Trade marks and designation rights serve as special property rights^[1] for the purpose of differentiation. In context, trade marks distinguish one product from other products. Company designations distinguish companies, while work titles distinguish works. Geographical designations of origin distinguish the geographical origin of a product from other regions of origin. Finally, names distinguish one person from others. However, in practice, these types of designations often overlap. For example, the same sign is often used to indicate a specific product and to indicate a specific company.
On the one hand, the sign 'Miele' distinguishes Miele washing machines from Privileg washing machines. On the other hand, 'Miele' as a company sign also refers to a specific company.
The courts repeatedly emphasise this distinguishing function inherent in all signs. In numerous decisions - here using the example of trade marks - it is stated: 'The essential function of a trade mark is to guarantee the identity of the origin of the marked product or service to the consumer or end user by enabling him to distinguish the product or service without any likelihood of confusion from products or services of different origin.'^[2]
Apparently, the business world as we know it would not be sustainable without signs. It is only through signs that the public is able to distinguish products and thus hold a particular company responsible for the quality of the labelled product.^[3]
Without labelling, consumers would hardly know whether a brownish liquid in standard bottles tastes like caffeinated lemonade or cold coffee before trying it. Such a product could hardly be sold. But if 'Coca-Cola' is labelled on specially shaped bottles with a consistent quality, the consumer is given a choice from a variety of brownish liquids for the first time.
In order for signs to be able to make this distinction, the legislator grants them special protection. This protection initially means that a particular company can monopolise a sign for itself in a very specific product area in the sense of an exclusive right.
For example, the owner of the Coca-Cola trade mark can take action against it being used by a third party for non-alcoholic beverages.^[4]
In addition to this protection of identity, however, the area of similarity is also protected - both with regard to similar signs and similar products. This is to counteract the risk of confusion between closely related designations or designations for similar products. The question of when such a likelihood of confusion exists in a specific case is often of central importance in practice and accounts for a large part of the designation rights.^[5]
For example, the owner of the Coca-Cola trade mark can certainly take action if it is used for alcoholic mixed drinks or a trade mark 'Coko-Cola' for lemonade. In this case, there is no question that the products and the signs are similar and that there is a likelihood of confusion. However, it becomes more difficult when the differences are greater, for example in the case of the trade mark 'Koko-Koko' or when it is used for a nutritional consultation.
In addition to this distinguishing function, which is protected by protection against identity theft and the likelihood of confusion and which ultimately serves to inform the public, designation rights also have a whole range of desirable side effects. In particular, designations enable targeted marketing and the use of advertising for a specific product or company. This means that a sign can be built up with a certain image and become well known to the public. However, a sign that is so well known or famous is exposed to new dangers - for example, from copycats or from being exposed to ridicule. To protect well-known trade marks, additional special provisions therefore apply which protect the sign even if the products labelled are no longer similar.
If, for example, the beverage trade mark 'Coca-Cola' is used by another company for clothing, a claim for a protective order can still be applied on the basis of the well-knownness of the Coca-Cola trade mark, even though beverages and clothing are certainly not similar and therefore there is no likelihood of confusion.^[6]
More recently, the idea has been developed of using the distinguishing function of signs in a completely different way. The fact that trade marks make it possible to distinguish between different products creates one of the basic conditions for economic competition.^[7] However, competition is a central instrument in the growing together of the European Union, in that products and companies from different member states can be put in competition with each other. In this way, the law of trade marks and designations has recently also fulfilled certain political objectives to a certain extent. In practice, the legal views that have proven to be particularly consistent over a long period of time are those that have been able to contribute to the harmonisation of Europe to the greatest possible extent, but at the same time in a way that does not overly affect national sensitivities.^[8] If we bear this in mind, it is even possible to make modest forecasts regarding the future development of trade mark and other designation rights. Only recently have we seen - possibly against the background of a rise in Euroscepticism - decisions that amount to a strengthening of national trade mark systems.