News and Press - Lawyers Attorneys Tax Advisors GRP Rainer Germany - Cologne Berlin Bonn Düsseldorf Frankfurt Hamburg Munich Stuttgart London UK https://www.grprainer.com/en/ News and Press releases of Lawyers Attorneys Tax Advisors GRP Rainer Germany Cologne Berlin Bonn Düsseldorf Frankfurt Hamburg Munich Stuttgart London UK en GRP-Rainer Sun, 26 May 2019 21:14:39 +0200 Sun, 26 May 2019 21:14:39 +0200 TYPO3 news-3500 Fri, 24 May 2019 09:50:16 +0200 BAG – Claiming severance pay in the event of the insolvency https://www.grprainer.com/en/news-and-press/detail/news/bag-claiming-severance-pay-in-the-event-of-the-insolvency.html There is often little time separating insolvency and termination of employment contracts, with the issue of how to comply with an employee’s right to severance pay in the event of insolvency often proving a source of controversy.

In a judgment from March 14, 2019, the Bundesarbeitsgericht (BAG), Germany’s Federal Labor Court, delivered a welcome ruling for employees (Az.: 6 AZR 4/18). According to this, the right to severance pay is a debt incumbent on the insolvent company’s estate if the insolvency administrator is the first to submit a petition to dissolve the employment relationship, and this is then dissolved by a court. We at the commercial law firm GRP Rainer Rechtsanwälte note that priority must then be given to satisfying the claim for severance pay, i.e. the employee receives the full amount, and not merely installments, due to him or her as severance pay from the insolvency estate. Following the BAG’s decision, this also applies if notice terminating the employment relationship was first issued by the employer.

In the instant case, the employer and later insolvency debtor had terminated the employment relationship with the plaintiff in December of 2014 with effect from January 15, 2015. While the proceedings before the court of first instance concerned with protection against unfair dismissal were ongoing, the employer notified the plaintiff’s attorney in an informal letter of its alternative claim aimed at dissolving the employment relationship in return for a severance payment. On April 1, 2015, insolvency proceedings were initiated against the company. The plaintiff subsequently asserted his claims against the insolvency administrator. The latter would later also submit a petition during proceedings before the Arbeitsgericht (Labor Court) in June of 2016 to dissolve the employment relationship in return for a severance payment.

In the end, the employment contract was dissolved in return for a severance payment. However, according to the Arbeitsgericht and Landesarbeitsgericht Rheinland-Pfalz (the Higher Regional Court of Rhineland-Palatinate), the claim for severance pay ought to have been included in the insolvency administrator's list of claims and thus not settled in advance as a debt incumbent on the insolvency estate. The plaintiff’s appeal against this was successful. The BAG held that failure to deliver meant the notification of the dissolution agreement from January 26, 2015 was not yet pending in court. Moreover, this had not been remedied. The Court went on to state that the petition for dissolution, as the material act for the purposes of classification under insolvency law, was first filed and made pending in court by the defendant insolvency administrator during the oral hearing of the Arbeitsgericht on June 9, 2016.

Lawyers with experience in the field of insolvency law can advise debtors and creditors in the event of insolvency.

For more informations: https://www.grprainer.com/en/legal-advice/company-law/restructuring-insolvency.html

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Restrukturierung InsolvenzPressemitteilungen
news-3497 Fri, 17 May 2019 08:38:37 +0200 BFH – Rate of inheritance tax applies to total amount https://www.grprainer.com/en/news-and-press/detail/news/bfh-rate-of-inheritance-tax-applies-to-total-amount.html In the case of inheritance tax, the taxable amount is not split up and subject to differential tax rates. That was the verdict of the BFH, Germany’s Federal Fiscal Court, in ruling from February 20, 2019 (Az.: II B 83/18).

When it comes to inheritance and gift tax, certain tax allowances apply depending on the degree of kinship. The key factor in calculating the tax owed is the value of the assets transferred. We at GRP Rainer Rechtsanwälte note that the relevant tax rate is applied to the total amount. The BFH concluded that the taxable acquisition cannot be further split up and subject to differential tax rates.

The plaintiff had been gifted a co-ownership share in two properties. The tax office applied a tax rate of 11 percent from a defined scale. The plaintiff wanted the tax to be calculated such that a tax rate of 7 percent would apply to the partial amount of 75,000 euros, and the tax rate of 11 percent would then only apply to the remaining sum exceeding this partial amount: 171,800 euros.

The BFH rejected this, ruling that splitting the taxable acquisition into partial amounts and subjecting it to differential tax rates is precluded by the hardship allowance under sec. 19 para. 3 of the German Act on Inheritance and Gift Tax (ErbStG).

Experienced tax lawyers can advise on matters pertaining to inheritance and gift tax.

For more informations: https://www.grprainer.com/en/legal-advice/tax-law/inheritance-tax.html

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ErbschaftssteuerPressemitteilungen
news-3496 Thu, 16 May 2019 10:56:01 +0200 Antitrust violations – European Commission imposes fines on automotive suppliers https://www.grprainer.com/en/news-and-press/detail/news/antitrust-violations-european-commission-imposes-fines-on-automotive-suppliers.html The European Commission has imposed fines totaling 368 million euros on two automotive suppliers for violations of antitrust law.

The EU competition watchdog imposed the fines in response to illegal arrangements that the cartelists had entered into concerning the supply of safety belts, airbags and steering wheels. A third supplier was granted immunity pursuant to the leniency program for informing the authorities about the cartel.

According to the European Commission, the cartel members entered into illegal arrangements in order to increase their profits from selling life-saving component parts, such as airbags and safety belts. To this end, they were said to have exchanged confidential business information and coordinated their market behavior in relation to car companies. The arrangements are likely to have had a considerable impact on the European car market. The EU competition authorities claimed that the cartel arrangements have damaged the competitiveness of the European automotive industry and thus also ultimately given rise to adverse effects for consumers.

In reaching a settlement, the parties conceded to having been party to a cartel. The European Commission reduced the fines due to their cooperation. The decision is part of extensive investigations into cartels in the automotive supply industry, with other fines having already been imposed.

We at the commercial law firm GRP Rainer Rechtsanwälte can report that, following this decision by the European Commission, individuals and companies who were harmed by the illegal cartel arrangements can assert their claims for damages before national courts in the EU. This is because the Commission’s decision serves as proof that anticompetitive conduct occurred, which means it is no longer necessary to prove the offense, and all that is required now is to assert individual claims for damages.

Violations of antitrust or competition law may be severely punished and met with stiff penalties. That being said, the arrangements are by no means always as obvious as, for instance, in the case of illegal price-fixing agreements. Even individual contractual clauses are capable of falling foul of the law. That is why it is advisable to have agreements reviewed with a view to their implications from the perspective of competition law. Lawyers with experience in the fields of antitrust and competition law can advise businesses and assist in enforcing and fending off claims in the event of violations.

For more informations: https://www.grprainer.com/en/legal-advice/antitrust-law.html

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KartellrechtPressemitteilungen
news-3493 Mon, 13 May 2019 11:02:06 +0200 OLG Frankfurt – Misleading advertising featuring superlatives https://www.grprainer.com/en/news-and-press/detail/news/olg-frankfurt-misleading-advertising-featuring-superlatives.html Take care when using superlatives in advertising. A ruling by the OLG Frankfurt, the Higher Regional Court of Frankfurt, from February 14, 2019 demonstrates their potential to easily mislead, as well as violate competition law (Az. 6 U 3/18).

We at GRP Rainer Rechtsanwälte note that adverts featuring misleading information are in breach of competition law. Particular attention should therefore be paid to how one uses superlatives, especially given the OLG Frankfurt’s recent ruling.

When traveling, it is practical to have suitcases that weigh as little as possible. It is with this in mind that a suitcase manufacturer decided to promote its luggage items at an international trade fair with the banner “World’s Lightest”. The suitcases could also be ordered online on the company’s websites. However, a competitor noticed that its own suitcases were no heavier, and issued the rival firm with a warning.

The case ended up before the OLG Frankfurt, which held that advertising featuring the words “World’s Lightest” is misleading if the luggage items in question are not the lightest in the world when compared to products from other manufacturers with similar volumes and dimensions. In these instances, statements of this kind were said to be unfair and misleading, even when used as an eye-catcher at a fair.

Lawyers with experience in competition law can offer advice.

For more informations: https://www.grprainer.com/en/legal-advice/competition-law.html

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WettbewerbsrechtPressemitteilungen
news-3491 Tue, 07 May 2019 11:16:07 +0200 Changes to trademark law – Markenrechtmodernisierungsgesetz comes into effect https://www.grprainer.com/en/news-and-press/detail/news/changes-to-trademark-law-markenrechtmodernisierungsgesetz-comes-into-effect.html The Markenrechtmodernisierungsgesetz (MaMog), i.e. the Trademark Law Modernization Act, entered into effect in Germany on January 14, 2019, introducing a number of changes to trademark law.

