Key Aspects of German Business Law www.ebook3000.com Michael Wendler • Bernd Tremml Bernard Buecker Editors Key Aspects of German Business Law A Practical Manual Fourth Edition 123 Editors Michael Wendler Wendler Tremml Rechtsänwalte Mörsenbroicher Weg 200 40470 Düsseldorf Germany dus@law-wt.de Bernard Buecker 1220 Tower Life Building 310 S St Mary’s San Antanio, Texas 78205 USA mastholte@aol.com Dr jur Bernd Tremml, M.C.J Wendler Tremml Rechtsanwalte Martiusstraße 5/ II 80802 München Germany munich@law-wt.de The information contained herein is general information and is not intended to provide legal advide Should you require legal advice, you should seek the assistance of counsel Copyright © 2006 Michael Wendler, Bernd Tremml, Bernard Buecker ISBN: 978-3-540-68574-6 e-ISBN: 978-3-540-68577-7 Library of Congress Control Number: 2008929899 © 2008 Springer-Verlag Berlin Heidelberg This work is subject to copyright All rights are reserved, whether the whole or part of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilm or in any other way, and storage in data banks Duplication of this publication or parts thereof is permitted only under the provisions of the German Copyright Law of September 9, 1965, in its current version, and permissions for use must always be obtained from Springer-Verlag Violations are liable for prosecution under the German Copyright Law The use of general descriptive names, registered names, trademarks, etc in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use Cover design: WMXDesign GmbH, Heidelberg, Germany Printed on acid-free paper springer.com www.ebook3000.com Preface This book presents a clear and precise overview of the key aspects of German business law It was written by attorneys involved in the daily practice of business law in Germany and is aimed at people who wish to orient themselves quickly with the German legal system and the manner in which it impacts business purchases, establishment, operations and liquidations The first section of the book is devoted to an explanation of the major issues to be considered in acquiring or establishing a business in Germany The second section focuses on areas of commercial law that are important for an operating business In comparison to the last edition four new areas (transportation law, customs regulations, insurance law and state liability law) are treated The following sections deal with labor law as an independent part of German business law and with computer law Furthermore, procedural law and European law are addressed Finally, the last two sections of the book are devoted to an overview over the German tax law, which has an enormous impact on business decisions, and IP law In all sections special attention has been paid to highlighting and explaining the differences between the German legal system and that of the United States Nevertheless, the intention is to provide information that will prove valuable to all foreigners, particularly business men and women and lawyers advising clients with an interest in doing business in Germany Although it is the object of this book to provide readers with a general orientation and the foundation for making informed decisions concerning business transactions in Germany, it cannot possibly function as a substitute for case-specific professional advice and by no means purports to so Those readers who wish to follow up on any decisions they may have formed on the basis of the material presented here are well advised to seek the guidance of qualified attorneys and tax advisors before entering into any binding obligations This holds particularly true in light of the fact that all information here is based on the laws that were in effect in the Federal Republic of Germany on the first of January 2008 Düsseldorf, Germany Munich, Germany San Antonio, TX Michael Wendler Bernd Tremml Bernard Buecker v Contents Introduction B Tremml Part I How to Establish or Acquire a Business in Germany Recognized Forms of Business Organizations B Tremml and B Buecker Establishment of a Company or Branch Office T Fischl 33 The Acquisition of Closely Held Companies B Tremml 39 Valuation of Business Enterprises B Tremml 55 “Pseudo – Foreign Companies” in Germany – The Centros, Überseering and Inspire Art Decisions of the European Court of Justice K.F Sturmfels 59 Part II Commercial Law The Law of Contracts M Luber 67 General Terms of Business (AGB) A Stadler and M Luber 81 Torts T Tremml 95 vii www.ebook3000.com viii Contents Product Liability Under German and European Law 107 R Grote Real-Estate Property Law Germany 117 C.R Wolf The Law of Insolvency and Security Interests 127 R Nacke Unfair Competition 139 H Schroeder The Law of Public Procurement 147 N Müller Distribution Agreements 163 M Bihler Private Public Partnerships 177 K.F Sturmfels Copyright 185 C Gerlach Review of German Private Insurance Law 201 T Steffens Transport Law and Forwarder Law 217 J Walther Customs Law 239 B Kosny Liability of the State 263 M Luber Part III Labor Law Aspects of German Labor Law 277 W.D Schenk Residence and Work Permit 291 M Wendler Contents ix Part IV Computer Law Computer Law 307 M Karger Electronic Commerce 317 R.E Walch