01. Mar 17

Misleading advertising: Exclusive must mean exclusive

If something is advertised as exclusive then it ought to remain exclusive. A ruling of the Landgericht (LG) Hamburg [Regional Court of Hamburg] demonstrates that a lack of touted exclusivity can render the advertising misleading.

GRP Rainer Lawyers and Tax Advisors in Cologne, Berlin, Bonn, Düsseldorf, Frankfurt, Hamburg, Munich, Stuttgart and London conclude: A cosmetics manufacturer had advertised a number of its products as exclusively available at pharmacies. While the company itself had in fact sold its products solely in pharmacies, the products in question also found their way onto what is referred to as the “grey market” via the product lines of online merchants, retailers and drugstores. For this reason, the Landgericht Hamburg ruled in its judgment of November 17, 2016 that the advertising was misleading and violated Germany’s Gesetz gegen den unlauteren Wettbewerb (UWG) [Unfair Competition Act] (Az.: 327 O 90/16).

The defendant company took the view that its “exclusive advertising” was legitimate, arguing that it had only sold the products in pharmacies and the average visitor would not have a different understanding of the promotional statements. However, the LG Hamburg reached a different conclusion. The Court held that the promotional statements at issue were objectively inaccurate, as the products advertised were also available outside of pharmacies. The advertising was said to include no qualifying statement indicating that the defendant itself would only be selling the products in pharmacies. The Court went on to say that there was therefore a risk of consumers being misled by this advertising and not concluding that there were also offers on the grey market.

It also held that it is not unlikely for consumers to opt for an exclusive product, especially since pharmacies are rated as particularly trustworthy. As a result, competitors would have poorer prospects when it came to selling their products. The LG Hamburg therefore concluded that a right to damages was justified.

When it comes to advertising, it is easy for boundaries to be crossed, even unwittingly, and thus give rise to violations of competition law. Formal written warnings, damages claims and injunction suits are possible consequences. Lawyers who are experienced in the field of intellectual property law can advise businesses on their advertising measures as well as assist in fending off or enforcing claims.

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