The MaMog brings German trademark law into line with the EU Directive. We at the commercial law firm GRP Rainer Rechtsanwälte note that this is part of the process of continuing to harmonize trademark law within the European Union and designed to bolster the rights of trademark proprietors.

Despite not turning German trademark law on its head when it came into force, the MaMog has introduced several changes, among the most significant of which is that trademarks are no longer required to be capable of being displayed graphically. Signs can now be displayed in any appropriate form using technology that is in the public domain, e.g. with audio or image files. This will in turn lead to new forms of presentation, with it now being possible to register trademarks for sounds, motion/movement marks, holograms and multimedia marks.

Another major innovation is the introduction of the certification mark to German trademark law. It has been possible to obtain an EU trademark for this since as early as 2017. A certification mark affords trademark protection to quality seals and test marks, such as those concerned with safety standards, organic production or fair trade. In the case of certification marks, it is not their function as an indicator of origin but rather as a guarantee that takes center stage. They need to be capable of guaranteeing certain characteristics of goods or services as well as distinguishing them from products for which no such guarantee exists. The trademark proprietors must be neutral and are not allowed to personally offer the goods they have certified.

The MaMoG also introduces new absolute grounds for refusal to German trademark law. Protected geographical indications and protected designations of origin must now be considered as absolute grounds for refusal. This particularly applies with respect to food items, wine and spirits.

Another new element is that it is possible to apply for licenses to be entered into the register. The holder of an exclusive license can then personally file lawsuits in response to trademark violations if the proprietor of the trademark fails to bring a legal action within a reasonable period of time after having been formally requested to do so.

Lawyers with experience in the field of IP law can advise on the changes to trademark law.

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

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MarkenrechtPressemitteilungen
news-3489 Mon, 06 May 2019 09:33:38 +0200 BGH – Breach of copyright in the case of photographs of works of art https://www.grprainer.com/en/news-and-press/detail/news/bgh-breach-of-copyright-in-the-case-of-photographs-of-works-of-art.html According to a ruling of the Bundesgerichtshof (BGH), Germany’s Federal Supreme Court, even if works of art are no longer protected by copyright, taking pictures and publishing photos of them may be in breach of copyright.

70 years following an artist’s death, his or her works are no longer protected by copyright. We at the commercial law firm GRP Rainer Rechtsanwälte note that this means they are in the public domain and meant to be available for use by anybody. However, it is clear from a ruling by the BGH from December 20, 2018 that this does not necessarily give someone carte blanche to publish photos of these works of art on the internet (Az.: I ZR 104/17).

The case in question began with a museum filing a lawsuit. The museum had displayed pictures that were in the public domain, subsequently had them photographed and later published them in a catalog. The photographer had assigned the publication rights to the museum. Moreover, the museum had expressly prohibited visitors from taking pictures of the paintings on display.

Notwithstanding the prohibition, the defendant took pictures of the works of art in the museum and published them on an online encyclopedia. He also scanned photos from the museum catalog and uploaded these to the internet as well. The BGH ruled that in doing so the man had, on the one hand, violated the ban on photography that he was required to comply with pursuant to a contractual agreement with the museum, and, on the other hand, was in breach of copyright.

By publishing the pictures scanned from the catalog online, the defendant was found by the BGH to be in breach of copyright. The BGH also held that a photograph of a painting enjoys protected status as a photograph, reasoning that the photographer has to make a number of decisions when taking the photograph regarding its presentation, e.g. with regards to location/position, lighting, distance, angle, cut, etc. The Court concluded that this represented a kind of personal intellectual effort worthy of protection.

The BGH went on to state that the defendant should not have taken his own photos in the museum, as this was in violation of the ban on photography that he was required to comply with as per the contractual agreement and which formed an operative part of the general terms and conditions. The museum was therefore entitled to obtain injunctive relief.

Copyright infringements may give rise to formal warnings as well as claims for injunctive relief or damages. Lawyers with experience in the field of IP law can advise on matters pertaining to copyright law.

For more informations: https://www.grprainer.com/en/legal-advice/ip-law/copyright-law.html

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UrheberrechtPressemitteilungen
news-3488 Fri, 03 May 2019 07:59:09 +0200 Resale price maintenance – Bundeskartellamt imposes fine https://www.grprainer.com/en/news-and-press/detail/news/resale-price-maintenance-bundeskartellamt-imposes-fine.html The Bundeskartellamt, Germany’s Federal Cartel Office, has imposed a total fine of around 13.4 million euros on a bicycle wholesaler for entering into resale price maintenance arrangements with 47 retailers.

Resale price maintenance entails the producer requiring its customers to sell the goods at a fixed price or not go below a certain price. We at the commercial law firm GRP Rainer Rechtsanwälte note that, as a consequence, resale price maintenance hampers competition and consistently violates the Gesetz gegen Wettbewerbsbeschränkungen (GWB), Germany’s Act against Restraints of Competition.

A recent investigation by the Bundeskartellamt concluded that a bicycle wholesaler had committed such a violation. As disclosed by the former on January 29, 2019, the wholesaler reportedly entered into agreements with its member companies concerning the retail prices of certain bicycle models. These were said to have prevented the independent retailers from undercutting a minimum selling price specified by the wholesaler, with the latter also checking for compliance with the pricing policy. According to the Bundeskartellamt, the overall effect of this was to significantly impede price competition among the members of the purchasing cooperative and thus ultimately have a negative impact on end consumers.

While noting that temporary group-wide price controls are possible within a narrow framework, e.g. in order to implement joint promotional campaigns, the Bundeskartellamt found that the boundaries had clearly been overstepped in this case, resulting in a situation analogous to a distribution cartel among the participating merchants. Some of the pricing arrangements dated back to 2007 and only came to an end when the wholesaler’s business premises were searched in February of 2015.

Agreements between companies that restrict or impede competition are prohibited under the GWB. Price-fixing arrangements are typically considered to be unlawful agreements of this kind.

Violations of competition or antitrust law may be met with severe penalties. Yet violations are by no means always as obvious as in the case of illegal price-fixing arrangements. Even individual clauses within agreements may be deemed to be anticompetitive and give rise commensurate sanctions. That is why it is advisable to have agreements reviewed for violations of competition or antitrust law.

Lawyers with experience in the fields of competition and antitrust law can offer advice.

For more informations: https://www.grprainer.com/en/legal-advice/antitrust-law.html

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KartellrechtPressemitteilungen
news-3486 Thu, 02 May 2019 11:16:58 +0200 Bundeskartellamt imposes fine due to unlawful supply association https://www.grprainer.com/en/news-and-press/detail/news/bundeskartellamt-imposes-fine-due-to-unlawful-supply-association.html The Bundeskartellamt, Germany’s Federal Cartel Office, has imposed a fine of around 1.4 million euros on an asphalt manufacturer for entering into illegal arrangements in connection with supply associations.

According to an announcement by the Bundeskartellamt, it has imposed a fine of around 1.4 million euros on an asphalt manufacturer for being party to an illegal cartel agreement reported to have encompassed unlawful arrangements relating to price, territory, customers and quotas for the supply of construction companies between 2005 and 2013. Another company involved in the arrangements went unpunished for participating in the leniency program. The proceedings against other companies were dropped.

According to the Bundeskartellamt, the asphalt manufacturers began coordinating on orders and forming supply associations as early as the end of the 1990s. It found these supply associations unnecessary in terms of their capacity in many cases or that the need for their existence had not been reviewed. The Bundeskartellamt claimed that since 2005 more than 100 supply associations have emerged from the arrangements in question. The cartel watchdog deemed the supply associations unnecessary, arguing that the orders were generally capable of being fulfilled by one of the companies. Accordingly, the decision to form supply associations served primarily to stabilize the market as a means of avoiding price and bidding wars among themselves, thus hindering fair competition.

We at the commercial law firm GRP Rainer Rechtsanwälte note that while supply associations and other forms of cooperation between companies are not unlawful as a matter of principle, they must always operate within the existing legal framework in order to avoid violating antitrust or competition law. Because violations of antitrust law are by no means always obvious, it is advisable for companies to obtain legal advice before agreeing to enter into supply associations or other forms of cooperation.

Violations of competition and antitrust law are consistently met with severe penalties. This is true not only for cases involving illegal arrangements relating to price or territory, but also for violations with the respect to which it is much less apparent that an offense has been committed. For instance, even individual contractual clauses may be in violation of applicable laws. Lawyers with experience in the fields of antitrust and competition law can advise companies and assist in enforcing or fending off claims in the event of violations of antitrust or competition law.

