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SKW Schwarz has advised Rondot International SAS on the acquisition of the LWN Lufttechnik group.

Rondot, headquartered in Champagne au Mont d’Or, France, designs and supplies high-performance solutions for the production of glass containers worldwide.

LWN Lufttechnik, based in Wilsdruff, Germany, and Wroclaw, Poland, is a leading specialist in cooling systems for glass factories around the globe.

A team from SKW Schwarz led by partner Dr. Kolja Petrovicki advised Rondot, together with French partner firm Carlara, Lyon, and Polish partner firm Drzewiecki Tomaszek, Warsaw, on all legal aspects of the transaction.

SKW advisors Rondot:

SKW Schwarz, Frankfurt: Dr. Kolja Petrovicki, LL.M. (lead), Dr. Max-Niklas Blome, LL.M., Dr. Tatjana Schroeder (all Corporate/M&A), Alexander Möller, Sabrina Hochbrückner (both Employment), Dr. Rembert Niebel, Jonas Laszlo Schüler (both IP), Dr. Oliver M. Bühr (Privacy; all Frankfurt), Nicole Wolf-Thomann, Dr. Gerd Seeliger, Franziska Sontheim, Nicola Halmburger (all Tax, Munich), Dr. Klaus Jankowski, Maria Rothämel (both Public, Berlin), Janina Schortz (Public, Berlin), Arndt Tetzlaff, Martin Himme (both Insurance, Berlin)

At this year’s IR Global Annual Conference, held from 13 to 16 September 2025 at the JW Marriott Hotel in Berlin, Margret Knitter, partner at SKW Schwarz, was presented with the prestigious “Gold Member Award.” The award ceremony honored her longstanding and outstanding commitment within the international network.

The Gold Member Status is a special recognition granted to only a few members worldwide. It is awarded for continuous commitment, active participation, and exceptional network engagement, and highlights the international recognition of Margret Knitter as a leading expert in intellectual property and media law.

Margret Knitter has been the Exclusive IR Global Advisor for IP - Trademark & Copyright in Germany since 2019 and is a member of the Steering Committee of the IR Global IP Group, which brings together leading IP professionals in more than 60 jurisdictions. The group is recognized as one of the world’s foremost networks for protecting and strategically leveraging intellectual property, built on expertise, innovation, and trusted international collaboration.

“I am truly honored to receive this award,” says Margret Knitter. “IR Global is an inspiring platform that fosters professional excellence and close cooperation across jurisdictions, enabling us to advise clients worldwide at the highest level.”
 

How far can providers of artificial intelligence go when it comes to using copyright-protected content?
This question is at the heart of a landmark legal dispute between GEMA, the German performance rights organization, and OpenAI, the operator of the well-known chatbot ChatGPT. On November 11, 2025, the Munich Regional Court I (Case No. 42 O 14139/24) ruled in favor of GEMA. In doing so, the court applied a new legal standard for evaluating the training and output of AI models. The decision is not only a (temporary) victory for rights holders but could also have a lasting impact on the development and use of AI systems in Germany and Europe.
 

The Case

At the center of the dispute were song lyrics from nine well-known German artists, including works by Kristina Bach, Herbert Grönemeyer, and Rolf Zuckowski. GEMA, acting as a collective management organization for authors’ rights, accused OpenAI of integrating these lyrics into its language models without authorization. According to GEMA, the models were trained on the basis of the protected content and could reproduce the lyrics almost verbatim upon user request.

OpenAI, however, argued that its models do not store specific data but instead learn patterns and probabilities from large datasets, generating outputs based on these patterns. OpenAI also relied on the copyright exception for text and data mining (TDM, § 44b of the German Copyright Act, UrhG), which permits the reproduction of copyright-protected works for analytical purposes.
 

The Decision: Infringement of Reproduction Rights

While international cases in the U.S. are often argued under the "fair use" doctrine, and UK courts frequently reject jurisdiction over "foreign training," the Munich Regional Court I explicitly focused on the technical finding of "memorization" and the reproducibility of copyright-protected works within the model. The court held that the decisive factor is whether a work (e.g., a song lyric) is "recognizably" and reproducibly stored in the AI system—regardless of how the reproduction is technically achieved or whether it is actually output.

The court found that such storage and the reproduction of the lyrics in the form of chatbot responses to user queries constitute unauthorized reproduction of the protected works, thereby infringing the rights holders’ exploitation rights.

The court also ruled that this "memorization" is not covered by the TDM exception, as it goes beyond the mere analysis of data for training purposes. The TDM exception only permits reproductions necessary for compiling a dataset for AI training (e.g., reproducing a work by converting it into another digital format or storing it in working memory). In this case, however, the works were reproduced through "memorization", which constitutes an infringement of the author’s exploitation rights. Given the complexity and length of the song lyrics, the court also ruled out the possibility that the reproduction occurred purely by chance. The court thus rejected an innovation-friendly, analogous, or extended application of the TDM exception.
 

Responsibility for AI-Generated Output

The court’s statements on the responsibility for AI-generated outputs are particularly noteworthy. OpenAI argued that users, not the company itself, should be held responsible for the creation of outputs (and thus for the reproduction of protected song lyrics), as these outputs were based solely on user inputs (prompts). However, the court disagreed, holding that OpenAI, as the developer and operator of the language models, is responsible for the storage of training data, which significantly influences the generated outputs. Responsibility, therefore, lies with OpenAI. 
 

Implications for the AI Industry

For companies like OpenAI, the ruling presents a significant challenge. It clarifies that AI providers cannot freely use copyright-protected content to train their models without authorization. The court’s focus on "memorization" and reproducibility—rather than just the input data or the output—marks a shift in how such cases are evaluated.

This decision has far-reaching implications for AI providers and rights holders. AI developers will need to scrutinize even more carefully whether and how data is used to train their models. Additionally, the increased liability risk for AI providers may lead to a reassessment of the broad liability disclaimers and contractual indemnity clauses commonly included in terms and conditions for end users.

In the European context, this ruling could establish a legal perspective that diverges from the "fair use" principle in the U.S.: those who train AI models with protected works on a long-term basis will likely need to acquire licenses in the future—a requirement that could set a precedent across Europe. At the same time, a restrictive interpretation of copyright provisions could hinder Germany’s and Europe’s competitiveness in the development and use of AI applications, potentially giving other countries or regions the opportunity to establish more flexible and favorable frameworks for transformative AI development and use.

The ruling is not yet legally binding, and it is expected that this decision will not be the final word in the legal dispute between GEMA and OpenAI. It remains to be seen how the higher courts will rule on the matter.

The ‘Climate-conscious travel’ project, initiated by the sustainability initiative Futouris e.V. and the German Travel Association (DRV), has been awarded the German Sustainability Award Products 2026. SKW Schwarz provided comprehensive legal support for the core of the project, the KlimaLink emissions data platform, in the implementation of the project goal.

The KlimaLink platform, which for the first time provides a standardised, ISO-compliant basis for calculating and presenting emissions data for flights, accommodation, buses and cars in the form of climate footprints, thus makes the climate impact of travel, a previously difficult-to-access area, transparent. In its statement, the expert jury of the German Sustainability Award Products emphasised: ‘The initiative shows that reliable and consistent data is key to involving both consumers and providers in more sustainable decision-making processes.’ Through a combination of standardisation, broad industry participation and integration into existing distribution systems, the project paves the way for a more climate-conscious travel market.

SKW Schwarz supported the project with a focus on the legally compliant communication of CO₂e data and the avoidance of potentially misleading or ambiguous environmental claims. This was based on a risk assessment report prepared by the law firm, which specified the requirements for transparency, scientific traceability and competition law.

