02-01-2014Article

Newsletter IP, Media & Technology February 2014

Trade shows as “Scene of the Crime” – A Legal Vacuum?

Trade show booths as business premises

According to case law, trade show booths are also considered as business premises. This applies both to German and foreign companies. This means, for example, that a service of process can be made effectively at a trade show booth. A significant advantage that has been exploited many times by both national and international companies is that they are able to have German language lawsuits and preliminary injunctions served on their foreign competitors at a German trade show booth. Without this opportunity, they would have had to have the corresponding documents translated in advance and have them served with the aid of foreign executing bodies. This not only costs significantly more, but it can also take many months for the relevant measures to be put into effect and to have any results obtained.

During trade shows, it has therefore become customary for process to be served at trade show booths primarily during the first few days of a trade show.

Quick enforcement of rights by means of a preliminary injunction

Companies are increasingly using the method of preliminary injunctions. The main focus is on preliminary injunctions based on patent law, trademark and competition law, design rights, and copyrights.

In patent law in particular, there has been frequent use of preliminary injunctions. While courts previously did not have the confidence to assess the complex technical subject matter of patent law cases because of a lack of time, German courts now employ many judges who are specializing in patent law, who are able to familiarize themselves with the technical material withinhours, and who generally make thorough decisions. If courts are convinced of the presence of an infringement of rights, they are also willing to take hard, drastic steps against it.

By serving a preliminary injunction at a trade show booth, it is possible to ensure – if you act in a timely manner before or right after the beginning of a trade show – that a competitor is no longer able to display products that infringe patent or other rights and may not distribute related advertising material any longer. The serving of a preliminary injunction at a trade show booth is often under certain circumstances associated with a search of the trade show booth, as well as the securing of infringing products and advertising material found there by a bailiff.

Customers who witness such an act of the service of process are considerably unsettled by this. The serving of a preliminary injunction is therefore an effective advertising tool in fighting against competitors’ products that infringe rights.

Criminal seizure of products at trade shows is becoming more popular

When civil courts are involved in preliminary injunction proceedings, in most cases the decision is made by a specialist judge, so that blatantly incorrect decisions are unusual, despite the speed with which the decisions are made. If a company simply wants to disrupt its competitors during a trade show, possibly even without any legal grounds, they will find it difficult to get the civil courts to assist in this.

Over the past few years, some companies have therefore taken to exploiting the criminal law enforcement authorities in cases that would most likely fail or that would not be settled quickly enough in front of civil courts. They rely on the fact that an intentional breach, for example of a trademark or patent, is punishable under criminal law.

A startling example was the comprehensive seizure of products during the International Consumer Electronics Fair (IFA) in Berlin in 2008. In this case, a major royalty collection society involved the local prosecutor, who helped it to have customs officers empty entire trade show rooms of products primarily of Asian suppliers.

One particular feature of this seizure was that the customs officers were entirely unable to assess whether the exhibited products breached the patents in question at that time. They therefore simply took all of the products.

Subsequent to the seizure at that time, in September 2008, the lawyers of Heuking Kühn Lüer Wojtek obtained a decision at the Regional Court of Berlin (Case 523 Qs 112/08), in which the seizure order was considered illegal and was rescinded. The Regional Court of Berlin based its decision on the grounds that the Local Court of Berlin, which ordered the seizure in response to an application by the prosecutor, did not describe precisely enough which items were actually to be seized. The court ascribed the illegal decisions by the Local Court of Berlin, the prosecutor of Berlin and the executing customs officers to their lack of technical expertise.

The Regional Court of Berlin decided that a seizure can only be legally ordered if a person with appropriate specialist knowledge is involved in a technology-oriented case of this kind.

“Crib” decision – Reducing the risk of arbitrary police actions

In a decision issued in May 2013, (Regional Court of Cologne, decision of May 06, 2013 - 116 Qs 12/13, 116 Js 788/12), the Regional Court of Cologne handled a similar, even more drastic case. This case involved cribs that potentially breached a patent. During a trade show for children’s items in Cologne, police seized cribs that allegedly breached a patent from several trade show booths.

In deciding on this action, the police officers involved relied exclusively on – as it later turned out – unsustainable claims made by the lawyer of a competing company. The police officers failed to obtain a search and seizure warrant from a judge prior to beginning their seizure, although there had been sufficient time to do so. At that time, the responsible Local Court ordered the seizure retroactively, again without any specialist investigation into whether a breach of patent was taking place.

The Regional Court of Cologne granted the complaint against this order. It was the opinion of the court that in the case of a breach of patent that is not obvious, the initial suspicion required for a seizure cannot be presumed simply on the basis of a submission by the patent holder to an official who is not a specialist. In such cases, it must always be taken into account that the patent holder may be motivated by improper self-interest in requesting the seizure. In any case, according to the Regional Court of Cologne, it cannot be assumed that there was a case of imminent danger because the police officers should have obtained the necessary court order prior to beginning their actions and would have had no problem in doing so.

Conclusion

Despite their strategic importance with regard to measures against competitors, even trade shows are not a legal vacuum. Civil courts are generally reliable in preventing the risk of obviously incorrect decisions because they use judges who are specializing in the individual areas of intellectual property rights. The decisions described above show that courts also make an effort to avoid arbitrary actions under criminal law during trade shows. The future will show whether criminal law enforcement authorities and criminal courts will base their actions on the decisions that have been issued and involve specialists when necessary.

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