For more informations: https://www.grprainer.com/en/legal-advice/antitrust-law.html

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KartellrechtPressemitteilungen
news-3484 Mon, 29 Apr 2019 08:43:51 +0200 GRP Rainer Rechtsanwälte – Report on extraordinary termination of a commercial agency agreement https://www.grprainer.com/en/news-and-press/detail/news/grp-rainer-rechtsanwaelte-report-on-extraordinary-termination-of-a-commercial-agency-agreement.html Either party to a commercial agency agreement can give the other extraordinary notice of termination for good cause. One important example of good cause is where there is a breakdown in the relationship of trust.

As in the case of other agreements, either party to a commercial agency agreement can give the other extraordinary notice of termination with immediate effect for good cause. Our experience at the commercial law firm GRP Rainer Rechtsanwälte has revealed that a common point of contention with respect to extraordinary termination is whether there is in fact good cause justifying termination of the contractual relationship.

Following the legislature’s failure to provide a clear definition of “good cause” justifying extraordinary notice of termination, the Oberlandesgericht (OLG) München, Munich’s Higher Regional Court, delivered a ruling on February 8, 2018 that has brought greater clarity to this issue. The Court held that if the relationship of trust between the parties to the agreement has broken down irretrievably, the commercial agency agreement can be extraordinarily terminated because any further collaboration can then no longer be reasonably expected in light of all the circumstances. In every instance, the outcome is contingent on a detailed assessment of each individual case (Az.: 23 U 1932/17).

In the instant case, the two parties had concluded a commercial agency agreement. This set out in writing their common understanding that the plaintiff’s husband would carry out the role of commercial agent on her behalf. In doing so, he saved extensive data records on his personal computer without authorization. The company viewed this as a breach of trust and issued notice of extraordinary dismissal. The plaintiff, having refused to readily accept this, demanded payment of bonuses, commission as well as an indemnity payment due to commercial agents.

The OLG München concluded that the notice of extraordinary dismissal was effective. It ruled that downloading and saving the data records onto a personal computer had not been necessary for the purposes of carrying out the role of commercial agent, and that the plaintiff needed to take responsibility and be held accountable for her husband’s conduct. The Court went on to state that downloading and saving the files without authorization had resulted in the irretrievable breakdown of the relationship of trust between the parties. According to the OLG München, this meant that it was no longer reasonable to expect the parties to continue working together until the end of the ordinary notice period. Moreover, the misconduct was said to have been so severe that no prior written warning was necessary.

Lawyers with experience in the field of commercial law can offer advice should legal disputes arise.

For more informations: https://www.grprainer.com/en/legal-advice/commercial-law/commercial-agency-law.html

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HandelsvertreterrechtPressemitteilungen
news-3482 Wed, 24 Apr 2019 11:28:33 +0200 GRP Rainer Rechtsanwälte – Assessment of suitable arrangements for business succession https://www.grprainer.com/en/news-and-press/detail/news/grp-rainer-rechtsanwaelte-assessment-of-suitable-arrangements-for-business-succession.html A lot of small and medium-sized businesses are or will soon be faced with the issue of business succession. However, searching for a suitable successor can prove challenging in many cases.

According to a study conducted by the Kreditanstalt für Wiederaufbau (KfW), the German reconstruction loan corporation, over 500,000 small and medium-sized businesses are set to make plans for business succession in the coming years, with approximately 100,000 businesses expected to have a successor at the helm by the end of 2019. The problem, however, is that, according to the study, a successor has yet to be found in many instances.

We at the commercial law firm GRP Rainer Rechtsanwälte can report that a lot of businesses have a hard time appraising a suitable successor. A number of factors can compound the difficulty in making arrangements for business succession.

Particularly in the case of family businesses, there is frequently an expectation that the baton will be passed to the next generation. The first issue that needs to be addressed here is whether the children or other relatives are interested in carrying on the business in the first place, and whether they are suitably qualified to run the business. If a successor emerges from within the family, it is particularly important to consider the transition’s implications for tax and succession.

If a successor is not found from within the family, the next option is often to search for a buyer. However, this can prove to be challenging, as there are more company bosses looking to step down in the near future than there are potential buyers. This makes it all the more important to begin making arrangements for business succession at an early stage. Selling a business can be particularly time consuming and should therefore be planned well in advance, especially since the potential buyer will often have to grapple with the issue of financing, whereas the seller is aiming to get as good a price as possible. For this reason, the initial priority should be to evaluate the business in order to obtain an appropriate selling price. In addition to factors such as the order situation, balance sheets and existing employment contracts, claims arising from succession law should also be considered when a business is being sold. If the business has multiple shareholders, it may be beneficial to sell one’s shares to fellow shareholders.

Business succession is a complex topic that needs to be addressed in a timely manner. Experienced lawyers can ensure a smooth transition of the business.

For more informations: https://www.grprainer.com/en/legal-advice/private-clients/law-of-succession/business-succession.html

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UnternehmensnachfolgePressemitteilungen
news-3480 Tue, 23 Apr 2019 10:01:22 +0200 GRP Rainer Rechtsanwälte – Experience dealing with claims relating to D&O insurance https://www.grprainer.com/en/news-and-press/detail/news/grp-rainer-rechtsanwaelte-experience-dealing-with-claims-relating-to-do-insurance.html In recent times, public pressure has continued to mount on managers in cases involving claims arising from damage or loss. Governing bodies and executives can insure themselves against the risk of liability by taking out a D&O insurance policy.

Managers, boards of directors, managing directors as well as other governing bodies and executives bear a great deal of responsibility and are subject to ever-increasing pressure when claims arising from damage or loss emerge. Mere negligence may see managers facing personal liability and damages claims. To reduce the risk of personal liability, many companies take out a D&O (directors and officers) insurance policy for their governing bodies and executives. Of course, there is always the possibility that the insurer will not want to stand good for the damage or loss cited in a claim. In our experience at the commercial law firm GRP Rainer Rechtsanwälte, this appears to be particularly common in cases involving internal liability, thus making it all the more important to tailor the D&O insurance policy to the specific risks faced by the manager(s) in question.

As you would expect, D&O insurance ought to cover damage or loss in cases involving external liability where claims are brought by third parties. However, it should also give rise to an obligation to cover cases dealing with internal liability. Yet time and time again we see problems arise when the manager directly assigns his or her right of indemnity in relation to the insurer to the aggrieved company. The insurance company will then often argue that any claim brought by the company against the manager is not serious and instead intended only to give rise to an event covered by the insurance policy.

The Bundesgerichtshof (BGH), Germany’s Federal Supreme Court, has since bolstered the position of policyholders in this regard. The BGH held that insured managers are allowed to directly assign their right of indemnity to the aggrieved company and that the latter can then directly assert its claims against the D&O insurer. The seriousness of the claims was said not to be relevant; written recourse by the manager is sufficient to give rise to an insured event (Az.: IV ZR 304/13 and IV ZR 51/14).

A word of caution is nonetheless in order if governing bodies or executives go on to make payments following the onset of insolvency. According to a ruling from June 20, 2018 of the Oberlandesgericht Düsseldorf, the Higher Regional Court of Düsseldorf, D&O insurance companies are not obliged to pay out if unlawful payments were made after the onset of insolvency (Az.: I-4 U 93/16).

This ruling may result in significant gaps in the coverage provided by D&O insurance policies. These ought to be reviewed in appropriate cases. Lawyers with experience in the field of company law can advise businesses and managers alike.

For more informations: https://www.grprainer.com/en/legal-advice/company-law.html

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GesellschaftsrechtPressemitteilungen
news-3477 Mon, 15 Apr 2019 09:58:42 +0200 GRP Rainer Rechtsanwälte – Assessing a settlement clause after termination of managing director’s employment contract https://www.grprainer.com/en/news-and-press/detail/news/grp-rainer-rechtsanwaelte-assessing-a-settlement-clause-after-termination-of-managing-directors-em.html A settlement clause may be invalid if material circumstances are withheld from a termination agreement between company and managing director.

A company that wants to part ways with a managing director often concludes a termination agreement. This agreement typically includes a settlement clause, according to which the parties agree to indemnify each other against all mutual claims. We at the commercial law firm GRP Rainer Rechtsanwälte note that the managing director might nonetheless be held liable. For the purposes of assessing whether liability has been effectively excluded, the key factor is whether all of the material circumstances were disclosed within the framework of the termination agreement. A ruling of the Oberlandesgericht (OLG) München, the Higher Regional Court of Munich, from April 18, 2018 demonstrates that if circumstances of this kind are fraudulently concealed, the managing director may continue to be liable and required to pay damages (Az.: 7 U 3130/17).