‘Clear legal certainty is particularly important in the area of sustainable product labelling,’ says Dr. Daniel Kendziur, partner at SKW Schwarz. ‘In order for sustainability innovations such as KlimaLink's emissions data platform to build trust, they must be transparent and robust not only methodologically but also legally. The award impressively demonstrates how legal diligence and sustainability innovation can go hand in hand.’

The German Sustainability Award for Products honours products that make particularly effective contributions to sustainable transformation in one of five areas of transformation: climate, resources, nature, society and value chain.

Ongoing security tensions in Eastern Europe and increasing global geopolitical challenges have led to a fundamental change in European and German security and defense policy. This has enabled the arms and defense industry in Germany to reposition itself in recent years and highlight its strategic importance for national and European security.

This benefits not only the domestic arms industry, but also the European arms industry. In Germany alone, companies in the defense sector have recorded a 36 per cent increase in sales since 2021 to currently EUR 31 billion, and the trend is rising sharply. The resulting sales expectations make the acquisition of companies in this sector particularly interesting at present, as demonstrated not least by Rheinmetall's takeover of Naval Vessels Lürssen (NVL).

M&A transactions in the defense sector do not only serve economic goals. Rather, they are also a strategic lever for strengthening the industrial resilience of one's own country, securing access to critical technologies and addressing national security requirements. However, acquisition (M&A) processes in the defense sector differ significantly from transactions in other industries. 

This article will highlight some of these special features:

1.    The peculiarities of German regulation

First of all, the special regulation of the German arms market must be taken into account. As a result of the Second World War, the manufacture, transport and marketing of weapons of war are subject to special restrictions and licensing requirements under Article 26(2) sentence 1 of the German Basic Law (Grundgesetz – GG) and the War Weapons Control Act (Kriegswaffenkontrollgesetz – KrWaffKontrG). The ban on the stockpiling of weapons of war poses a particular challenge for investors in Germany. This is compounded by complex and lengthy approval procedures. Foreign investors are also subject to a reporting obligation to the Federal Ministry for Economic Affairs and Climate Protection (Bundesministerium für Wirtschaft und Klimaschutz – BMWK) in accordance with Sections 60 ff. of the Foreign Trade and Payments Ordinance (Außenwirtschaftsverornung – AWV). This includes any acquisition of 10 per cent or more of the voting rights in an armaments company. However, not only such share deals, but also the acquisition of certain assets of the company (asset deal) and foreign transactions involving a German subsidiary are subject to the reporting requirement. Furthermore, even direct and indirect investments from other EU countries and those in the defense supply sector are subject to reporting requirements. Acquisition agreements must therefore take into account the possibility of a national security review and the risk that the transaction may be prohibited or subject to strict conditions.

At the same time, the export of goods and technologies that are designed or could be suitable for military purposes (so-called dual-use items) is regulated by EU law (Dual-Use Regulation, Regulation (EU) 2021/821). Depending on the circumstances, European economic sanctions, the US International Traffic in Arms Regulations (ITAR) or US extraterritorial sanctions may also apply. 

All of these regulations must be taken into account in the due diligence process prior to the acquisition. Investors should be aware of the restrictions that these laws and programmes may impose on them both during the acquisition process and during the integration of the target company after closing.

2.    The issue of sensitive data and intellectual property

German companies in the defense sector mostly work with classified information or participate in confidential government contracts. This poses specific compliance risks for the defense sector, limits the scope of due diligence procedures and presents particular challenges for the integration of the acquired company.

Intellectual property is often a crucial asset in the defense sector and requires thorough examination. Company purchase agreements in this area therefore often contain extensive industry-specific provisions on the transfer or licensing of intellectual property rights, which are often aimed at ensuring the maintenance and support of armed forces equipment even after the end of the contract. When cooperating with public institutions or foreign partners, the issue of intellectual property can become even more complex, as demonstrated by the impending termination of cooperation between Germany and France on the Future Combat Air System (FCAS) project.

3.    Complexity of supply chains in the defense sector

The domestic defense industry is firmly integrated into European and, as the problem of rare earths shows, global supply chains. Defense companies often act as suppliers, integrators or prime contractors and usually interact with governments, customers, suppliers and partners at home and abroad.

This interconnectedness creates strategic opportunities, but also harbours considerable regulatory risks, as German companies often have to comply with foreign standards such as the US International Traffic in Arms Regulation (ITAR), and a change of control can trigger requirements for third-party approvals or regulatory notifications in multiple jurisdictions.

Therefore, due diligence in defense sector acquisition negotiations must include a careful review of liability allocation clauses, industrial and technological advantage obligations, and the status of ongoing projects – often the core of the target company's success. Obtaining the necessary third-party approvals should be integrated into the closing conditions. Finally, post-acquisition synergies must be assessed with regard to cross-border integration, which can be a powerful growth tool but also involves significant contractual and regulatory complexity.

4. M&A financing in a rapidly changing sector

For a long time, many public, institutional and private funds avoided the defense sector because, in addition to historical resentment, there was a perception in Germany that the defense sector was incompatible with ESG (environmental, social, governance) principles due to reputational risks associated with weapons, conflicts and corruption. This perception has now changed for the most part, as defense is increasingly seen as a strategic industry that is crucial to national stability and sovereignty. Lenders and investors are slowly responding to this by revising their exclusion criteria, distinguishing between defense-related and purely military activities, developing an industry-specific ESG framework, focusing on transparency, governance, anti-corruption compliance and human rights, and introducing tailor-made due diligence mechanisms. As a result, the defense sector continues to be viewed as sensitive, but is increasingly considered ‘investable’ for companies with strong corporate governance, strict regulatory compliance and proactive ESG risk management. This transition process must be incorporated into the closing process, including financing terms, representations and warranties, and investor expectations.

5.    Incorporating the impact of geopolitical tensions

Beyond national security reviews, international tensions – whether armed conflicts, trade disputes or tariff wars – can have a direct impact on transactions in the defense sector. Such developments can influence investment decisions, strategic alliances and regulatory approvals, while also disrupting supply chains, increasing costs and creating uncertainty. Arms purchase agreements should therefore always explicitly address the potential impact of such disruptions on the planned transaction and its execution.

6.    Integrating ESG, ethics and compliance considerations

The integration of ESG criteria is now crucial for attracting capital and minimising reputational risks. Historically, the defense sector in all countries has been particularly vulnerable to corruption because governments are regularly the end users and the procurement process often involves several intermediaries. This is one of the reasons why anti-corruption laws in Germany and other jurisdictions provide for severe criminal and civil penalties for companies and individuals who offer or accept bribes. These risks must therefore be carefully assessed during the due diligence process and taken into account in the M&A agreement – in particular through representations, warranties and indemnification provisions to ensure robust compliance and ethical safeguards.

7.    Consideration of defense sector-specific aspects in transaction documents and negotiations

Finally, the special characteristics of the defense sector influence not only the company valuation and due diligence review, but also the drafting of the transaction documents and the course of the contract negotiations. Acquisition agreements therefore typically include:

• The determination of regulatory approvals and compliance with applicable regulatory law, the granting of necessary licences or authorisations, and the consent of the contracting parties to transfers or changes of control;
• Extended representations and warranties covering regulatory compliance, the handling of sensitive data, intellectual property rights and freedom from corruption; and
• comprehensive indemnification provisions tailored specifically to risks identified during due diligence, which includes compliance with laws and regulations.

As with any M&A transaction, those in the defense sector must be carefully planned and executed. Industry-specific considerations must never be overlooked. In a context characterised by rising public investment, increasing geopolitical tensions and pressure to innovate and increase productivity, corporate transactions are and will remain a powerful driver of growth – provided that the specific characteristics of the industry are sufficiently taken into account.

Our lawyers specialising in acquisitions, sales, conversions and regulatory compliance, particularly in the tech sector, work closely together to guide clients through these challenges and support their strategic growth in this highly sensitive sector. Dr Thomas Hausbeck, LL.M., and the defense team at SKW Schwarz are happy to assist your company in effectively pursuing its sustainability goals.

