarily, this constitutes misleading advertising. The burden of proof for the temporal and substantive accuracy also lies with the advertiser. Before the stated period expires, it must again be checked whether the claim is still accurate; otherwise, it must be removed from advertising.
Can several companies simultaneously claim exclusivity under the law?
The term exclusivity presupposes (almost) complete market exclusivity. In practice, however, it is possible for different companies to claim exclusivity for different, specialized subareas, or from the perspective of different market segments. However, this requires that the claimed exclusivity relates to clearly defined features, product characteristics, or target groups in each case. If the asserted exclusive positions overlap within the same relevant market segment, this regularly constitutes misleading advertising. Therefore, from a legal perspective, it is essential to formulate exclusivity claims precisely and clearly define the aspect and target audience to which they refer. In cases of doubt, courts will decide restrictively to protect market transparency and the interests of consumers.