In the instant case, a GmbH and its managing director had terminated the managing director’s employment contract. The termination agreement featured a settlement clause, according to which all mutual claims arising from the employment contract were said to have been satisfied. The employment contract included provisions pursuant to which the managing director was required to first obtain the written approval of the general meeting of the shareholders before concluding rental agreements with a term of longer than three years and annual rent of more than 24,000 euros.

However, the managing director did not comply with these requirements; instead, several weeks before his employment contract was terminated, he concluded a rental agreement with a ten-year term and an annual rent of around 51,000 euros. He failed inform the general meeting of the shareholders of this, even while concluding the termination agreement. The rental agreement was terminated in return for payment of compensation in the amount of 60,000 euros. The GmbH later demanded that this amount be reimbursed by its former managing director.

The OLG München awarded the GmbH the damages. By concluding the rental agreement without seeking the approval of the general meeting of the shareholders, the managing director was said to be in breach of his obligations. The Court held that he could not invoke the settlement clause in the termination agreement, because he had exceeded his authority by concluding the rental agreement. The OLG München went on to state that he failed even at a later date to inform the shareholders of his actions and instead opted to fraudulently conceal them. The settlement clause was consequently found to be inapplicable.

Lawyers with experience in the field of company law can advise companies and managing directors.

For more informations: https://www.grprainer.com/en/legal-advice/company-law.html

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GesellschaftsrechtPressemitteilungen
news-3475 Tue, 09 Apr 2019 08:42:59 +0200 Heavy fines for violating EU Geo-Blocking Regulation https://www.grprainer.com/en/news-and-press/detail/news/heavy-fines-for-violating-eu-geo-blocking-regulation.html Regulation (EU) 2018/302, i.e. the EU Geo-Blocking Regulation, has been in force since December 3, 2018. It obliges merchants to allow cross-border shopping. Violations may be met with severe penalties.

The Geo-Blocking Regulation is supposed to prevent unlawful discrimination in online shopping on the basis of citizenship, residence or the location of an establishment within the EU internal market. What this means in practice is, among other things, that online merchants are no longer allowed to deny customers from another EU member state access to their website and redirect them to websites in their country of origin, with the latter often featuring different terms and prices or a different selection of products and services. We at the commercial law firm GRP Rainer Rechtsanwälte note that the Geo-Blocking Regulation is meant to put an end to this and ensure that the same terms apply to all EU citizens.

Violations of the Geo-Blocking Regulation may be met with severe penalties. A case in point is a decision of the European Commission from December 17, 2018 to impose a fine in the amount of almost 40 million euros on a fashion company. The European Commission claimed that the latter had acted to prevent consumers from other EU member states from viewing advertising and making purchases online. By engaging in this form of geo-blocking, the company was said to have violated EU competition law.

The clothing company in question designs and sells various fashion brands, and makes use of a selective distribution system when choosing authorized dealers. While this arrangement is legal under EU competition law, consumers have the right to purchase the goods from any authorized dealer, even those based in another EU member state. At the same time, authorized dealers are entitled to offer products that fall within the scope of the distribution agreement online as well as promote and sell the relevant goods across borders.

Anti-trust investigations were initiated by the European Commission as early as the summer of 2017 to look into whether the clothing company was obstructing retailers in their efforts to sell across borders within the EU’s internal market. The competition regulators concluded that obstruction was taking place by means of various measures, with this resulting in a compartmentalization of European markets according to the European Commission. This gave rise, for instance, to higher prices in many Eastern European countries than in Western European states.

When violations of European competition law occur, lawyers with experience in the fields of antitrust and competition law can offer advice.

For more informations: https://www.grprainer.com/en/legal-advice/competition-law.html

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WettbewerbsrechtPressemitteilungen
news-3472 Tue, 02 Apr 2019 10:09:51 +0200 LG Wiesbaden – Competitors not entitled to issue a warning in response to violations of the GDPR https://www.grprainer.com/en/news-and-press/detail/news/lg-wiesbaden-competitors-not-entitled-to-issue-a-warning-in-response-to-violations-of-the-gdpr.html In a judgment from November 5, 2018, the Landgericht (LG) Wiesbaden, the Regional Court of Wiesbaden, ruled that competitors are not entitled to issue a formal warning notice in response to violations of General Data Protection Regulation (GDPR) (Az. 5 O 214/18).

The courts continue to deliver different judgments on the issue of whether a violation of the General Data Protection Act, GDPR for short, constitutes a violation of competition law and therefore entitles competitors to issue a formal warning notice. We at the commercial law firm GRP Rainer Rechtsanwälte can report that the Landgericht Wiesbaden has now ruled that competitors cannot issue a formal warning notice pursuant to competition law in response to a violation of the GDPR.

In the instant case, a credit inquiry agency had brought an action for an injunction against a competitor, claiming that the latter was now providing those concerned with incomplete information and only in paper form. The plaintiff saw this as a violation of the GDPR. The LG Wiesbaden nonetheless concluded that the plaintiff was neither entitled to claim nor did it have legal standing as a competitor pursuant to the Gesetz gegen den unlauteren Wettbewerb (UWG), Germany’s Unfair Competition Act.

The LG Wiesbaden took the view that the scope of action and possible measures laid out in the provisions of the GDPR are exhaustive. The Court followed the line of reasoning set out by the Landgericht (LG) Bochum. The latter held that claims brought by competitors are governed exclusively and exhaustively by articles 77 to 84 of the Regulation. Accordingly, not every association is entitled to exercise the rights accruing to an affected person; only certain establishments, organizations and associations operating on a not-for-profit basis are able to do so subject to further conditions. The LG Bochum therefore concluded that the legislature did not intend to extend this right to competitors and that it wished to prevent them from being able to issue their rivals with formal warning notices in response to violations of the GDPR.

Notwithstanding the rulings of the LG Bochum and, more recently, the LG Wiesbaden, the LG Würzburg considered a violation of the GDPR a violation of the UWG. It therefore also recognized the possibility for competitors to issue a formal warning.

There is, as of yet, no unified case law regarding violations of the GDPR. To avoid legal disputes, businesses and traders ought to review whether they are in compliance with data protection requirements. Lawyers experienced in the field of competition law can offer advice.

For more informations: https://www.grprainer.com/en/legal-advice/competition-law.html

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WettbewerbsrechtPressemitteilungen
news-3470 Mon, 01 Apr 2019 08:58:16 +0200 BGH – Official gazettes featuring editorial content are in violation of competition law https://www.grprainer.com/en/news-and-press/detail/news/bgh-official-gazettes-featuring-editorial-content-are-in-violation-of-competition-law.html The state and the press are meant to be separate. This also applies to official municipal gazettes. According to the Bundesgerichtshof (BGH), Germany’s Federal Supreme Court, these publications may be in breach of competition law if they feature editorial contributions.

Freedom of the press is set out in the Grundgesetz, i.e. Germany’s constitution, also known in English as the Basic Law for the Federal Republic of Germany, and mandates a degree of separation between the state and the press. For this reason, difficulties can arise if official gazettes are not limited to public announcements and instead include editorial contributions concerning local events. We at the commercial law firm GRP Rainer Rechtsanwälte note that this runs the risk of violating the principle of separation of state and press, as both the state and local authorities are prohibited from competing with private publishers.

The BGH has now ruled in a judgment from December 20, 2018 that a local authority is not entitled to distribute a free official gazette throughout the entire area of the respective city if its presentation is similar to that of a press publication and it includes editorial contributions. This was found to be in breach of the principle of separation of state and press (Az.: I ZR 112/17).

In the instant case, a publisher had sued a local authority that had distributed a complimentary official municipal gazette featuring editorial contributions and advertisements. In doing so, the local authority was accused of violating the Gesetz gegen den unlauteren Wettbewerb (UWG), Germany’s Unfair Competition Act, and thus competition law. Like the courts of lower instance before it, the BGH agreed with the publisher’s line of reasoning.

The BGH held that by distributing the complimentary official gazette, the local authority was violating the principle of separation of state and press. It further ruled that this principle is a regulation governing market behavior, and violating this kind of regulation is therefore anti-competitive and justifies injunction suits.

The Court went on to state that for the purposes of assessing specific municipal publications, it is necessary to consider their form and content as well as evaluate them from a holistic perspective. According to the BGH, state publications must be identifiable as such and limited to factual information. Publishing official communications and reporting on the plans of the local administration and the municipal council are acceptable, whereas press-like reporting on social life in the community is not. This was said to be the original and primary purpose of the local press and not the state.

For more informations: https://www.grprainer.com/en/legal-advice/competition-law.html

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WettbewerbsrechtPressemitteilungen
news-3467 Fri, 22 Mar 2019 10:08:39 +0100 BGH – Advertising must not circumvent price controls on medicines https://www.grprainer.com/en/news-and-press/detail/news/bgh-advertising-must-not-circumvent-price-controls-on-medicines.html The Bundesgerichtshof (BGH), Germany’s Federal Supreme Court, has set out new restrictions on pharmacies enticing new customers, ruling that readily offering rewards for referring new customers is now allowed.

