Certain communications of a confidential nature in which the communicant has a rightful interest are exempted from the general prohibition by the second paragraph of section 14. The term "rightful interest," which was borrowed from section 193 of the Penal Code, excludes all interests contrary to right or to morality or which in no way affect the communicant himself. According to Oppenheimer this exception was made in behalf of inquiry agencies, which collect and disseminate information regarding the standing of concerns and which are regarded in Germany as performing a legitimate and useful service.1

Section 824 of the Civil Code is also applicable to statements which injure another's credit, but since the enactment of the law of 1909 it has apparently had practically no application to such statements when made for the purpose of competition in business.

Section 15 differs from section 14 in the following particulars: (1) The person circulating the injurious statements must know that they are untrue; (2) the statements must be untrue and not merely incapable of proof; (3) only injury to the business and not to the credit of the proprietor is specified, since the latter is covered by section 187 of the Penal Code; (4) there is no provision for rightful interest such as is contained in the second paragraph of section 14; and (5) it is not necessary that the act be for the purpose of competition. By omitting this requirement section 15 is not confined entirely to the field of unfair competition.

3

Under section 14 the defendant must prove that his statements are true, whereas under section 15 the plaintiff must prove that they are

untrue.

Examples of assertions prohibited by section 14, if incapable of proof, are (1) that a competitor's patent has expired; (2) that a competitor's beer has no taste; (3) that a competitor has been ordered to efface his trade-mark. The assertion that the goods of a competitor are too dear or that they are poor is not a fact as above defined, but an expression of opinion and therefore not prohibited.*

1 Oppenheimer, op. cit., pp. 1484-1485.

2 SEC. 824. Whoever asserts or circulates a statement contrary to the truth which is adapted to injure the credit of another or to bring about other disadvantages for his earnings or prosperity must compensate the other for the injury caused, even if he does not know at all the untruth but should know it.

The communicant will not be liable for compensation of damage for a communication whose untruth is unknown to him if he or the recipient of the communication has a lawful interest therein.

3 SEC. 187. Whoever against his better knowledge asserts or circulates an untrue statement in reference to another which is adapted to bring such person into contempt or to degrade him in public opinion or endanger his credit is punished for defamatory insult with imprisonment up to two years, and if the defamation is committed publicly or by circulating writings, pictures, or representations, with imprisonment for not less than one month.

If extenuating circumstances exist, the punishment may be abated to one day's imprisonment or a fine up to 900 marks may be imposed.

4 Fuld, op. cit., p. 333; Finger, op. cit., pp. 207, 209, 222.

The assertion "you are being overcharged by your supplier," in a circular addressed to customers and intended to recommend one's own goods, has been held to be a statement of fact which is of a nature to injure a competing business within the meaning of this section. In the case in which this view was expressed, as in other cases the court stated that it is not material to consider in what sense a statement of fact is made, but only in what sense it is accepted by the business circles to which it is addressed.1

Examples of assertions that have been judged in violation of section 15 are (1) that two concerns were identical, when it was known that they were not; (2) that a firm had been dissolved, when the communicant had simply withdrawn from the firm.2

An interpretation of section 15 was made by the Imperial Court in 1910. The defendant told the customer of a competitor repeatedly, and with the knowledge that it was contrary to the truth, that the competitor would not come to the place in which the customer lived that year. Suit was brought by the competitor under section 15. The defendant entered the plea that the statement which he had made was not a disparaging statement and therefore was not a violation of this section. The court, however, held that the section was applicable to all statements, whether disparaging or otherwise, which were wilfully made or circulated and were calculated to injure another's business. Such statements, for example, as "a factory is burned," "a proprietor, on account of sickness, is not in a position to make deliveries," "a concern has discontinued the manufacture of certain goods or has ceased canvassing in a certain territory," contain nothing disparaging, but, nevertheless, are well adapted to injure the business and therefore, if untrue, fall under sections 14 or 15.3

Misappropriation of designations.-Section 16 of the law of 1909 is an enlargement of section 8 of the old law. It is directed against the unauthorized use of personal names, firm names, business designations, titles of works, etc. Such acts afford ground for an injunction and the recovery of damages.

4

Personal names are also protected against usurpation by section 12 * of the Civil Code and firm names by section 375 of the Commercial

1 Gewerblicher Rechtsschutz und Urheberrecht, 1911, S. 69.

2 Fuld, op. cit., p. 380.

3 Reichsgericht, Urt. v. 28. November 1910; cited by Seelow, op. cit., p. 111.

4 Section 12 of the Civil Code, which protects personal names, reads as follows: "If the right to the use of a name by a person entitled to it is disputed by another, or if the interest of the one so entitled is injured by reason of the fact that another uses the same name without authority, the person entitled may demand a discontinuance of the injury from the other. If further injuries are feared, he can bring an action to restrain." 5 Section 37 of the Commercial Code, relative to firm names, reads as follows: "Whoever uses a firm name not belonging to him according to the provisions of this chapter (third chapter-business firms) is to be required by the registry court to cease the use of the firm name under penalty of fines. The size of the penalty is fixed by section 14, second sentence.

"Whoever is injured in his rights by reason of the fact that another uses a firm name without authority may demand of the latter a discontinuance of the use of the firm name. An action to recover damages based on other provisions is not prejudiced.”

Code. These provisions, however, were considered inadequate when the first law against unfair competition was enacted in 1896. Trademarks are protected against infringement or imitation by the trademark law of 1894, referred to above (see p. 621), and are not included in section 16 of the law of 1909. Sections 14 and 16 of the trademark law also prohibit the unauthorized use of personal names and firm names, decorations, and designations of provenance, in so far as they are affixed to or relate to goods.

Section 16 of the law of 1909 relates not only to the usurpation of personal names and firm names, but also affords protection to all special designations of establishments, such as business nicknames or fancy names.

The language of section 16 is as follows:

SEC. 16. Whoever in business dealings uses a name of a person, a firm name, or the special designation of a business establishment, of an industrial undertaking, or of printed matter in a manner which is adapted to produce confusion with the name, firm name, or special designation which another properly uses, may be made subject by the latter to an action to desist from such use.

The user is bound to compensate the injured party for damages if he knew, or ought to know, that the improper kind of use was adapted to produce confusion.

Equivalent to the special designation of a business establishment are such business insignia and other distinctive fittings for distinguishing the establishment from other establishments which are used within the business circles affected as marks of distinction of a business establishment. For the protection of trademarks and the dress of goods (secs. 1 and 15 of the law for the protection of trade-marks of May 12, 1894, Imperial Gazette, p. 441) these provisions have no application.

The provisions of section 13, paragraph 3, have corresponding application.

The expression "name of a person" (Name), used in section 16, includes the names of natural persons, juristic persons, and assumed names, but excludes the names of places and things. If personal names or designations have become generic, they are also excluded. The expression "firm name" (Firma), as defined by the Commercial Code, section 17, is the name under which a merchant conducts his business and which he uses as his business signature.

The expression "particular designation" (besondere Bezeichnung) includes any kind of a special business designation, such as a fancy name or pictorial presentation which serves to mark or distinguish a business establishment or undertaking. It also includes the title of any printed matter, such as a book, newspaper, periodical, photograph, musical composition, etc.

The third paragraph adds to the designations specified in paragraph 1 business insignia and other fittings which are used to distinguish one establishment from another. The term "business insignia" (Geschäftsabzeichen) includes, among other things, the shape and decoration of a business wagon, the decoration of a show win

dow, the form of a business-name plate or sign, the form of emblems, etc. The term "fittings" (Einrichtungen) includes special forms of furniture, such as the tables of a restaurant, as well as the distinctive manner or form in which the letters, circulars, price lists, and other printed matter of a business establishment are gotten up.

Only those designations which have a distinctive character are protected. The same designation may possess this character in one case and lack it in another, so that each case must be decided according to the circumstances. Fuld states that German jurisprudence has not made as clear a distinction between designations that are distinctive and those that are not as has French jurisprudence.1

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The principal classes of designations excluded by German jurisprudence as not being distinctive are (1) generic names, such as patent bureau," "music school," "hotel," "café," etc.; also family names that have become generic, such as "Liebig," used in the designation "Liebig's beef extract"; (2) names of places, countries, rivers, mountains, etc., if not joined with another word; (3) figurative designations that have lost their distinctive character; (4) designations which are neither characteristic nor original.2

In determining whether the use of a firm name similar to that of some other firm is likely to cause confusion the courts consider, not whether confusion would exist where special care is exercised but whether confusion is likely to be created among buyers who use ordinary care. Due consideration is given to the fact that the average customer, and especially a new customer, frequently does not have in mind the designations of different concerns in the exact form in which they are entered in the trade register, but only such general impressions as are casually obtained. In a case involving this point the court held that if the general impression conveyed by the designations of two firms is the same the possibility of confusion exists and section 16 is regarded as applicable.3

Instances of designations which have been held to be of a nature to cause confusion are: *

Johann Maria Farina gegenüber dem Jülichplatz with Johann Maria Farina gegenüber dem Rudolfsplatz.

Gastwirtschaft zum Storch with Gastwirtschaft zum alten Storch. Michels u. Co. with August Michels u. Co.

Weinstube zu den drei Kronen with Weinstube zum goldenen Kronengebäck.

Schiller Theater with Friedrich-Wilhelm Schiller Theater.

1 Fuld, op. cit., pp. 414, 441.

Fuld, op. cit., pp. 416, 417.

3 Oberlandesgericht Frankfurt a/M, Urt. v. 11. Mai 1910; Gewerblicher Rechtsschutz und Wettbewerb, 1911, S. 69.

4 Fuld, op. cit., pp. 439, 440.

30035°-16-41

In one case a Dresden concern known as the American Steam Laundry W. von Biela brought suit under the corresponding section of the earlier law against another laundry known as Schreibers amerikanische Dampfwäscherei und Kunstplätterei, because the latter at one of its offices had placed a small sign beside its German firm name bearing the words "American steam laundry." The court sustained the plea of the defendant that the small sign was put up, not for the purpose of producing confusion, but only because many Englishmen and Americans resided in that part of the city.1

A book entitled "Best Jokes from the Munich Fliegende Blätter” was brought out by a Leipzig publisher in 1910. The jokes, mostly anonymous, were taken largely from contributions to this paper during the years 1843 to 1873. The Fliegende Blätter brought suit for infringement of its rights and obtained judgment against defendant in both the State Court of Leipzig and, on appeal, in the Superior Court of Dresden. The higher court held that the use of the name of this widely read, humorous weekly in the title of the book published by defendant would cause the reading public to believe that it was published by the owners of the weekly.2

Unauthorized disclosure of trade secrets.-Four sections of the law of 1909-sections 17 to 20, inclusive-relate to the practice of divulging trade secrets. Section 17 corresponds exactly with the first two paragraphs of section 9 of the earlier law, which made it a penal offense, punishable with fine and imprisonment, for an employee to disclose a business secret to another for the purpose of competition. Section 18 is a new provision which prohibits with like penalties the selling or communicating for the purpose of competition of drawings, models, patterns, and other plans of a technical character. It is especially applicable to the embroidery and lace industries. Section 19 provides for compensation to the injured party in case of the violation of sections 17 and 18, and section 20 makes it a penal offense for a person to induce another to violate sections 17 and 18 for the purpose of competition.

The language of these four sections is as follows:

SEC. 17. Whoever as employee, laborer, or apprentice, of a business establishment, for the purpose of competition or with the intention to do injury to the owner of the business establishment, imparts to others without authority commercial or manufacturing secrets, which are confided to him on account of his employment or otherwise have become accessible to him during the period of employment, is punished with imprisonment up to one year and with a fine up to 5,000 marks, or with one of these penalties.

Like penalties affect him who, without authority, for the purpose of competition, makes a profit from or imparts to another commercial or manufacturing secrets, the knowledge of which he acquired through one of the means of com

1 Urt. v. 5. Jan. 1900; Seufferts Archiv., N. F., 25, S. 296.

2 Oberlandesgericht Dresden, Urt. v. 3. Feb. 1911; Gewerblicher Rechtsschutz und Urheberrecht, 1911, S. 177.