Protection of Internet Domain Names 323 W.C Leonti and H Schroeder Part V Procedural Law Enforcement of Rights and Claims through the Courts and Arbitration Tribunals 331 R Nacke Principles of the Legal Regulation of Attorney Fees 339 S Sandrock Notaries in Germany 351 C.R Wolf Part VI European Law Institutions of the European Community 365 B Tremml Antitrust Law in the European Community 377 B Tremml and M Luber Part VII Tax Law German Tax Law 389 I Badura Part VIII IP The PCT and the Enforcement of Patents in Europe 407 K Rupprecht Trademark Protection in Germany and Europe 465 E Popp www.ebook3000.com Glossary of German Terms and Abbreviations Abgabenordnung (AO) Abstraktionsprinzip Abtretung Allgemeine Geschäftsbedingungen (AGB) Amtsblatt der Europäischen Union Amtsgericht Änderungskündigung Änderungsvertrag Angestellte Aktiengesellschaft (AG) Aktiengesetz (AktG) Aktionär Aktie Arbeiter Arbeitserlaubnis Arbeitserlaubnisverordnung (AEVO) Arbeitsförderungsgesetz (AFG) Arbeitsgerichtsgesetz (ArbGG) Arbeitslosenversicherung Arrest Arzneimittelgesetz (ArzneimittelG) Aufenthaltserlaubnis Aufenthaltsgesetz Aufsichtsrat Ausländer Tax Code Abstraction Principle Assignment General Terms of Business Official Journal of the European Union Court of Small Claims; Municipal Court A Termination of a Contract with the Reserved Right to Renew it Under Altered Conditions Contract of Amendment Employees; Salary Earners; “White Collar” Workers Stock Corporation Corporation Act Stockholder (of a Stock Corporation) A Share of Stock; Stock Certificate Laborers; “Blue Collar” Workers Work Permit Work Permit Regulations Work Promotion Act Code of Labor Procedure Occupational Incapacity Insurance Freeze Order Pharmaceutical Products Act Temporary Residence Permit Federal Residence Act Supervisory Board of a Company or Corporation Foreigner; Alien xi xii Glossary of German Terms and Abbreviations Ausländergesetz (AuslG) Ausländeramt Außenministerium Außenwirtschaftsgesetz Begehungsgefahr Bergamt Berufsgenossenschaft Berufungsverfahren Beschäftigungsverordnung (BeschV) Betriebsaufgabe Betriebsrat Betriebsstätte Betriebsverfassungsgesetz (BetrVG) Bezirk BGB-Gesellschaft BGB-InfoV Bilanz Bilanzrichtliniengesetz Bundesagentur für Arbeit Bundesarbeitsgericht Bundesministerium für Arbeit und Soziale Sicherung Bundesfinanzhof Bundesgerichtshof (BGH) Bundeshaushaltsordnung Bundesimmissionsschutzgesetz (BImSchG) Bundeskartellamt Bundesrechtsanwaltsordnung (BRAO) Bundesrechtsanwaltsgebührenordnung (BRAGO) Bundespatentgericht Bürgerliches Gesetzbuch (BGB) Bürge Bürgschaft Bundesverfassungsgericht Aliens Act Aliens Office Department of Foreign Affairs Federal External Trade Act Danger of Commission of an Offense Mining Authorities Administrative Authorities in Charge of Providing Social Insurance due to Occupational Accidents Appellate Proceedings (to the Next Higher Court) Employment Regulation Order Abandonment of a Business Enterprise Works Council Operational Location (Dependant Branch Offiche) Employee Representation Law District See Gesellschaft Des Bürgerlichen Rechts Federal Ordinance on the Duty to Provide Information to the Consumer Commercial Balance Sheet Accounting Directives Act Federal Employment Office Federal Labor Court Federal Department of Labor and Social Order Federal Finance Court Federal Supreme Court Federal Budget Code Federal Emission Act Federal Cartel Authority German Bar Act Attorneys’ Fee Ordinance Federal Patent Court Civil Code Guarantor Surety or Personal Guarantee Federal Constitutional Court www.ebook3000.com Glossary of German Terms and Abbreviations Darlehen Delikt Deutsche Angestelltengewerkschaft Deutscher Beamtenbund Deutsche Bundesbank Deutscher Gewerkschaftsbund (DGB) Dienstvertrag dinglicher Vertrag dispositives Gesetzesrecht Duldung Durchführungsverordnung zum Ausländergesetz (DVAuslG) Einfuhrumsatzsteuer Einführungsgesetz zum BGB (EGBGB) Einigungsgebühr Einkommenssteuer Einkommenssteuergesetz einstweilige Verfügung Einzelunternehmen Entscheidungen des Bundesgerichtshofs in Zivilsachen (BGHZ) Entsendung Erbbaurecht Erbrecht Erbschaftssteuer Erfolgshonorar Erstbegehungsgefahr Europäische Gesellschaft Europäisches Patentamt Europäische Wirtschaftliche Interessenvereinigung (EWIV) Europäischer Gerichtshof (EuGH) Europäische Gesellschaft xiii loan Intended for Consumption (Normally a Monetary Loan) Tort (Compensatory), Unlawful Act White Collar Union Civil Servants’ Union Federal Reserve Bank of Germany German Association of Industrial Labor Unions Contract for Services (Without any Promise of Specific Result, as Opposed to a Werkvertrag) Real Contract Non-Mandatory Statutory Law Residence Toleration Implementation Ordinance of the Aliens Act Import Turnover Tax Introductory Act to the Civil Code Settlement Fee Personal Income Tax Income Tax Act (Preventive) Injunction Sole Proprietorship Decisions of the Federal Court for Civil Cases Posting Inheritable Building Right Inheritance Law Inheritance and Gift Tax Contingent Fee Danger of First-time Commission of an Offense Societas Europaee (SE), European Stock Corporation European Patent Office Business for Multinational Enterprises Comparable to the General