Pharmacies are subject to increasing competitive pressures. This is partly due to online mail-order pharmacies. As such, it has become all the more important for pharmacies to secure the loyalty of their existing customers and acquire new ones. This is true for both mail-order pharmacies as well as on-site pharmacies. However, there are restrictions relating to the acquisition of customers. We at the commercial law firm GRP Rainer Rechtsanwälte note that offering rewards for referring customers is not allowed if doing so circumvents price controls on medicines.

In Germany, there are price controls on medicines that online and local pharmacies are equally bound to comply with. These price controls cannot be circumvented by offering customers a reward for referring new customers where the reward can also be redeemed when purchasing medicinal products that are subject to price controls. According to a ruling of the Bundesgerichtshof from November 29, 2018, this constitutes a violation of the Heilmittelwerbegesetz (HWG) and the Gesetz gegen den unlauteren Wettbewerb (UWG), Germany’s Act on the Advertising of Medicinal Products and Act Against Restraints of Competition respectively (Az.: I ZR 237/16).

In the instant case, a mail-order pharmacy had advertised that it would reward its customers by paying them ten euros for referring a new customer. A professional body representing pharmacists decided to bring a legal action against this. Like the courts of lower instance before it, the BGH largely granted the action.

While pharmacies are, in principle, allowed to pay their customers rewards, price controls on medicines must not be circumvented in doing so. Yet that is exactly what happened in this case. The reward was paid when an order was placed by a new customer, even if said customer ordered medicinal products that are subject to price controls. The BGH concluded that the mail-order pharmacy was thus guilty of anti-competitive conduct.

The Court went on to state that this finding is not called into question by the fact that it is the referring customer and not the new customer who receives the reward. The BGH reasoned that the former obtains an advantage from purchasing the medicinal product that is subject to price controls, which creates the overall impression that purchasing the medicine from the mail-order pharmacy is cheaper.

Advertising is a fine balancing act for physicians, pharmacists and practitioners of other health professions that can give rise to violations of competition law. Lawyers with experience in the field of competition law can offer advice.

For more informations:

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

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WettbewerbsrechtPressemitteilungen
news-3464 Fri, 15 Mar 2019 09:12:52 +0100 Illegal advertisement of effect of a medicinal product https://www.grprainer.com/en/news-and-press/detail/news/illegal-advertisement-of-effect-of-a-medicinal-product.html It is illegal to advertise a specific effect attributed to a medicinal product if said effect is based merely on laboratory tests and has not been demonstrated in relation to humans.

The effect a medicinal product has on humans is, of course, critical information for consumers. That is why advertising statements regarding a specific effect of a product are deemed to be misleading if said effect is based merely on laboratory tests and has not been demonstrated in relation to humans. In these circumstances, no clinical relevance can be said to have been demonstrated with respect to humans. We at the commercial law firm GRP Rainer Rechtsanwälte note that this kind of misleading advertising is in breach of competition law.

This view was upheld by the Landgericht (LG) Frankfurt a.M., the Regional Court of Frankfurt am Main, in a ruling from August 17, 2018 (Az.: 3-10 O 22/18). In the instant case, a pharmaceutical company had promoted a cough syrup with the term “antiviral”, as well as with reference to antiviral properties having been demonstrated in a laboratory environment. An organization for the enforcement of competition law and against unfair competition filed injunction suits in response to this advertisement, claiming that it violated competition law. It argued that consumers would assume from the advertising statements that the medication or remedy has an antiviral effect. This meant that its application was being promoted for a field with respect to which it had not been approved.

The Landgericht Frankfurt ruled that the cough syrup manufacturer was in violation of the Heilmittelwerbegesetz (HWG), the German law on the advertising of medicinal products, according to which it is illegal to advertise medicinal products if the medication or remedy requires authorization but has not been authorized, or if the advertisement features applications that are not covered by the authorization. The LG Frankfurt took the view that the latter scenario applied to this case. It held that no clinical relevance had been demonstrated with respect to humans because the antiviral properties had only been established in a laboratory environment. Thus, the statements regarding the relevant effect had not been confirmed in relation to humans and the medicine or remedy’s application was being promoted for a field with respect to which it had not been approved. For this reason, the LG Frankfurt concluded that a violation of the HWG had occurred.

Given the ever-present possibility of violating competition law, advertising is often akin to tightrope walking for businesses. This is particularly true insofar as advertising and statements relate to medicinal products. Lawyers with experience in the field of competition law can offer advice as well as enforce or fend off claims arising from violations of competition law.

For more informations:

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

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WettbewerbsrechtPressemitteilungen
news-3462 Thu, 14 Mar 2019 10:22:06 +0100 BGH – A “Praxisklinik” must maintain the option of admitting inpatients https://www.grprainer.com/en/news-and-press/detail/news/bgh-a-praxisklinik-must-maintain-the-option-of-admitting-inpatients.html A medical practice cannot advertise using the term “Praxisklinik” (“clinic” in English) if it does not provide overnight accommodation. That was the view upheld by the Bundesgerichtshof (BGH) in a ruling from October 17, 2018 (Az.: I ZR 58/18).

The Oberlandesgericht (OLG) Hamm, the Higher Regional Court of Hamm, had already concluded in a judgment from February 27 of 2018 that a dental practice which will not admit its patients as inpatients even temporarily cannot advertise using the term “Praxisklinik”. In doing so, it overturned the ruling at first instance of the Landgericht Essen, the Regional Court of Essen (Az.: 4 U 161/17). We at the commercial law firm GRP Rainer Rechtsanwälte note that this kind of advertising is misleading to consumers, because the term “Klinik” gives rise to the expectation among consumers that there is at least the possibility of being admitted as an inpatient.

The dentist in the case in question nonetheless took the view that when confronted with the term “Klinik”, consumers expectations extend merely to the possibility of undergoing a surgical procedure. Given that this description applies to his practice, he brought a complaint against the decision to refuse leave to appeal. The complaint has since been dismissed by the Bundesgerichtshof (BGH), Germany’s Federal Supreme Court.

The Bundesgerichtshof did not follow the dentist’s line of reasoning and instead upheld the OLG Hamm’s view that consumers expect from a “Klinik” at least the facilities necessary for temporary inpatient admission overnight. It held that this is true even if inpatient admission only becomes necessary in exceptional circumstances. For this reason, the advertising was found to be misleading to consumers insofar as this service was not provided.

The Court went on to state, however, that the term “Praxisklinik” is not only misleading to consumers but also harmful to competitors, since appearing to provide for inpatient admission as an additional service allows the dental practice to present itself as a preferable alternative to a dental practice that solely provides outpatient services as well as an alternative worth considering to a “Zahnklinik” (dental clinic) in the proper meaning of the word.

As important as advertising is for many businesses and service providers, it is equally important to bear in mind how easy it is to mislead consumers and violate competition law. Violations of competition law can give rise to various sanctions, including formal warnings, injunction suits and damages claims. Lawyers with experience in the field of competition law can offer advice and assist in enforcing or fending off claims arising from violations of competition law.

For more informations:

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

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WettbewerbsrechtPressemitteilungen
news-3460 Mon, 11 Mar 2019 09:54:49 +0100 CJEU – The taste of a food product is not eligible for copyright protection https://www.grprainer.com/en/news-and-press/detail/news/cjeu-the-taste-of-a-food-product-is-not-eligible-for-copyright-protection.html The taste of a food product is not eligible for copyright protection. That was the verdict of the Court of Justice of the European Union (CJEU) in a ruling from November 13, 2018 (Az.: C-310/17).

Intellectual creations and expressions can be classified as a “work” and protected by copyright. We at the commercial law firm GRP Rainer Rechtsanwälte note, however, that according to this ruling by the Court of Justice of the European Union the taste of a food product cannot be classified as a work and consequently is not eligible for copyright protection.

The case before the CJEU involved a dispute between two cheese producers. A Dutch company with the rights to a particular spreadable cheese took the view that a similar-tasting cheese from a supermarket chain infringed its copyright in the taste of its cheese, claiming that the taste of the spreadable cheese constitutes a work protected by copyright and that the cheese belonging to the supermarket chain is a reproduction of that work.

The CJEU did not follow this line of reasoning, ruling instead that in order to be protected by copyright, the taste of a food product must be capable of being classified as a work. Classification as a work requires that the subject matter concerned is an original intellectual creation. Copyright protection may be granted to expressions, but not to ideas, procedures, methods of operation or mathematical concepts. Accordingly, a work needs to be expressed in a manner which makes it identifiable with sufficient precision and objectivity. The CJEU held that the taste of a food product cannot be identified with precision and objectivity.