The latest JUVE Handbook of Commercial Law Firms 2025/2026 has been published. We are particularly pleased that the firm as a whole has once again been ranked among the top 50 commercial law firms in Germany.

The SKW Schwarz media team is once again recommended as a ‘five-star practice’ in the ranking! All other teams maintained their positions.

As one of the top 50 law firms in Germany, SKW Schwarz is described as a ‘full-service law firm that is a sought-after advisor on digital and tech issues.’ ‘In IT and data protection as well as media law, it positions itself as an alternative to large law firms.’

We congratulate all 16 lawyers recommended in the handbook:

• Dr. Dorothee Altenburg: Trademark and Design Law / Competition Law, Media (Contract and Copyright Law)
• Dr. Markus Brock: Trademark and Design Law / Competition Law
• Markus von Fuchs: Trademark and Design Law / Competition Law
• Dr. Johann Heyde: Media (Contract and Copyright Law)
• Dr. Magnus Hirsch: Trademark and Design Law / Competition Law
• Dr. Thomas Hohendorf: Trademark and Design Law / Competition Law
• Margret Knitter: Trademark and Design Law / Competition Law
• Dr. Stephan Morsch: M&A
• Dr. Rembert Niebel: Trademark and Design Law / Competition Law
• Dr. Matthias Nordmann: IT Law (Data Law/Contracts and Licences)
• Dr. Matthias Orthwein: IT Law (Data Law/Contracts and Licences)
• Dr. Andreas Peschel-Mehner: Media (Contract and Copyright Law)
• Sandra Sophia Redeker: Trademark and Design Law / Competition Law
• Martin Schweinoch: IT Law (Data Law/Contracts and Licences)
• Dr. Sebastian Graf von Wallwitz: M&A
• Dr. Konstantin Wegner: Media (Contract and Copyright Law)

Special congratulations go to Dr. Dorothee Altenburg for her renewed nomination in the category ‘Leading Name in Trademark Law’, Dr. Andreas Peschel-Mehner for his nomination in the category ‘Leading Names in Copyright Law’ and Dr. Thomas Hohendorf in the category ‘Rising Star in Trademark and Competition Law’.

Every year, the editorial team of the JUVE Handbook of Commercial Law Firms researches developments in numerous areas of law and regions. As part of their research, they survey several thousand clients, solicitors, in-house counsel and judges. The awards are considered the most important in the German legal market.

The geopolitical shift in Europe is driving a profound transformation in innovation funding. Historically, defense-related topics were often met with disinterest or rejection by the tech industry and academic research institutions due to political and ethical concerns, such as the implementation of so called “civil clauses” that prohibited cooperation with military research. However, a new dynamic has emerged, leading to changes in the funding landscape. Dual-use technologies—those with both civilian and military applications—are increasingly becoming the focus of European and German funding policies. This shift is creating new financing and growth opportunities for companies in industries such as tech, robotics, AI, sensors, drones, and cybersecurity.

Below, we outline the most relevant programs currently in focus:

1. European Defence Fund (EDF)

The EDF is the EU’s central instrument for supporting collaborative research and development projects in the defense sector. With a budget exceeding €1.1 billion for 2025, the European Commission funds initiatives in fields such as AI, robotics, sensors, space, communications, simulation, autonomy, and protective technologies. A similar funding level is planned for 2026.

Research projects can receive up to 100% funding, while development projects may be co-funded up to 90%. The EU Defence Innovation Scheme (EUDIS), a component of the EDF, specifically supports SMEs and start-ups aiming to develop new technologies for the defense sector.

For companies with advanced technological expertise in areas like AI-driven data analysis, sensors, cyber defense, or autonomous systems, the EDF is currently Europe’s most significant funding program.

2. NATO DIANA – Defence Innovation Accelerator for the North Atlantic & NIF – NATO Innovation Fund

DIANA is NATO’s innovation program designed to support dual-use start-ups and technology-oriented SMEs. It offers accelerator programs (e.g., Palladion at the University of the Bundeswehr in Munich), test centers, mentoring, and seed funding for technologies with security-related applications (e.g., energy, materials, communications, and sensors).

DIANA serves as a bridge between start-ups, industry, research, and military applications. Selected companies gain access to state-of-the-art testing facilities and may also receive funding from the NIF, which is endowed with €1 billion.

3. European Investment Bank (EIB) & European Investment Fund (EIF)

In 2024, the EIB adjusted its internal funding regulations to better support dual-use projects. Key areas of funding include infrastructure, space, sensors, and communications projects that are civilian in use but also strategically relevant for security.

The EIF has introduced the Defence Equity Facility (DEF), a pioneering venture capital instrument aimed at facilitating investments in early-stage defense and dual-use companies. This program is particularly appealing to tech start-ups with capital needs and limited prior experience in securing funding. Investments are made indirectly through private equity and venture capital funds, which are supported by €175 million in total, targeting defense-related (including dual-use) technologies.

4. National Programs and Structures in Germany

Germany complements European funding instruments with its own initiatives:

•    Cyberagentur GmbH (Agency for Innovation in Cybersecurity): Supports disruptive research projects in areas such as cyber defense, AI, and quantum communication, with explicit consideration of dual-use potential.
•    Cyber Innovation Hub of the German Armed Forces (CIHBw): Facilitates the adaptation of civilian software or products from start-ups to meet the needs of the German Armed Forces. While no direct funding is provided, the hub fosters collaborations with the Bundeswehr.
•    Central Innovation Program for SMEs (ZIM): An open R&D funding program managed by the German Ministry for Economic Affairs and Climate Action (BMWK), applicable to dual-use projects.
•    Export Initiative for the Security and Defense Industry (BMWK): Assists companies in accessing international markets.
•    Research Contracts by the Federal Office of Bundeswehr Equipment, Information Technology, and In-Service Support (BAAINBw): Direct research and development contracts in the defense technology sector.

5. Legal and Regulatory Aspects

Funding defense or dual-use technologies is not only a matter of financing but also of regulatory compliance. Companies must particularly consider the following:

•    Export control and licensing requirements (e.g., BAFA, EU Dual-Use Regulation)
•    Security clearance and confidentiality requirements for military-related projects
•    Procurement-specific regulations for EDF or BAAINBw projects
•    Intellectual property and licensing considerations in EU co-funded projects

For successful grant applications, early legal consultation is recommended—both to assess funding eligibility and to ensure compliance.

Conclusion

The funding landscape for defense tech and dual-use innovation is undergoing significant change. While traditional EU programs remain primarily civilian-focused, standalone defense and security funds are emerging, targeting industrial high-tech solutions with strategic relevance to security and defense.

For tech-oriented companies in Germany, this shift presents attractive financing and growth opportunities—provided they can align civilian innovation with strategic value for security and defense.

SKW Schwarz advises companies on the legally compliant structuring, application, and execution of funding projects in the defense tech and dual-use sectors, from assessing funding eligibility to drafting contracts with European and non-European partners.
 

SKW Schwarz has once again been recognized as one of Germany’s leading law firms in the field of intellectual property in the prestigious IP Stars Ranking 2025. The internationally renowned ranking serves as a key benchmark in the IP legal sector and reaffirms the outstanding expertise of our firm in all areas of intellectual property law.

Firm Rankings 2025

In the category “Copyright & Related Rights”, SKW Schwarz has once again been ranked as a Top-Tier firm. The firm also maintained its Tier 2 ranking in “Trade Mark – Law Firms”, confirming its strong market position.

Trade Mark Stars 2025

Our partners Dr. Dorothee Altenburg, Dr. Markus Brock, Margret Knitter, Dr. Rembert Niebel, and Dr. Oliver Stöckel have been recognized as “Trade Mark Stars 2025”. Their recognition highlights the exceptional expertise and commitment of our IP team and its leading role in trademark law.