Partnership European Court of Justice (ECJ) Societas Europae (SE), European Stock Corporation 508 E Popp The Community Trademark (CTM) system has been officially in effect since January 1, 1996, while the Trademark Office began full operation on April 1, 1996 The Trademark Office is located in Alicante, Spain, and is officially known as the Office for Harmonisation in the Internal Market (OHIM) On May 1, 2004 the following ten countries joined the European Union: Cypress, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovakia and Slovenia At that time, the EU consisted of 25 countries This major change has affected the CTM system as follows: www.ebook3000.com Trademark Protection in Germany and Europe 509 (a) All CTM registrations and applications filed before or claiming priority before May 1, 2004 have automatically been extended to the ten new Member States as from the date of accession (b) It will not be possible to cancel CTM rights that are automatically extended under section (a) above on the basis of grounds, either absolute or relative, that exist only in the new Member States (with one exception relating to descriptive and immoral meanings) (c) Any potential harm caused to local traders by the provision set out in sections (a) and (b) can be addressed by existing provisions in the CTM Regulation (d) It is not possible to the owners of automatically extended CTM rights to prevent the use of trademarks that existed in a accession State prior to the accession date (e) CTM applications with a filing or priority date of May 1, 2004 (the accession date) or later, have effect in all 25 countries and are treated in the usual way From then on, it is possible to raise absolute or relative grounds of objection that are applicable in any of the 25 member States Accepted CTM applications are also published in all of the EU’s official languages On January 1, 2007, a further enlargement of the European Union took place: Bulgaria and Romania joined in Since then, the EU consists of 27 countries This enlargement had the same effects on the CTM system as the previous one 4.1 Application Requirements An applicant shall be a national of a member State of the Paris Convention, but need not be a national of a Member State of the European Union Non-Europeans must be represented by a qualified professional A CTM application need not be based on an earlier national application, although filing will often be based on a priority claim The CTM can be filed in any of the languages of the EU Member States, while one alternative official language (English, German, French, Italian or Spanish) must be specified, for example for possible Opposition proceedings The filing in Alicante can also be made by electronic mail or facsimile In addition, applications may be filed at the national trademark office of any Member State of the European Union In Summary: Application Requirements (a) (b) (c) (d) (e) (f) (g) Applicants shall be a national of a member State of the Paris Concention Applicant does not need to be national of the European Union Non-Europeans must be represented by a qualified professional No need for earlier national basic application, often priority claim Application can be files in any of the 20 languages of the EU States Filing with OHIM in Alicante my be electronic or by facsimile Additional applications may be filed at the national Trademark office 510 4.2 E Popp Examination and Registration Upon registration, the OHIM will perform a search of prior CTM applications and registrations with respect to similarity with the filed mark The results of this search will not be used for refusal, but are sent to the applicant as well as to the owners of the relevant CTMs found in the search After publication of the application, the owners of these and other CTMs have the option of filing an Opposition The OHIM itself will not search national registrations, but the trademark offices of several of the member states will conduct a search for any earlier national marks which could lead to an objection and will communicate such marks to the OHIM in order for them to be included into the search report Only the Patent and Trademark Offices of France, Italy and Germany not provide a search report, because these countries have a different principle in opposition, i.e., the Patent Office does not examine relative bars to protection of its own volition An example of a CTM publication is given below: 210 000168807 220 01/04/1996 442 17/11/1997 546 531 1.15.11, 20.5.15, 25.5.2, 27.5.13 731 C+D Consult & Design GmbH Im Mittleren Sand 48A 65936 Frankfurt Germany 740 Meissner, Bolte & Partner Widenmayerstraße 48 80538 Munich Germany 270 DE 511 ES-25-clothing, in particular children's clothing, shoes EN www.ebook3000.com Trademark Protection in Germany and Europe 4.3 511 Opposition An opposition period of months runs from the publication date, within which the owner of any prior conflicting mark may oppose the CTM registration If refused in opposition proceedings, the application may be converted into separate national applications, for example in the countries where the prior conflicting rights not exist If at least one opposition has been