The Court went on to state that unlike pictorial, literary, musical or cinematographic works that have a precise and objective expression, the taste of a food product is subjective. This subjective experience is variable and depends on, among other things, factors particular to the individual tasting the product in question, such as their age, preferences, etc. The Court also held that it is not possible in the current state of scientific development to achieve by technical means a precise and objective identification of the taste of a food product. The CJEU therefore concluded that the taste of a food product is not eligible for copyright protection.

Even though the taste of a food product cannot be protected by copyright, it may be possible to extend copyright protection to the product itself. Lawyers with experience in the field of IP law can advise on matters pertaining to copyright and trademark law.

For more informations:

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

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UrheberrechtPressemitteilungen
news-3459 Thu, 07 Mar 2019 10:17:01 +0100 BGH rules on protection of a three-dimensional trademark https://www.grprainer.com/en/news-and-press/detail/news/bgh-rules-on-protection-of-a-three-dimensional-trademark.html Three-dimensional signs cannot be registered as a trademark if they consist of a shape that is necessary in order to obtain a technical result.

When registering a sign as a trademark, businesses need to be aware that there are various possible grounds for refusal of trademark protection. One such ground for refusal may be the shape in the case of three-dimensional trademarks. We at the commercial law firm GRP Rainer Rechtsanwälte note that trademark law stipulates there can be no trademark protection afforded to signs consisting of a shape that is necessary to obtain a technical result.

The Bundesgerichtshof (BGH), Germany’s Federal Supreme Court, will deliver a ruling on February 14, 2019 (reference: I ZB 114/17) on whether the shape of certain coffee capsules can be protected. The case has an extensive history. The proprietor of the trademark sells coffee capsules with a particular shape and had applied for trademark protection for “Kaffee, Kaffeeextrakte und kaffeebasierte Zubereitungen, Kaffeeersatz und künstliche Kaffeeextrakte”, i.e. coffee, coffee extracts and coffee-based preparations, coffee substitutes and artificial coffee extracts. The proprietor also owned a patent that has since lapsed for a cartridge containing ground coffee designed for a drinks machine.

In response to a claim brought by a competitor, the Bundespatentgericht, Germany’s Federal Patent Court, suspended the international trademark’s protection in relation to Germany in a ruling from November 17, 2017 (Az.: 25 W (pat) 112/14). Trademark protection was suspended to the extent that coffee, coffee extracts and coffee-based preparations, coffee substitutes and artificial coffee extracts are concerned. The Bundespatentgericht justified this decision with reference to there being grounds for refusal pursuant to sec. 3 para. 2 no. 2 of the Markengesetz, the German Trademark Act. The essential characteristics of the mark in question were said to have a technical function that make it well suited for use in a coffee capsule machine. However, it was also stated that the Markengesetz is meant to prevent trademark proprietors from monopolizing technical solutions. The proprietor of the trademark has filed a legal appeal against the Bundespatentgericht’s judgment. The BGH must now rule on the matter.

Trademark protection is of great importance to businesses. When applying for registration, it is a good idea to ensure that this will not infringe existing trademark rights and that there are no grounds for refusal of registration. Lawyers with experience in the field of trademark law can offer advice.

For more informations:

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

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MarkenrechtPressemitteilungen
news-3457 Tue, 05 Mar 2019 10:38:24 +0100 BGH finds false statements about product category misleading https://www.grprainer.com/en/news-and-press/detail/news/bgh-finds-false-statements-about-product-category-misleading.html Consumers must not be misled regarding the essential characteristics of a product. According to the case law of the Bundesgerichtshof (BGH), Germany’s Federal Supreme Court, the allocation of a product to a product category represents one of its essential characteristics.

Germany’s Unfair Competition Act, the Gesetz gegen den unlauteren Wettbewerb (UWG), provides that consumers must not be misled regarding the essential characteristics of a product or service. We at the commercial law firm GRP Rainer Rechtsanwälte note that examples of essential characteristics include the availability, benefits, risks, composition or properties associated with the product or service in question. In a ruling from June 21, 2018, the Bundesgerichtshof held that if a product belongs to a product category, this represents one of its essential characteristics if it serves to differentiate the product from other categories (Az.: I ZR 157/16).

The instant case concerned an engine oil that was referred to as “vollsynthetisch”, i.e. fully synthetic. Fully synthetic engine oils are generally located in the upper price segment because they are more expensive to produce than other oils. The plaintiff asserted that the use of the term “vollsynthetisch” in relation to the defendant’s engine oil was misleading, arguing that it did not satisfy the conditions required for it to be deemed a fully synthetic engine oil.

The Oberlandesgericht (OLG) Köln, the Higher Regional Court of Cologne, had granted the claim and prohibited the defendant from continuing to refer to the engine oil in question as fully synthetic for competition purposes. It held that the average consumer is entitled to expect an engine oil advertised as fully synthetic to be in line with products with this term in their name that have been available to date, since this is what informs consumers understanding of what a fully synthetic engine oil is. The OLG Köln went on to state that if the oil is obtained via another production process, it is misleading to then promote the relevant oil as “vollsynthetisch”, a term that is already established in the market.

The BGH upheld this view, ruling that the term was misleading because it gave consumers a false impression. When assessing whether it was misleading, the Court noted that it was not the specific properties of the product that were decisive but rather consumers’ expectation that fully synthetic oils belong to a product category of artificially produced oils that are located in the upper price segment and of high quality due to the complex production process involved. The Court concluded that it is therefore misleading if the oil is in fact obtained via another production process.

Violations of competition law can be met with severe penalties. Lawyers who are experienced in the field of competition law can offer advice and assist in fending off or enforcing claims arising from violations of this kind.

For more informations:

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

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WettbewerbsrechtPressemitteilungen
news-3454 Wed, 27 Feb 2019 11:39:01 +0100 GRP Rainer Rechtsanwälte – Report on insolvency and liability of managing directors https://www.grprainer.com/en/news-and-press/detail/news/grp-rainer-rechtsanwaelte-report-on-insolvency-and-liability-of-managing-directors.html A managing director’s obligations include filing for insolvency on behalf of the company in a timely manner. He or she may be held personally liable for failing to fulfil this obligation.

Managing directors who fail to fulfil their obligations may be held personally liable as a result. A managing director’s obligations include filing for insolvency in due time if the company is insolvent or over-indebted. We at the commercial law firm GRP Rainer Rechtsanwälte can report that it is often difficult to accept the onset of a company’s insolvency. In many cases, there is also frequently a lack of clarity surrounding the latest point in time by when one needs to have filed for insolvency.

We at GRP Rainer Rechtsanwälte note that it is necessary to file for insolvency without undue delay, but no later than three weeks after the company becomes insolvent or over-indebted. A company is deemed to be over-indebted if its assets no longer cover its existing liabilities. Moreover, there is a presumption of insolvency if the company is no longer able to settle the bulk of its liabilities. While this means that the company is to some extent still in a position to make payments, it also represents a risk to managing directors; payments can only continue to be made insofar as they do not diminish the insolvency estate.

During difficult economic times, companies understandably want to continue paying wages to their employees for as long as possible, but they would do well to proceed with caution. Following the onset of insolvency, further payments are only allowed if the consideration in return for the payment offsets the reduction in the value of the insolvency estate. In ruling from July 4, 2017, the Bundesgerichtshof, Germany’s Federal Supreme Court, held that the consideration intended to form part of the insolvency estate needs to be capable of being used by the creditors (Az.: II ZR 319/15). The Court went on to note, however, that services and wages are generally not suitable for this purpose. This means that if in these kinds of cases the managing director nevertheless arranges for the payment of service providers or the remittance of wages and salaries, he or she may be personally liable to make restitution.

Due to the substantial risk of personally liability they face, it is imperative that managing directors do not ignore the signs of imminent insolvency but instead proceed with caution. Lawyers who are experienced in the field of company law can offer professional advice in these kinds of crisis situations.

For more informations:

https://www.grprainer.com/en/legal-advice/company-law/restructuring-insolvency.html

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Restrukturierung InsolvenzPressemitteilungen
news-3450 Mon, 18 Feb 2019 09:13:42 +0100 GRP Rainer Rechtsanwälte – Report on commercial agents’ right to claim compensation https://www.grprainer.com/en/news-and-press/detail/news/grp-rainer-rechtsanwaelte-report-on-commercial-agents-right-to-claim-compensation.html Commercial agents are entitled to claim compensation. The European Court of Justice (ECJ) has since clarified that this right persists even if the commercial agency agreement is terminated during the probationary period.