Rising Star 2025

Lara Guyot has once again been named a “Rising Star”. With her strong expertise and dedication, she continues to make a significant contribution to the success of SKW Schwarz’s IP practice.

Notable Practitioners

The title of “Notable Practitioner” was awarded to our experienced lawyers Dr. Magnus Hirsch, Dr. Daniel Kendziur, Dr. Andreas Peschel-Mehner, and Sandra Sophia Redeker.

The IP Stars Rankings and the accompanying Managing IP Awards are based on extensive research, including interviews, surveys, and feedback from thousands of law firms, IP professionals, and clients worldwide.

We are delighted about this renewed recognition, proud of the achievements of our IP team, and sincerely thank our clients for their continued trust and partnership.

The business magazine WirtschaftsWoche has once again recognized SKW Schwarz as a Top Law Firm in Inheritance Law in its 2025 ranking.

We are especially pleased that Stefan Skulesch has again been recommended as a Top Lawyer in Inheritance Law.

The survey was conducted by the Handelsblatt Research Institute (HRI). A total of 1,720 lawyers from 270 law firms named their most renowned colleagues. A jury of experts – including Birte Anderson (Legial), Jan Eckert (ZF), Frederick Iwans (Foris), and Achim Schunder (C.H. Beck) – made the final selection.

We are delighted to receive this recognition once again and thank our clients for their continued trust and confidence.

Sustainability is one of the defining issues in political and economic decision-making processes. Sustainability is also a high priority in the real estate industry. Real estate companies, project developers, and investors are increasingly taking these aspects into account and positioning themselves on the market through appropriate environmental communication, in short: through green claims.

The European Union's EmpCo Directive (“Directive on Empowering Consumers for the Green Transition”) introduces a new standard for the use and admissibility of environmental claims: consumers should be reliably protected against greenwashing. Companies must therefore meet strict documentation requirements before they can present themselves on the market with terms such as “environmentally friendly”, “climate neutral”, or “green.”

As a result, companies are required to fundamentally rethink their marketing practices and deal with processes for verification, certification, and legal review. Otherwise, they face consequences under unfair competition law.

This article highlights the legal issues currently arising in this regard, particularly for real estate companies in Germany and Europe, how these issues can be resolved, and how risks in environmental advertising can be effectively minimized.
The EmpCo Directive was already adopted by the European Parliament on January 17, 2024, and officially entered into force on March 26, 2024. However, the topic is now becoming relevant. This is because all EU member states must transpose the directive into national law within 24 months, i.e. by the end of March 2026 at the latest; for Germany, a reform of the Unfair Competition Act (UWG) is planned. The government draft for this has been available since the beginning of September 2025.

EmpCo aims to permanently prevent misleading environmental claims and greenwashing in consumer marketing communications. The directive stipulates that companies may only use environmental claims in advertising if they are accurate and specific.

A key element of this is the ban on unsubstantiated general environmental claims. Terms such as “environmentally friendly”, “sustainable”, “green”, or “bio-based” may only be used in advertising if they can be proven to have “recognized excellent environmental performance.” This approach is already covered in Germany by the requirements for ambiguous environmental claims (see our article on the Federal Court of Justice ruling on “climate neutral”.

Advertising with climate neutrality will be prohibited in the future if this is achieved exclusively or even partially through offsetting measures – a response to criticism that compensation payments for greenhouse gas emissions often have no real environmental benefit. Another new key regulation is that sustainability or environmental labels must be based on a certification system that meets certain requirements or has been introduced by government agencies; “green labelling” without an appropriate basis will be prohibited.

Statements about the future environmental performance of a company or product are also no longer possible without further ado. Whether a climate or environmental target can be communicated for 2030, for example, depends on whether there is a detailed and realistic implementation plan that includes measurable and time-bound targets, among other things, and which must be continuously reviewed by external experts.

EmpCo records both written and verbal statements and sets strict requirements for the clarity of information and the provision of evidence. Companies must ensure that all forms of communication - whether in brochures, on websites, in sales talks, or at events - strictly comply with the guideline and the certification standards based on it. Existing claims are not protected by transition periods and must be reviewed and, if necessary, certified in order to continue to be used in the future. If this is not successful, companies may have to abandon even long-established campaigns, claims, or even brands.

The key challenges posed by the EmpCo Directive and the new UWG for the real estate industry are therefore to formulate environmental statements precisely and accurately, to integrate the new requirements into existing processes and contracts, to provide evidence, and, where applicable, to obtain certifications. Anyone who wants to advertise as a builder, project developer, or operator using terms such as “environmentally friendly”, “climate neutral”, “sustainable”, or “green” must also ensure that the projects actually have recognized excellent environmental performance. The relevant documentation concerns, for example, energy consumption, greenhouse gas emissions, the use of sustainable materials, and much more.

These legal challenges raise very practical questions: How must environmental claims be legally reviewed and validated? Which internal documentation and compliance routines need to be adapted or newly introduced so that all claims can be fully verified? Existing contracts - e.g., with suppliers or service providers - may require additional agreements that clearly regulate the obligation to provide evidence and liability. New sustainability labels may only be used if they are based on compliant and transparent certification that is regularly reviewed and updated. Promises regarding future environmental performance must be accompanied by a detailed implementation plan with realistic (interim) targets.

Companies in the real estate industry should develop a comprehensive strategy for legally compliant environmental communication: claim, communication, validation, verification. The approach and best practices are based on checking all green claims in advance, providing validated evidence, and introducing processes for continuous adaptation to new requirements. It is generally advisable to set up a digital verification system that centrally documents all current certificates, life cycle assessments (LCA reports), and audit data, and makes them immediately available in case of queries or disputes.

Cooperation with recognized certification partners increases legal certainty and the trust factor vis-à-vis investors, tenants, and partners. Regular compliance training for all departments - especially sales, marketing, and legal - should be mandatory. Transparency is recommended for communication: instead of blanket terms, the focus should be on specifically measured results and certified services, supplemented by a digital reference structure (e.g., QR codes in brochures and on websites).

Contractual provisions regarding documentation requirements, liability, and rights of withdrawal should be included in all project, supplier, and service agreements. Monitoring claims and continuously updating data are key to regularly implementing new legal requirements and industry standards.

The EmpCo Directive sets a new standard for legally compliant and credible environmental communication in the real estate industry. Only those who carefully document their claims, implement independent certifications, and transparent information processes will remain competitive in the long term and operate in a legally compliant manner. Companies must proactively adapt their processes, contract content, and communication strategies and establish a compliance system that checks and documents green claims in advance across all media and sales channels. Future developments will bring further tightening and professionalization - both in legal review and in the technical implementation and digitization of certificates and environmental credentials.
 

Dr. Max-Niklas Blome, partner at SKW Schwarz, was appointed notary in Frankfurt on 24 September 2025. The firm's notary practice now has a total of five notaries in Frankfurt and Berlin.

Max-Niklas Blome joined SKW Schwarz in August 2025. With his arrival, SKW Schwarz is continuing to expand its corporate law and notarial practice. 

“The notary practice has become an important pillar of our range of advisory services,” says Dr. Stephan Morsch, Managing Partner of SKW Schwarz. “We are very pleased to be able to provide our clients with comprehensive notarial services through four notaries in Frankfurt and one notary in Berlin, particularly in the areas of succession, corporate law/M&A, and real estate.”

Data access, data transfer and new requirements for cloud switching

Today's buildings are data rooms. Sensors and IoT systems provide information about energy flows, climate, access controls, and space utilisation. This data is valuable for operators, tenants and service providers, but until now it has often been locked away in proprietary systems. Since 12 September 2025, the Data Act has been in force, a binding European legal framework that reorganises access to and use of data. 

