The principle of Freedom to copy: the Unfair Competition Act provides no protection for the form and packaging of "MAGNUM DOUBLE" ice cream

unfair commercial practices product imitation freedom to copy exploitation of reputation

Supreme Court decision of 5 July 2019 in case 4 Ob 80/19x

The plaintiff sells and distributes "MAGNUM DOUBLE" ice creams on a stick. In the present case, the plaintiff filed a complaint to object to the fact that the defendant had adopted the oval form of the original ice cream product, which is characterised by three layers in total, namely (i) a layer of icing containing cocoa, (ii) a soft layer with a filling in a variety of flavours, and (iii) a layer of chocolate. The plaintiff also wished to prohibit the defendant from offering its product under the name "Gelatelli DOUBLE" or "DOUBLE" by using a font and font colour likely to cause a likelihood of confusion with MAGNUM DOUBLE.

The motion for a preliminary injunction filed by the plaintiff was rejected in the third instance: Taking into consideration the interests of freedom of competition, the Supreme Court ruled that – in the absence of existing special intellectual property rights – the principle of freedom to copy should be retained. Offering a product imitation only amounts to an unfair commercial practice if special additional circumstances come into play in the form of an unfair behaviour of competitors (e.g. identical imitation or avoidable deception of origin). An identical imitation was excluded in this case. As regards the avoidable deception of origin, it is decisive to establish whether competitive originality is attributed to the plaintiff's product, i.e. whether its specific form or certain characteristics are likely to serve as an indication of origin. The requirement of competitive originality is not met if the public does not attribute the individual design characteristics of the product to a specific business or to a specific product. In the present case, the Supreme Court rejected the argument that the competitive originality of the "MAGNUM DOUBLE" product consists of its oval form and the multi-layer structure because it had been established that this form with three layers is necessary for is due to production factors. Moreover, the court ruled that the designation "DOUBLE" is merely descriptive and recedes into the background compared to the clearly visible trademark "MAGNUM". Furthermore, a deception of origin can be – in the opinion of the Supreme Court – allayed by the clearly visible product name ("Gelatelli") which differs from that of the original product. Finally, the Supreme Court did not identify any exploitation of reputation because the evocation of mere associations with a third-party product is not sufficient in this regard. As a rule, the adoption of product characteristics, which are state of the art technology and should remain available and also serve as an appropriate solution to a technical problem, do not constitute an exploitation of reputation, except in the case of an almost identical copy (which is not the case here).