The judgement of the Regional Appeal Court in Hamburg of 13th July 1999 – Reference No.: 3 U 58/98 – “Mitwohnzentrale”
The plaintiffs, an association of 40 German short-term letting agencies had registered a domain www.HomeCompany.de. The defendants, also an association of 25 other letting agencies, had registered with Deutsche Network Information Centre (DENIC) the domain name "Mitwohnzentrale.de". Mitwohnzentrale is a common expression that consumers associate with this type of service and the use of this term by an organisation that only consists of part of the sector could lead to a substantial risk of an unfair competitive distortion. The plaintiffs sought against the defendants an injunction to disallow their domain name. The Regional Court in Hamburg held for the plaintiff, and the Regional Appeal Court in Hamburg upheld the decision.
The court held that the use of the generic term "Mitwohnzentrale" as a domain name violates § 1 of the Unfair Competition Act, which states that any detracting from business activity of any competitor through measures of unfair competition caused by another competitor is a restraint of trade, and therefore unlawful. Thus, the plaintiffs are effectively excluded from business in the internet. The court reasoned that consumers, who often search information in the internet by guessing simple common words as domain names for services or goods are "caught" by the use of generic terms as domain names. A domain name like "Mitwohnzentrale" guides consumer to the corresponding registered domain address, and if satisfied with what they find on such a site consumers would not search for additional vendors even if they realise that the site does not provide a complete list of short-term letting agencies in Germany. The court held that the vendor with the generic term enjoys an advantage because the term simply channels consumers to only one site and keeps competitors from enjoying the fruit of their labour in violation of § 1 of the Unfair Competition Act. Furthermore, in order to prevent the use of common expressions as domain names, the court argued that a generic term can be neither a trademark nor a domain name under the German Trademark Act (see § 8 (2) of the Trademark Act).