The Data Act strengthens the position of users. Anyone who uses a networked product or connected service is entitled to the data generated in the process. This data may also be passed on to third parties by the user. 

Opportunities and risks for the real estate industry

Manufacturers and providers of connected products and services must design them in such a way that access to this usage data is actually possible. For the real estate industry, this means a noticeable shift in ‘data power’: operators and tenants can request data that was previously only available to the manufacturer or service provider.

This brings with it both opportunities and obligations. This data transparency enables new business models and more efficient operating processes. At the same time, companies must review their contracts, technical interfaces, and compliance processes. Data protection, trade secrets, and liability issues must be carefully addressed. Above all, however, it is of central importance that the use of data, for example by building management, is only permitted with the consent of the users. 

Access, disclosure, and protection of data

At the heart of the Data Act is the right of users to access data generated through the use of a connected product or service. For smart buildings, this includes sensor values, status reports and event logs that are available directly or via accompanying (connected) services. Enriched analyses or complex models are not covered by the provision obligation; instead, the focus is on the raw data collected directly.

Users can be not only the owners of the residential unit, but also its operators or even tenants. They can request the usage data generated from the data owner themselves or demand that it be passed on to third parties. Manufacturers and providers must verify the user's status and set up practical access options. The Data Act ideally provides for direct access to the product or service. If this is not technically feasible, indirect data access via suitable interfaces is mandatory. Clear information about data types, access options and any restrictions must also be provided prior to the conclusion of a contract. 

One innovation that is particularly relevant to the real estate industry is the possibility for users to designate a third party as a ‘data recipient’. If, for example, a tenant wishes to pass on their consumption data to an energy service provider, the data owner must ensure that the data is transferred to this data recipient, even if it is a competitor. The contractual terms between the data owner and the data recipient must be fair, reasonable, and non-discriminatory. At the same time, the Data Act protects trade secrets and security interests. In exceptional cases, the data owner may restrict the disclosure of data if there is a high risk to secrets or security, but only under strict conditions. 

Cloud switching and interoperability

Cloud switching is of great importance for digital offerings in the real estate industry. Many smart building platforms run in the cloud. The Data Act obliges providers to remove barriers to switching to alternative providers, disclose interfaces. and map exit rules both contractually and technically. Switching fees will be reduced and prohibited altogether in the future. The aim of the Data Act is to reduce dependence on proprietary systems.

Practical implementation and compliance

The first challenge lies in clarifying roles. Building owners, building managers or operators, platform providers, service providers, and tenants all play a role in a building. Who is the data owner and who is the user must be defined for each system and each usage constellation. It is advisable to systematically assign the relevant products and services, combined with a matrix that documents data categories, user groups, and responsibilities. Secondly, there is the question of protecting trade secrets. Much building data contains information that allows conclusions to be drawn about security architecture or maintenance strategies. The Data Act provides for protective mechanisms, including graduated measures for exceptional circumstances. The parties concerned should set out in a contract how secrets are to be protected and what procedures apply when users request data relating to sensitive areas.

A third point is the interaction with data protection law. Much of the data from smart buildings is personal, for example in access systems or workplace sensors. The Data Act does not create a separate legal basis here in the sense of the GDPR. This means that any data transfer must be based either on consent or another legal basis. Companies should therefore establish procedures to identify personal data and handle it in a legally compliant manner. 

Providers of SaaS and other cloud services in the real estate context are also obliged to provide options for switching and to promote interoperability. For real estate companies, this means that they must draft future platform contracts with clear exit clauses and migration paths. Particular challenges arise in this regard when drafting a ‘termination fee’ clause for the early termination of a long-term contract. The model clauses yet to be published by the Commission can serve as a guide.

Recommendations for action for real estate companies

If the provisions of the Data Act have not yet been fully implemented, companies in the real estate industry must take action now. The first step is to conduct a comprehensive data inventory. What data is collected in the buildings, who collects it, and who currently has access to it? On this basis, it is possible to check whether the provisions of the Data Act are being complied with.

Existing contracts with manufacturers, platform operators, service providers, and tenants must be reviewed for compatibility with the new obligations. Where necessary, adjustments must be made. 

At the same time, a technical review is required. Data access must not only exist in theory, but must also be usable in practice. Data owners must check whether interfaces are available and functional and whether the data can be provided in the required format.

It is equally important to establish clear compliance processes. User requests must be reviewed, documented and answered. This also includes procedures for reviewing trade secrets and data protection. Interdisciplinary teams from IT, legal and facility management can take on these tasks together.

The cloud strategy should also be reviewed from the perspective of ‘cloud switching’. Contract negotiations offer scope here to reduce costs and dependencies.

Open communication with owners, tenants, and service providers creates trust and prevents conflicts. Transparency about rights and obligations facilitates implementation and strengthens the company's position in the market.

Conclusion: Data as a strategic factor

The Data Act fundamentally changes how building data is handled. Since September 12, 2025, binding rules have been in place for accessing and using data in smart buildings. User rights are strengthened, while manufacturers and providers must adapt their systems and contracts.

For real estate companies, this means new opportunities and, at the same time, new obligations. Those who implement data inventory, contract review, and technical interfaces in a timely manner will secure competitive advantages and reduce legal risks. 

The coming months will show how the requirements prove themselves in practice. However, it is already clear that data is increasingly becoming a strategic factor in the real estate sector. Anyone who wants to operate smart buildings successfully needs not only modern technology, but also a robust data strategy in line with the Data Act and the GDPR.

The topics of ESG (environmental, social, governance) and corporate governance are increasingly becoming the focus of legal and economic discussion, especially since further regulations came into force at the beginning of 2025. This poses particular challenges – but also opportunities – for real estate companies, which are traditionally considered key players in urban development and resource consumption. In this article, we examine the legal implications and obligations arising from ESG and corporate governance for companies in the real estate sector.

I. What does ESG mean in the real estate industry?

The acronym ESG stands for Environmental, Social and Corporate Governance. These three dimensions form the foundation of sustainable corporate governance. Given that buildings account for around 40 per cent of global energy consumption and 36 per cent of CO2 emissions, and that real estate also creates social spaces, the real estate industry is particularly important not only from an environmental perspective, but also from a social perspective. This raises the following specific questions for real estate companies today:

• How can real estate be developed, built and operated in such a way that the ecological footprint is as small as possible? This primarily concerns the energy efficiency of buildings, the use of sustainable building materials and the reduction of CO₂ emissions (keyword: environmental).
• How can social aspects such as affordable housing, accessibility and fair working conditions be taken into account in projects? This particularly concerns the treatment of tenants, residents and other stakeholders (keyword: social).
• What mechanisms can a company use to ensure transparency, integrity and compliance with legal requirements? This includes aspects such as risk management, compliance and the avoidance of conflicts of interest (keyword: governance).

And real estate companies must do all this against the backdrop of 

• increasing energy efficiency and climate protection requirements for new and existing buildings;
• increased reporting obligations, especially for companies with large real estate portfolios; and
• financial incentives and penalties that reward sustainable buildings and make inefficient properties less attractive.

This It is no longer just a question of ‘green roofs’ or energy efficiency. ESG covers the entire life cycle of a property, from site selection and planning to construction, use of materials and energy consumption to tenant structure and portfolio governance, as well as renovation and utilisation – in other words, not just ‘from cradle to grave’, but rather ‘from cradle to cradle’. In this respect, ESG in the real estate sector means that companies and properties operate in a way that protects and strengthens the environment, people and structures in the long term, without focusing on short-term efficiency gains.

II.    Legal requirements for real estate companies

ESG is no longer a purely voluntary commitment. Numerous legal requirements and regulatory developments oblige companies to integrate ESG criteria into their business models. In addition, investors and banks are increasingly demanding ESG-compliant strategies, particularly due to the provisions of the EU Taxonomy Regulation, the EU CSRD Directive and the Supply Chain Due Diligence Act. However, the Energy Saving Ordinance and the Building Energy Act also require compliance.

1.    EU Taxonomy Regulation

The EU Taxonomy is widely regarded as a milestone in sustainability reporting because it defines which economic activities are considered environmentally sustainable. For real estate companies, this means that they must demonstrate that new construction projects or renovations, for example, comply with EU environmental targets, for example through energy efficiency measures.

2.    EU Corporate Sustainability Reporting Directive (CSRD) 

From 2025, this EU directive will extend the sustainability reporting obligation to real estate companies with more than 250 employees or an annual turnover of more than EUR 40.0 million. Specifically, the CSRD requires companies to comprehensively disclose the impact of their activities on the environment and biodiversity. In addition, property owners must demonstrate how energy-efficient their buildings are and what measures have been taken to reduce CO₂ emissions. As a result, greater biodiversity, sustainable building materials and a circular economy are required, for example.

3.    Supply Chain Due Diligence Act (Lieferkettensorgfaltspflichtengesetz – LkSG)

Although the German Supply Chain Act primarily focuses on human rights and environmental aspects in the supply chain, it is also relevant for real estate companies. Under the LkSG, they must ensure that building materials come from sustainable and fair sources and that their suppliers comply with human rights standards.

4.    Energy Saving Ordinance (Energieeinsparverordnung – EnEV) and Building Energy Act (Gebäudeenergiegesetz – GEG)

In the area of environmental protection, national regulations such as the EnEV and the GEG play a particularly important role. Real estate companies must therefore ensure that both new and existing buildings are energy efficient and comply with legal standards.

III. Corporate governance: a question of responsibility

Corporate governance forms the backbone of the ESG strategy demanded of entrepreneurs by politicians and society. Real estate companies are faced with the task of creating internal structures and processes that enable a sustainable orientation. From a legal perspective, this gives rise to the following key points in particular:

• Duties of management: Managing directors have a duty to incorporate sustainability aspects into their corporate decisions. This arises in particular from the general duties of care incumbent on management under Section 93 of the German Stock Corporation Act (Aktiengesetz – AktG) and Section 43 of the German Limited Liability Companies Act (Gesetz betreffend die GmbH – GmbHG).
• Risk management and compliance: Any effective risk management system in a company must take ESG risks into account, such as rising CO₂ prices or reputational risks due to social conflicts. Companies should also ensure that they comply with all relevant ESG requirements in order to minimise liability risks.
• Transparency and reporting requirements: The increasing requirements for the disclosure of ESG data necessitate clear processes and systems within a company. Reporting must therefore not only be accurate, but above all verifiable in order to meet regulatory requirements.

IV. Practical tips for real estate companies

The integration of ESG and corporate governance into a company is a complex and ongoing process. From a legal perspective, the following recommendations for action can be derived:

• Develop your own ESG strategy: Companies should develop a comprehensive ESG strategy that includes both long-term goals and short-term measures for companies.
• Ensure legal compliance: It is essential to keep an eye on existing and upcoming legal requirements and to take early action to ensure compliance.
• Adapt internal structures: ESG should not be seen as an additional task, but as an integral part of corporate management and culture. This includes regular employee training and the regular review and adaptation of internal corporate governance structures.
• Involve stakeholders: Real estate companies should actively communicate ESG issues with their stakeholders, such as tenants, investors and authorities, in order to build trust and acceptance.

V.    ESG reporting for property owners

Reporting involves the systematic collection, evaluation and disclosure of information on ESG data. Particularly in the case of larger portfolios or mixed-use properties, implementation requires precise data management, transparent processes and regular review of ESG targets. Owners face complex challenges in this regard – from selecting suitable indicators to preparing compliant reports in accordance with EU taxonomy or CSRD. Typical ESG metrics in real estate reporting are

Environmental

• Energy consumption (kWh/m² per year, broken down by electricity, heating, cooling)
• CO₂ emissions (kg CO₂/m² per year or absolute)
• Share of renewable energies in total consumption
• Water consumption (litres/m² per year)
• Waste generation and recycling rate
• Certification status (e.g. DGNB, LEED, BREEAM – weighted by property)
• Renovation rate within the portfolio (annual modernised area in %)

Social

• Proportion of barrier-free units
• Tenant turnover (ratio of terminated to rented space)
• Rent control / social housing ratio
• Customer satisfaction index (e.g. through surveys)
• Number of social projects or neighbourhood initiatives
• Working conditions at external service providers (e.g. cleaning services, security)

Governance

• Existence of an ESG concept / mission statement
• Proportion of ESG-related training courses for employees
• Anchoring of ESG criteria in management / supervision
• Regularity of ESG reporting (e.g. annually, quarterly)
• Use of ESG criteria in supplier selection
• Whistleblower system / compliance structures

VI. Conclusion

ESG and corporate governance have long since ceased to be purely moral or voluntary issues – they have long since become part of the legal and regulatory framework. For real estate companies, this poses a twofold challenge: (1) regularly reviewing and adapting their own business model to social and legal requirements, and (2) constantly monitoring and observing potential legal risks. Addressing these issues early and comprehensively is not only legally necessary, but also makes good business sense, as studies show that ESG-compliant companies are increasingly preferred – whether by investors, tenants or business partners.

The message can therefore only be: those who take ESG and corporate governance seriously are not only on the safe side legally, but also lay the foundation for long-term success in the real estate industry.

The real estate industry has long been considered conservative and strongly influenced by traditional brick-and-mortar structures. However, the emergence of PropTech has fundamentally changed this image. Digital solutions for increasing efficiency, reducing costs and creating new business models are bringing about lasting change in the industry. This opens up enormous innovation potential for real estate companies – but at the same time, the acquisition of PropTech companies brings with it its own unique challenges. Unlike the acquisition of traditional real estate or portfolios, the focus here is on intangible assets, intellectual property rights and technological assets.

This article highlights the legal peculiarities of PropTech acquisitions and shows how real estate companies can align their M&A strategies with the digital transformation. Dr Matthias Nordmann explains the key legal and structural issues, how technology investments increase company value and which regulatory framework conditions need to be taken into account. He also shows how IP rights and digital assets can be legally secured – a decisive factor for the success of M&A transactions in the PropTech sector.

Opportunities through digitalisation

The construction and real estate industry is undergoing change. Rising costs coupled with falling margins require a long-term and sustainable rethink. Conservative ‘bricks and mortar’ approaches, which still characterise large parts of the sector today, will soon offer little economic viability without a structured digital transformation. Far-reaching consolidation and automation will be virtually indispensable in terms of increasing efficiency and optimising costs. It is well known that diamonds are formed under pressure, and so the pressure on the industry also offers prospects for a growing number of PropTech start-ups as well as established PropTech companies. Smart building technologies and PropTech innovations are not only changing the way real estate is developed, managed and used, but also the strategic orientation of the companies themselves.

Market

As one of the growth markets par excellence, PropTech offers considerable incentives for the real estate industry. Forward-looking technologies can be found at all ends of the value chain, from property search, valuation, analysis and financing to digitisation in the areas of construction, development and property management. German PropTech champions such as McMakler, PlanRadar, Vermietet.de, Exporo, Homeday and, last but not least, Scout24 have long since established themselves as major players in the market. Small to medium-sized start-ups are proving to be particularly attractive options for M&A transactions, especially in terms of technology and personnel. In 2024, there were already 1,264 active PropTech start-ups in Germany, representing growth of 41 % compared to the previous year (source: blackprint PropTech Report 2024) – and the trend is rising!