Commercial agents are entitled to claim compensation pursuant to paragraph 89b of the Handelsgesetzbuch (HGB), Germany’s Commercial Code, if the commercial agency agreement is terminated. Because the company frequently continues to profit from the contacts established by the commercial agent and maintain business relations with these clients after the agreement has come to an end, the intention behind this entitlement is to enable agents to benefit from these business dealings as well. The right to claim compensation cannot simply be excluded. We at the commercial law firm GRP Rainer Rechtsanwälte can equally report, however, that this same right has also given rise to legal disputes time and time again.

There are certainly circumstances under which the right to claim compensation can lapse. This can happen if, for instance, the commercial agent is the one who terminates the agreement or misconduct on his or her part resulted in the agreement being terminated. One factor that does not affect the right to claim compensation, on the other hand, is the duration of the contractual relationship or whether the commercial agent is still on employment probation. That was the verdict of the European Court of Justice in a judgment from April 19, 2018 (Az.: C-645/16).

In the instant case, the commercial agency agreement provided for, among other things, a twelve-month probation period. During this period of time, both parties were entitled to terminate the agreement subject to a specified notice period. After the commercial agent clearly failed to meet the company’s expectations as well as the agreed targets, the latter decided to avail itself of this right of termination. The commercial agent subsequently asserted their right to claim compensation. The company took the view that this right does not arise in the event of the agreement being terminated during the probationary period.

The dispute made it all the way to the ECJ, which ruled in favor of the commercial agent. A commercial agent’s rights to compensation are regulated in an EU regulation. The ECJ held that the rights to compensation and damages provided for under this regulation are meant to indemnify the commercial agent for the services performed by him or her from which the company continues to benefit from or for the costs and expenses he or she incurred. The Court went on to state that this entitlement cannot be dismissed on the basis that the agreement was terminated during the probationary period.

Lawyers who are experienced in the field of commercial law can serve as expert advisors to companies and commercial agents alike.

For more informations:

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

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HandelsvertreterrechtPressemitteilungen
news-3449 Thu, 14 Feb 2019 10:45:30 +0100 GRP Rainer Rechtsanwälte – Experience dealing with abuses of a dominant market position and violations of antitrust law https://www.grprainer.com/en/news-and-press/detail/news/grp-rainer-rechtsanwaelte-experience-dealing-with-abuses-of-a-dominant-market-position-and-violatio.html Abuse of a dominant market position or superior market power constitutes a violation of antitrust law and can be sanctioned accordingly.

In a judgment from January 23, 2018 on the so-called “Anzapfverbot”, i.e. the prohibition on demanding unjustified benefits from suppliers, the Bundesgerichtshof (BGH), Germany’s Federal Supreme Court, further tightened the rules regarding abuse of a dominant market position (Az.: KVR 37/17). According to the Karlsruhe judges’ ruling, if the business occupying a dominant market position asks a contractual partner to grant it advantages in the absence of an objective justification for these advantages, this is enough to give rise to a presumption of a violation of antitrust law. We at the commercial law firm GRP Rainer Rechtsanwälte note that the judgment illustrates the need for experience when two or more parties are negotiating terms to avoid overstepping the boundaries for violating either competition or antitrust law.

In the instant case, the business in question had gone too far with its demands and abused its dominant market position and superior market power by demanding more favorable terms from its suppliers in the form of discounts and benefits. The BGH deemed this a violation of antitrust law due to the absence of any kind of consideration or objective justification.

Following the BGH’s ruling, suppliers are now better protected in the event of businesses in a dominant market position exerting pressure on them with the intention of more or less forcing them to agree to different terms. While the Court’s decision does not mean that negotiations are no longer permitted as a means of achieving the best possible outcome for one’s company, the ruling does necessitate care and sensitivity as well as an objective justification in order to remain within the confines of the law.

According to the Gesetz gegen Wettbewerbsbeschränkungen (GWB), Germany’s Act Against Restraints of Competition, a business is considered to be in a dominant market position if it has no competitors or holds a paramount market position, with the result that the business is not exposed to any substantial competition. A business is deemed to have abused this kind of market power if it asks its contractual partners to grant it advantages without an objective justification for doing so.

Lawyers who are experienced in the fields of antitrust and competition law can advise businesses and enforce or fend off claims in the event of violations of antitrust or competition law.

For more informations:

https://www.grprainer.com/en/legal-advice/antitrust-law.html

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KartellrechtPressemitteilungen
news-3444 Mon, 04 Feb 2019 08:27:05 +0100 OLG Frankfurt – Misleading advertising by carrying over likes and reviews https://www.grprainer.com/en/news-and-press/detail/news/olg-frankfurt-misleading-advertising-by-carrying-over-likes-and-reviews.html Franchisees need to be careful. If they change their franchise partner, they cannot simply carry over the likes and stars they have accumulated to the new company.

Many businesses nowadays choose to present themselves online, including on social networks. Any positive reviews in the form of likes or stars that they accumulate naturally have a positive advertising effect. Franchisees need to be careful nonetheless. They cannot simply carry over the reviews they have accumulated online to the new company if they change their franchise partner. We at the commercial law firm GRP Rainer Rechtsanwälte note that doing so could violate the Gesetz gegen den unlauteren Wettbewerb (UWG), Germany’s Unfair Competition Act, and thus competition law.

In a ruling from June 14, 2018, the Oberlandesgericht (OLG) Frankfurt, the Higher Regional Court of Frankfurt, found carrying over online reviews in a case involving a change of company to be misleading and therefore constituted a violation of competition law (Az.: 6 U 23/17).

In the case in question, the defendant was a franchisee running several restaurants as part of a chain. Facebook users were able to review and like the restaurants on the company’s Facebook page. When the defendant changed its franchise partner, it carried over the reviews to the new company and got more than it had bargained for in the form of an injunction suit. The OLG Frankfurt upheld the judgment of the court of lower instance as well as the plaintiff’s injunction suit.

The OLG noted that the parties are and were in practice in a competitive relationship, ruling that the defendant had violated the UWG by publishing reviews and likes on its Facebook pages for the restaurants of its new partner despite these having been written and given in relation to the original partner’s restaurants.

The OLG Frankfurt went on to say that this kind of advertising is misleading to consumers because it gives the target audience the impression that the reviews were written in reference to the restaurants of the new partner, which was not in fact the case. The fact that the defendant personally created the relevant Facebook pages was said not to preclude the finding that the advertising was misleading; the risk of misleading the public could have been easily eliminated by creating a new Facebook page.

Misleading advertising as well as other violations of competition law can be met with sanctions, including formal warnings and injunction suits. Lawyers who are experienced in the field of competition law can advise on enforcing and fending off claims.

For more informations:

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

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WettbewerbsrechtPressemitteilungen
news-3443 Fri, 01 Feb 2019 09:02:04 +0100 BFH – Claim for transfer of ownership in family home not exempt from inheritance tax https://www.grprainer.com/en/news-and-press/detail/news/bfh-claim-for-transfer-of-ownership-in-family-home-not-exempt-from-inheritance-tax.html A ruling of the Bundesfinanzhof (BFH), Germany’s Federal Fiscal Court, illustrates the distinction made for the purposes of inheritance tax between a family home and the claim to transfer ownership in a family home (Az.: II R 14/16).

A family home can be inherited tax free, irrespective of its value, if the inheriting spouse or partner continues to occupy the home for an additional ten years. Children can also benefit from this exemption from inheritance, albeit with restrictions. However, there lurks a trap in German tax law if it is merely the right to transfer ownership in a family home and not the family home itself that is handed down. We at the commercial law firm GRP Rainer Rechtsanwälte note that under these circumstances the case law of the BFH confers no right to exemption from inheritance tax.

In a judgment from November 29, 2017, the Bundesfinanzhof ruled that a claim backed by a priority notice of conveyance to transfer ownership in a family home acquired by the surviving spouse by virtue of the deceased’s passing is not exempt from inheritance tax. It held that tax exemption requires that the deceased spouse have been owner or co-owner of the family home and that the heir acquires these ownership rights due to the former’s death.

This did not happen in the instant case. The testatrix had acquired a condominium and four underground parking spaces for about 4.5 million euros in 2007. A priority notice of conveyance was registered in the land register in her favor. In December of 2008, the married couple moved into the property. The testatrix had set out in a will that the condominium was to go to her husband alone and that the remaining assets were to be distributed according to the rules of intestate succession. At the time of her death, the testatrix had not yet been registered in the land register as the owner of the property.

After the death of his wife, the husband had himself registered in the land register as the owner in February of 2010 and continued without interruption to use the property as a private residence. In his inheritance tax declaration, he applied for an exemption from inheritance tax for the acquisition of the house. The tax office rejected the application and the man’s legal action was also unsuccessful. The BFH stressed that a claim backed by a priority notice of conveyance to transfer ownership in a family home acquired by reason of death is not exempt from inheritance tax.

