UNDER ATTACK: TELEKOM HAS TO FIGHT FOR MAGENTA
US insurance start-up Lemonade has applied to the EUIPO for Deutsche Telekom’s „Magenta“ trademark to be deleted in its entirety. At the same time, it filed request for cancellation with the DPMA concerning the color mark insofar as it is registered for insurance services.
Aggressive trademark management on both sides
The US insurer has been operating in Magenta since it was founded in 2015. In mid-June, the startup of the Israeli founders Daniel Schreiber and Shai-Wininger then started its business operations in Germany – in the same color shade.
The reaction followed promptly. On July 23, 2019 the Hamburg Regional Court issued a temporary injunction on behalf of Deutsche Telekom. Lemonade was asked to remove the color Magenta from all its assets. Lemonade has bowed to the decision: in Germany, the start-up now advertises with a red tone instead of magenta.
Lemonde defends himself with the two actions for annulment and states that it is not acceptable „that Deutsche Telekom is entitled prohibiting other companies in Europe from using magenta beyond its own industry, especially since Deutsche Telekom does not even have an insurance license“.
For Deutsche Telekom, on the other hand, the issue is nothing less than the core of its brand presence; the entire corporate design is coordinated with it. Already in 2003, the German Federal Supreme Court (BGH) sentenced the competitor Mobilcom, and thus de facto all other companies in the telecom industry, to renounce from using Magenta because of a „high likelihood of confusion“. Mobilcom had previously advertised with large-format ads in this color.
In an interview with SPIEGEL (issued 4.11.2019), Lemonade boss Schreiber said: „These are bullying tactics. Deutsche Telekom did not invent magenta; every color printer has this color as a basic tone. It’s a natural resource that’s available to everyone.“ In addition, he complaint, no provider in the insurance business is as associated with magenta as Lemonade.
EUIPO: Nationwide market penetration doubtful
Even though this argumentation will hardly be successful before the offices, the two cancellation proceedings are by no means harmless for Telekom. For a long time, the offices rejected the trademark capability of abstract color marks on the grounds that they were purely decorative elements that were not understood as an indication of origin. The decision practice only changed with the Libertel decision, which made registration subject to a proven market penetration of more than 50%.
In the proceedings, Telekom was able to prove this for Germany, but certainly not for every EU member state. The argument that there is no proof that the color is understood by consumers as an indication of origin throughout Europe could therefore lead to success with the EUIPO.
DPMA: Assume lack of commercial use
In the German proceedings, the request for cancellation is limited to Class 36 (insurance). The Telekom trademark has long been out of the grace period and it seems unlikely that the telephone provider will be able to prove commercial use here. Thus, a partial deletion seems also possible as well. It is recalled that McDonalds recently had to accept a similar decision for their „BIG MAC“ mark. However, it remains doubtful whether a partial deletion alone would be sufficient to cancel Telekom’s injunctive relief. Telekom’s color trademark can probably claim to be a prominent trademark that also enjoys protection beyond the classes applied for.
Overall, the Deutsche Telekom trademark department has a few interesting weeks and months ahead of it.