filed, an extendable “cooling off period” of initially months commences in order to provide for time to negotiate a settlement of the opposition between the parties Repetitive: Opposition Opposition 4.4 a) Opposition period of three months from publication date b) CTM-Application may be converted into separate national applications c) Extendable „Cooling off period“ of initially two months Seniority To allow for a transition from national registrations to the CTM, a seniority claim is available A CTM application may claim seniority from a previous national registration in any Member State This will permit Applicant to make a CTM application covering all of the European Union Member States, while at the same time retaining his protection rights back to the filing date of his national registration Having obtained the seniority right in the CTM application, the national registrations can be abandoned without loss of rights 512 E Popp Repetitive: Seniority Seniority 4.5 a) Application may claim seniority from a previous national registration b) Having obtained seniority right, national registration can be abandoned Registration and Use The CTM has a duration of 10 years, after which renewal is possible without the necessity of filing proof of use Validity of the mark requires use in any part of the European Union The registration is subject to cancellation if it has not been used within the Union over a continuous period of years Repetitive: Registration and Use Registration and Use 4.6 a) Duration of 10 years, after which renewal is possible without filing proof of use b) Subject to cancellation if not used over a continuous period of five years Litigation Infringement and invalidity with respect to the CTM are dealt with by the respective national courts under national law A CTM may be revoked in view of conflict with prior rights, including a prior right anywhere in the European Union This may be the one disadvantage of the CTM system However, the CTM can be converted into national applications www.ebook3000.com Trademark Protection in Germany and Europe 513 The CTM registration provides a single unitary right throughout the EU Assignments or licenses with respect to the mark are registered at the OHIM Being unitary, the trademark cannot be separately assigned to different parties for separate countries However, it can be licensed to different parties for separate countries From these short remarks on the Community Trademark it can be recognized that such marks for Germany are just as important as national German trademarks Actions can be taken against the Community Trademark out of prior national German marks or, on the other hand, rights can be derived from Community Trademarks against newer national trademark applications In summary, the German trademark competes in Germany not only with German designation rights, but stands on the same footing with: ● ● International Registrations under the Madrid Agreement and/or Madrid Protocol which designate Germany, as well as Community Trademarks Repetitive: CTM-Litigation CTM-Litigation 4.7 a) Infringement and invalidity are dealt with by national courts and law b) CTM may be revoked in view of conflict with prior rights in the EU c) German Trademarks are equivalent to IR-Marks and CTMs The “Link”: Interaction Between the Madrid Protocol and the CTM System The “link” between these two systems provides for the possibility of designing the European Union as one single region as CTM in a Protocol application (“incoming PRI Mark”) or to base a Protocol application as “home applications (“outgoing PIR Mark”) 514 E Popp Regarding the question whether an applicant should seek protection in the European Union directly by filing a CTM application or through the protocol, the following is important to note There is a year vulnerability of a CTM as part of a protocol registration which provides for risk of that CTM being turned down together with the Protocol registrations following a successful “central attack” This may be an argument against this way However, even in such case, a conversion of a CTM into a national application remains available An “outgoing PIR Mark” is in any case solely available to EU nationals since the basic CTM application must act as home application For EU member states signatory to both the Madrid Agreement and the Madrid Protocol, an outgoing PIR Mark on the basis of a CTM application may also be disadvantageous because of significantly higher official fees payable for each Protocol designation 5.1 Summary What is a Trademark? A mark distinguishes goods and services from those of another enterprise Marks are the names, which “personalize” the product or service A mark ensures the quality of the goods (guarantee and trust), the recognition of a product (advertising and origin) and the better quality (quality function) The mark should also ensure the quality of the goods (guarantee and trust) as well as recognition of a certain product (advertising and origin) of the same or better quality (quality function) together with the technical advancement The recognition function of a mark by the consumer and the control function of the owner of the mark was again confirmed by the European Court of Justice in the “Ideal Standard” decision dated June 22, 1994 (published in GRUR Int 1994, 614 et seq.) The mark is therefore an instrument of consumer protection www.ebook3000.com Trademark Protection in Germany and Europe 5.2 515 According to Section German Trademark Act, Marks Can Be Registered in the Following Forms 516 E Popp 5.3 How Does a Mark Originate? 5.4 How Does Trademark Protection Originate? Registered trademark protection rights are obtained by application and registration at the competent authorities Normally these are patent offices or trademark offices in the various countries In Europe, the Community Trademark Office (OHIM) is also available for filing a Community Trademark (CTM) www.ebook3000.com Trademark Protection in Germany and Europe 517 In Germany, the German Patent Office in Munich with its branch office in Berlin is the competent office Upon entry in the Trademark Register, a sign becomes a registered trademark The sign may (but need not be) marked with the sign ® which equals registered mark For well known marks, the proprietor often does not use an ®, such as for Boss or Mercedes However, for less well known marks, also with additional elements it is recommended as follows: For weaker marks, the ® should be used such that the presence of trademark protection is visible For example the trademark Balance (registered by Goldwell AG, Darmstadt) appears almost descriptive especially when seen on the packaging or in advertising with the words “skin balance” or “maintains the natural balance”, etc 5.5 Why Seeking Trademark Protection? A registered mark provides industry with protection from mark pirates, infringers and inadvertant imitators Mark pirates are extremely detrimental to the economy Well known marks such as the Lacoste crocodile, Rolex, Pattex, Creme 21, Persil, etc are often popular mark pirates’ imitations Concerning such imitations, see below: 518 E Popp www.ebook3000.com Trademark Protection in Germany and Europe 519 520 E Popp Mark piracy appears in many forms While in some countries almost slavish imitation is rife, in western countries where the law is effective, imitations are more subtle Leading market products are copied in such a way as to make the consumer think that imitations are another mark of the known manufacturer as can be seen from the following comparison between originals and corresponding imitations: www.ebook3000.com Trademark Protection in Germany and Europe 521 The trademark protection law makes it possible for the owner to take legal action against imitators and pirates The laws and their implementation are different in every country, however, the registered trademark is the best means for defense Thus, trademark protection is very important As already mentioned, the trademark also protects the consumer because he can expect the same or even better quality of the known product, especially for pharmaceuticals, etc Marks should not be ridiculed or satirized in such a way as to damage or exploit the goodwill associated with them 522 5.6 E Popp What Other Dangers Face Registered Marks? Registered marks can lose their protection when they are used in a generic sense, e.g., the mark “Vasolene” for mineral fat was previously protected (still protected in the USA), the mark “Kleenex” for facial tissues or “TEMPO” for tissue-handkerchiefs The mark “Nylon” for synthetic fiber has also become a so-called “free sign” open to the public domain (generic designation), because the proprietor failed to prohibit third parties from use of the mark in describing similar goods Did you know for example that the word “WALKMAN” is a registered mark? Only the proprietor or licensee may use this sign on their products The goods of other manufacturers use words such as walk player, cassette recorder, etc Thus, it is actually detrimental to use a registered mark in the form of a verb, e.g., the mark “PRITT” in advertising as “PRITT ALONG TOO” PRITT is a trademark for a glue stick If used in the form of a verb, PRITT could one day replace the word “glue” Then trademark protection would be lost! For another example, the company Henkel owns the mark “MEGAPERLS” for detergents The detergents are presented in the form of small balls and look like little pearls The trademark owner would be ill advised to speak of the newly developed detergent as the “Megaperls” in the descriptive sense of “Mega Pearls” In this manner, good trademarks can become generic expressions and therefore become available to the public for use by the competitors www.ebook3000.com ... presents a clear and precise overview of the key aspects of German business law It was written by attorneys involved in the daily practice of business law in Germany and is aimed at people who wish... insurance law and state liability law) are treated The following sections deal with labor law as an independent part of German business law and with computer law Furthermore, procedural law and... the area of computer law Ralf Grote Attorney at law in Berlin, Germany – partner in the law firm of Wendler Tremml He is a litigation lawyer with longstanding experience One of his areas of expertise