Lawyers who are experienced in the field of tax law can advise on matters pertaining to inheritance tax.

For more informations:

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

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ErbschaftssteuerPressemitteilungen
news-3441 Wed, 30 Jan 2019 09:07:47 +0100 Purchasing cooperatives and antitrust law https://www.grprainer.com/en/news-and-press/detail/news/purchasing-cooperatives-and-antitrust-law.html Purchasing cooperatives provide value to many retailers and traders. However, with these kinds of associations it is necessary to ensure that they do not violate antitrust or competition law.

Purchasing cooperatives can be particularly beneficial for small and medium-sized merchants looking to strengthen their position in the market. While purchasing cooperatives of this kind are allowed under EU law, their market share cannot be too large. We at the commercial law firm GRP Rainer Rechtsanwälte note that a market share of around 15 percent serves as a benchmark here.

It is in view of this that the Bundeskartellamt, Germany’s Federal Cartel Office, has initiated administrative proceedings against a purchasing cooperative for furniture. The cooperative already counts several commercial enterprises as its members, with another group wishing to join in the coming year. The Bundeskartellamt is now assessing whether there are concerns pertaining to competition law that preclude the group being admitted.

Antitrust law does not, as a general rule, preclude purchasing cooperatives of this kind, as these associations enable small and medium-sized businesses to maintain and strengthen their position in the market and, of course, also provide consumers with goods on more favorable terms. But there are limits: these kinds of cooperatives can put pressure on manufacturers. If their influence on the market becomes too great, this can have negative consequences. Manufacturers that cannot meet the negotiated terms could be pushed out of the market, reducing supply and ultimately subjecting consumers to rising prices.

That is why EU antitrust legislation provides that these kinds of purchasing cooperatives should not obtain a market share greater than approx. 15 percent. The Bundeskartellamt will now examine the purchasing cooperatives in the furniture sector from a number of different angles to determine whether there are concerns pertaining to antitrust law that preclude the association’s expansion.

Violations of antirust or competition law can be met with severe penalties, including formal written warnings, injunction suits and damages claims. Yet violations are by no means always obvious; even individual clauses within contracts can violate provisions of antitrust law. Lawyers who are experienced in the fields of antitrust and competition law can offer advice.

For more informations:

https://www.grprainer.com/en/legal-advice/antitrust-law.html

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KartellrechtPressemitteilungen
news-3439 Fri, 25 Jan 2019 08:26:00 +0100 Possibility of formal warnings in response to violations of the GDPR https://www.grprainer.com/en/news-and-press/detail/news/possibility-of-formal-warnings-in-response-to-violations-of-the-gdpr.html Whether a violation of the General Data Protection Regulation (GDPR) constitutes a violation of competition law and can therefore, as a matter of law, give rise to a formal written warning is still disputed.

Many were concerned that the General Data Protection Regulation, GDPR for short, entering into force would herald a veritable wave of written warnings in response to violations of the Regulation. These concerns have so far proven unfounded. We at the commercial law firm GRP Rainer Rechtsanwälte note that one probable reason for this is the sheer lack of consistency in the case law to date on whether a violation of the GDPR constitutes a violation of competition law and can thus lead to a formal written warning.

The courts have thus far delivered different rulings on the matter. The Landgericht Würzburg, the Regional Court of Würzburg, found in one case involving a violation of the GDPR that it represented a violation of Germany’s Unfair Competition Act, the Gesetz gegen den unlauteren Wettbewerb (UWG). It held that competitors could issue a formal written warning as a result of the violation of competition law or sue for an injunction or damages (Az.: 11 O 174/18 UWG).

The Landgericht Bochum, the Regional Court of Bochum, reached a different conclusion. It ruled in a judgment from August 7, 2018 that violations of the GDPR do not constitute violations of competition law and competitors are therefore not allowed to issue formal warnings in response to them (Az.: I-12 O 95/18). In the case in question, an online merchant had been issued with a formal warning as well as an injunction suit by a rival business for violating the GDPR. The LG Bochum dismissed the claim, ruling that the provisions in articles 77 to 84 of the Regulation dealing with claims brought by competitors are exhaustive. Accordingly, only certain institutions and organizations that are not intent on making a profit are entitled to safeguard the interests of those affected. The Court therefore concluded that the legislature wanted to avoid the possibility of competitors being issued with formal written warnings for violations of the GDPR.

The different interpretations in the case in the law suggest that the GDPR will continue to occupy the courts for some time yet. To avoid legal disputes, businesses and traders ought to assess whether they are complying with data protection requirements. Violations can potentially lead not only to formal warnings from competitors but also heavy fines imposed by supervisory authorities. Lawyers who are experienced in the field competition law can offer advice.

For more informations: https://www.grprainer.com/en/legal-advice/competition-law.html

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PressemitteilungenWettbewerbsrecht
news-3437 Wed, 23 Jan 2019 08:14:00 +0100 BGH – Champagne must define the taste of a champagne sorbet https://www.grprainer.com/en/news-and-press/detail/news/bgh-champagne-must-define-the-taste-of-a-champagne-sorbet.html A champagne sorbet needs to actually taste like champagne; otherwise, this description cannot be used. That was the verdict of the Bundesgerichtshof (BGH), Germany’s Federal Supreme Court, in a ruling from July 19, 2018 (Az.: I ZR 268/14).

Not unlike in the case of brands, it is also possible to protect designations of origin on the grounds that consumers may associate geographical indications of origin with a certain quality. We at the commercial law firm GRP Rainer Rechtsanwälte note that a protected designation of origin is considered to have been unlawfully exploited if its reputation is exploited.

The legal dispute between a discount supermarket selling ice cream featuring the description “Champagner Sorbet” (German for “champagne sorbet”) and an association of wine growers from the Champagne region has occupied the courts for years. The wine growers viewed the description as a violation of the designation of origin “Champagne”.

The Bundesgerichtshof referred the case to the European Court of Justice (ECJ). The ECJ held that the reputation of a protected designation of origin is considered to have been unlawfully exploited if the intent behind using the designation is to profit from its reputation without permission. The Court noted that this could be the case with “Champagner Sorbet”, since consumers associate this with a certain level of quality and price category. The ECJ went on to state, however, that if the product’s taste comes primarily from the champagne used in its making then there are no grounds for objecting to the use of the description “Champagner Sorbet”.

The BGH has since ruled that the designation of origin “Champagne” is deemed to have been unfairly exploited if in spite of the product containing champagne this does not define its taste. Furthermore, the champagne in the product can be said not to define its taste if despite tasting like a wine-based product the taste comes primarily from other ingredients and not the champagne.

The Court also held that if the taste of a food product referred to as “Champagner Sorbet” cannot be attributed to champagne as an ingredient, this is deemed to be misleading to consumers. The use of the term “Champagner” was said to be a strong indication to consumers that the product tastes like champagne and that the latter’s use as an ingredient is what defines the taste. The Oberlandesgericht München, the Higher Regional Court of Munich, must now determine what property defines the relevant product’s taste.

Violations of trademark or copyright law can be met with severe penalties. Lawyers who are experienced in the field of IP law can advise businesses on enforcing or fending off claims.

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

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MarkenrechtPressemitteilungen
news-3435 Fri, 18 Jan 2019 08:58:00 +0100 German Finance Ministry confirms simplification of input tax deduction from invoices https://www.grprainer.com/en/news-and-press/detail/news/german-finance-ministry-confirms-simplification-of-input-tax-deduction-from-invoices.html Following the decision of the Bundesfinanzhof (BFH) to simplify the deduction of input VAT from invoices, the Federal Ministry of Finance (BMF) confirmed in a circular dated 7 Dec 2018 that it will be applying this case law.

In judgments from 21 June 2018, the BFH ruled that it is enough for an invoice to include the invoicing party’s postal address and not necessary to specify the premises where it carries out its commercial activities over and above this (Az.: V R 25/15, V R 28/16). We at GRP Rainer Rechtsanwälte note that in doing so the BFH has simplified the deduction of input VAT for businesses.

Accordingly, to be entitled to deduct input VAT from an invoice, it is enough for the invoice to include an address at which the invoicing party can be contacted. The BMF subsequently released a circular on 7 Dec 2018 amending the UStAE, a directive on the application of VAT (III C 2 – S 7280-a/07/10005 :003). It now states that any address is sufficient so long as the business providing the service or the beneficiary can be contacted there. Whether the business carries out its commercial activities at the address specified on the invoice is irrelevant. PO box, wholesale customer and c/o addresses all satisfy the requirements.

Lawyers who are versed in the field of tax law can advise on tax disputes with the tax authorities.

For more informations: https://www.grprainer.com/en/legal-advice/tax-law/tax-dispute.html

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PressemitteilungenSteuerrecht