The right to prohibit the distribution of products labelled with a trademark is derived from the function of the trademark to indicate the origin of the goods. After the distribution of those products with proprietor’s consent, the trademark rights are usually exhausted pursuant to § 24 para. 1 German Trademark Act (MarkenG). However, as an exemption to that the proprietor stays entitled to prohibit the distribution if the condition of the good is changed or deteriorated after being put into circulation (§ 24 para. 2 MarkenG).

In order to substantiate this rule, Courts stipulated in the past that an exhaustion of trademark rights does not apply if the use of the trademark is contrary to the obligation to act fairly in relation to the legitimate interests of the trademark proprietor and if it affects the value of the trademark by taking unfair advantage of its distinctive character or repute. (cf. European Court of Justice (CJEU), judgement of 23/2/1999 – C-63/97, para. 52 – BMW/Deenik,; Federal Court of Justice (BGH), judgement of 15/2/2007 – I ZR 63/04, para. 22 – Perfume Tester,). For limiting the exhaustion it is, therefore sufficient that the functionality of the product is negatively affected (cf. BGH, judgement of 9/6/2005 – I ZR 13/02 – SIM-Lock). Furthermore, if the removal of a control number from a package of the product causes a visible substantial detriment of the guarantee function then the proprietor may prohibit distribution as well (BGH, judgement of 5/10/ 2000 – I ZR 1/98 – Removal of Control Numbers  II). Such visible substantial detriment is even not required if statutory production numbers are removed (BGH judgement of 21/2/ 2002 – I ZR 140/99 – Removal of Production Number III).

Now, in a recent judgement the BGH considered the subsequent attachment of a guarantee sign, e.g. a certificate of authenticity, on a software medium labelled with a trademark and decided that the exhaustion of the proprietor’s rights ceases to be applied as well (6/10/2011 – I ZR 6/10 – Certificate of Authenticity).

The Court reasoned that a certificate of authenticity guarantees the production of the good under the control of the trademark proprietor. Thus, a subsequent attachment of such certificate without proprietor’s consent infringes the trademark’s guarantee function even if the certificate is not linked to a specific item comprising that trademark. Only the trademark proprietor is entitled to link its labelled products with a certificate of authenticity. And finally, the proprietor’s copyright on the software did not affect the absence of exhaustion of trademark rights as well.