Reasons for a transaction in the PropTech sector

M&A deals, especially acquisitions, offer established real estate giants opportunities to equip themselves technically for the future. Last but not least, the acquisition of late-stage start-ups opens up access to young, IT-, AI- and technology-savvy teams that can be integrated into existing corporate structures as part of so-called acquihires. The integration of AI and automation functionalities can quickly become a driver of efficiency and value creation. Traditional construction and real estate companies such as TPG Real Estate and Sprengnetter have already made their mark in terms of PropTech investments with the acquisitions of Aareon and 21st Real Estate, equipping their digital infrastructure and data expertise for the future. The resulting technological acceleration brings with it competitive advantages and access to new business models such as digital rental agreement processes and smart building services. Conversely, M&A is also an attractive exit strategy for late-stage start-ups when late financing rounds stall.

Legal peculiarities

However, PropTech M&A also confronts acquiring companies with a variety of challenges. Unlike traditional real estate deals, it is not bricks and mortar that determine value, but primarily intangible assets. 

• Such M&A deals are often characterised by typical venture capital structures on the part of the targets, where investor rights and liquidation preferences have a major influence on the terms of the transaction. Cap tables are often fragmented and complex, making thorough due diligence essential for coordinating founder, venture capital and business angel investments. Employee participation programmes such as ESOPs or VSOPs also play a key role, as they can significantly influence the distribution of the purchase price in exit scenarios. 
• Intellectual property rights (IP) are often the most important value carrier for PropTech start-ups: these include registered rights such as software patents, trademarks, utility models and design patents, related trademark rights such as domain rights and company trademarks, but also soft IP such as, in particular, copyright usage rights to software. Thorough IP due diligence of all strategically relevant areas of review is therefore a key success factor in PropTech deals. Central to this is the protection of IP, rights to databases, compliance with data protection and IT security requirements, the structure and risks of SaaS contracts, and regulatory and technical compliance for AI applications.
• A clearly documented chain of title, proof of source codes, and well-functioning term management for software patents or trademark rights are key factors in the valuation of the start-up and willingness to invest. Stable legal protection of the technology plays a central role. Unresolved legal issues can lead to costly rework or conflicts with contributors and competitors and ultimately become a deal breaker. Clear documentation is essential, especially in the area of open source compliance, as the software used may lead to the infection of derivative works under certain circumstances. The result is the threat of free disclosure of source codes, loss of rights of use, in particular commercial marketing opportunities, in the event of licence violations, injunctive relief and claims for damages, as well as reputational damage that is almost impossible to repair. It is therefore advisable, as part of IP due diligence, to request a complete list of all software components used and, if necessary, an automated scan for open source software.
• Inadequate patent compliance, risky contractual clauses in SaaS contracts, and low standards of IT security or AI governance can also quickly become deal breakers or, at the very least, lead to significant price reductions, renegotiations, or, in the worst case, the termination of the transaction. Furthermore, special regulations such as the GDPR and the recently enacted AI Regulation come into play in the context of due diligence in order to avoid exposing the acquiring company to significant sanction risks. Comprehensive documentation of historical and ongoing IP-related litigation regarding infringement, injunction and remuneration disputes, both on the asset and liability sides, is essential.
• At the same time, particularly in light of the value creation through IP, the seller's confidentiality interests, which are usually particularly pronounced in this context, must be taken into account and reconciled with the buyer's need for information. The protection of inventions, trade secrets and know-how is particularly important in this context. Appropriate confidentiality agreements and procedural, staged or limited due diligence processes are suitable for this purpose.

Conclusion and outlook

A successful PropTech acquisition requires a targeted adjustment of M&A strategies, as the focus here is on sustainable value enhancement. It is no longer sufficient to rely solely on traditional real estate M&A consulting. In-depth specialist legal knowledge, particularly in the areas of IP and IT, is crucial in order to identify and eliminate technological risks and regulatory pitfalls at an early stage. A special information request list for PropTech deals is extremely important as a starting point for the systematic evaluation of all legally relevant aspects. It is accompanied by special IP and IT guarantees (reps & warranties) in the purchase agreement documentation.

The Federal Constitutional Court has refused to hear a constitutional complaint filed by a Berlin gallery owner couple against the publication of the novel ‘Innerstädtischer Tod’ (Inner-City Death) by Luchterhand Verlag (Ref. 1 BvR 773/25). The publisher and author Christoph Peters are therefore free to continue distributing the work without restriction.

The judges in Karlsruhe stated that there were no obvious irreparable violations of fundamental rights in the novel. It was reasonable to expect the complainants to first conduct proceedings on the merits of the case. The Hamburg Regional Court and the Hanseatic Higher Regional Court had previously rejected applications for a ban on the book in preliminary injunction proceedings. 

"The Federal Constitutional Court has made it unmistakably clear that the threshold for interfering with artistic freedom is high. Authors of fictional works are permitted to make references to the present, address current events and process them literarily – all of this is protected by the constitution," explains Dr Konstantin Wegner, partner at SKW Schwarz, representing the Penguin Random House publishing group, which also includes Luchterhand Verlag. ‘The decision provides legal certainty for literary engagement with contemporary issues and thus sends a signal to authors and publishers as a whole,’ Wegner continues.

PropTech: Legally protected by Intellectual Property

The real estate industry is in the midst of a digital transformation that is becoming increasingly important under the buzzword ‘PropTech’ – property technology. PropTech encompasses technological innovations that affect the entire life cycle of a property: from planning, financing and marketing to operation and management. Start-ups and established companies are developing new digital business models, using artificial intelligence, blockchain or Internet of Things (IoT) technologies, thereby bringing about lasting change in the industry.

However, this development not only presents economic opportunities, but also raises complex legal issues. The focus is on the protection of intellectual property (IP), as innovations are the central capital of the new business models. Without effective protection, companies run the risk of having their developments copied, imitated or devalued by insufficient legal enforcement (so-called ‘dilution’). At the same time, digital technologies even harbour an increased potential for infringement, as they are often easier to replicate and reproduce. Young companies in particular are therefore faced with the dilemma of how much investment in IP protection makes sense for them, bearing in mind that only an effective IP portfolio can protect them from being squeezed out by large established players.

This article discusses the possibilities and relevance of acquiring IP rights in the context of PropTech. It shows why the topic is highly relevant to the real estate industry, what legal challenges exist and how entrepreneurs, investors and project developers can legally protect their innovative strength. The aim is to provide readers with practical solutions that enable them to maintain their competitiveness and minimise risks.

The Real Estate Industry: A Shift from Tangible to Intangible Assets and its Implications

The real estate industry has traditionally been strongly influenced by capital, land and buildings. However, with increasing digitalisation, intangible assets – data, software, algorithms, digital platforms – are becoming increasingly important and are becoming part of business models.

PropTech companies are developing innovative solutions such as automated valuation models, smart building technologies, digital marketplaces and applications for predictive maintenance. These innovations are highly dependent on intellectual property rights.

The fundamental aspects of this topic can be divided into three areas:

1. Protection of technical innovations through patents and trade secrets
2. Protection of digital platforms, software and data through copyright and database rights, and
3. Protection of reputation and investments in brand awareness through trademark registrations.

Each of these areas is highly relevant for real estate companies, developers and investors, as it directly influences the value of a business model. For example, a company that develops a smart and innovative building control system will hardly be able to maintain its market position against imitators without effective patent protection, as the technology can be quickly and easily copied.

The legal implications are manifold: on the one hand, companies must ensure that their innovations are adequately protected. On the other hand, there is a risk of unknowingly infringing on the rights of others. Finally, compliance aspects must also be taken into account, for example when using personal data in digital platforms. Companies must therefore not only protect their innovations, but also develop a systematic IP strategy that both secures their own rights and respects the rights of others.

The Interplay of IP in the PropTech Sector

The aim must be to ensure comprehensive and needs-based protection. This requires reconciling various aspects and challenges.

a) Complexity of Intellectual Property Rights:
A key challenge in the PropTech sector is the multitude of possible IP rights. While patents are relevant for technical inventions such as new sensor technology or IoT applications, software is generally protected by copyright. Platforms can also be protected by database rights. At the same time, trademark law plays an important role, as a strong brand facilitates market access and increases recognition. Once a product has established itself as ‘the original’ under a strong brand, it becomes all the more difficult for imitators to break into the resulting market position. The challenge for companies is to select the appropriate protection instruments and combine them systematically.

b) International Brand Presence:
As PropTech solutions are often digital and scalable, companies quickly seek international expansion. This has significant legal implications: IP rights are territorially bound and must be registered and enforced separately for each relevant country. Companies are therefore faced with the task of developing an international intellectual property strategy at an early stage. Solutions may include European patent applications, EU trademarks or international registrations.

c) Contractual Issues:
PropTech companies often work in complex contractual relationships with construction companies, project developers, investors or software entrepreneurs. Without clear contractual provisions, there is a risk that rights to developments or data will be distributed in an unclear manner. Precise IP clauses in contracts are essential here. At the same time, liability issues arise: who is responsible if a PropTech solution infringes the rights of third parties or causes errors during operation? Companies should therefore carefully structure the service relationships in their contracts and liability limitations.

d) Compliance, Data Protection and Data Ownership:
Data is playing an increasingly important role in the PropTech sector. Particular attention must therefore be paid to the use of personal data, for example in smart building or platform solutions. Data protection regulations, in particular the GDPR, apply here. Companies must ensure that their products are designed in compliance with data protection regulations. Technical and organisational measures to protect data are essential. Since the Data Act came into force, however, the issue of data ownership and data allocation has also become increasingly important. As a company, do I have access to the data I need? And even if this is the case, to whom do I have to disclose the data if necessary? 

Companies can meet these challenges by addressing the question early on of what valuable IP they are creating, where the particular risks for their own business model lie, and how they can protect themselves holistically. This includes the early identification of innovations worthy of protection, the development of an international IP portfolio, the integration of clear contractual provisions, and the establishment of a compliance system. In addition, so-called ‘freedom-to-operate’ analyses should be carried out during development and before market entry in order to avoid infringing third-party property rights. It is also important to check whether your own products comply with general compliance obligations, such as data protection minimisation obligations and the requirements for data privacy by design and default.

What Specific Steps should be Taken?

To minimise legal risks in the PropTech sector, companies should integrate best practices into their day-to-day business. Based on our experience, we recommend starting with the following measures:

a) Strategic IP Planning:
Companies should develop an IP strategy early on that is aligned with their business objectives. This includes identifying key innovations, selecting the appropriate intellectual property rights and defining priorities for international markets. It is advisable to review and adjust this strategy regularly, as technologies and markets are constantly evolving.

b) Contract Drafting:
IP issues should be explicitly regulated in all contracts with developers, partners and investors. This includes the clear allocation of rights of use, ensuring exclusivity, agreeing on confidentiality obligations and liability provisions. Standardised contract templates are often not helpful in this regard, as they usually do not meet individual needs and must therefore always be adapted to the specific case.

c) Compliance and Training:
In addition to formal intellectual property registration, establishing internal IP compliance is of great importance. Employees should be trained in the handling of intellectual property to avoid unintentional infringements. In addition, companies should implement procedures for monitoring markets in order to identify infringements of their rights at an early stage and take action against them.

Best practices show that companies that understand IP as an integral part of their corporate strategy and not just as a legal ‘add-on’ are more successful in the long term. A combination of legal protection, organisational measures and continuous adaptation to market changes is the key.

Conclusion and Outlook

The digitalisation of the real estate industry opens up enormous opportunities, but also brings with it new legal challenges. PropTech companies are faced with the task of effectively protecting their innovations so as not to become pawns of large, established market players. The protection of IP is not just a legal formality, but a key competitive factor. Companies that develop a clear IP strategy, draft contracts carefully and implement compliance structures will secure sustainable competitive advantages.

In the future, the pressure to innovate in the industry is expected to increase further. Issues such as artificial intelligence, blockchain-based transactions and smart city concepts will raise new questions about IP protection. Companies must be prepared to continuously expand their intellectual property strategies and adapt them to new legal frameworks. This is the only way to maintain a legally secure and successful position in the dynamic PropTech market in the long term.

Artificial intelligence (AI) has long since found its way into almost all industries and is significantly changing how companies design processes, make decisions and generate value. The real estate industry is also affected by this trend. From automated property valuation and data-driven forecasts of rent price trends to intelligent building control systems, AI has long since arrived in the real estate sector.

With the adoption of the EU AI Act, the world's first comprehensive regulation of artificial intelligence, a legal framework has now been established that is of considerable importance for companies in this industry.

This topic is particularly relevant because the real estate industry is highly data-driven and is increasingly integrating AI-supported systems into business models and projects. At the same time, the question arises as to what legal challenges this entails and how entrepreneurs, investors and project developers can position themselves in a legally compliant manner.

The AI Act takes a risk-based approach. Certain applications in real estate projects – such as biometric access systems or algorithmic risk assessments – will potentially fall into high-risk categories. This results in increased compliance requirements, liability risks and documentation obligations.

In the following, we highlight the legal implications of using AI, how companies can get to grips with AI compliance projects and what recommendations for action can be derived for practical application.

Why is AI a Legal Issue in the Real Estate Industry?

The EU AI Act aims to create uniform rules for the use of AI within the European Union. It is based on a risk-based approach that divides AI applications into four categories: prohibited systems, high-risk applications, AI systems with limited risk, and AI systems with minimal risks. For the real estate industry, this means that different obligations apply depending on the use case.

The first fundamental aspects are the identification of applications in the real estate sector that could fall under the legal regulation and the categorisation of AI systems within the meaning of the AI Act. Practical examples and the legal implications include:

• Automated property valuations: AI systems that calculate property prices or rental yields can lead to misevaluations and must be designed to be transparent.
• Smart building technologies: Intelligent building control systems based on usage data may fall within the scope of personal data.
• Tenant and credit checks: The use of algorithmic risk assessments in applicant screening will often have to be classified as a high-risk application and will require enhanced compliance measures.
• Security and access systems: Facial recognition or biometric access controls are generally considered high risk and are also subject to strict obligations.

These aspects are highly relevant for real estate companies, builders and investors, as they open up new opportunities – such as efficiency gains, improved forecasts and cost savings – but also entail new legal obligations. Violations of the AI Act can result in substantial fines based on the company's turnover.

The legal implications primarily concern the obligation to assess risks, transparency and documentation requirements, and responsibility for the quality of the data used. In future, real estate companies must ensure that AI systems do not have a discriminatory effect, that results remain traceable and that the systems used are continuously monitored. This means a considerable need for organisational and legal adaptation and the implementation of an effective compliance management system in the field of AI.

What Legal Considerations Apply when Using AI?

The entry into force of the EU AI Act presents a wide range of legal challenges for companies in the real estate industry. The following areas are particularly relevant:

a) Liability issues: The real estate industry operates in a liability-intensive environment. Incorrect forecasts or discriminatory systems can lead not only to financial losses but also to reputational damage. Who is responsible if an AI system makes an incorrect property valuation or an applicant is disadvantaged due to an algorithmic error? Clear provisions on warranties, liability limits and recourse options are recommended in all contracts with service providers. The AI Act also stipulates that companies using high-risk AI must comply with comprehensive testing and documentation requirements. Violations of these obligations are subject to significant penalties. Companies should therefore establish internal quality assurance processes and clearly assign responsibilities.

b) Compliance and data protection issues: Many AI applications in the real estate industry process personal data, for example in credit checks or when using smart building systems. Here, the requirements of the AI Act overlap with the General Data Protection Regulation (GDPR). Companies must ensure that AI systems are operated in compliance with data protection regulations. This includes, among other things, conducting data protection impact assessments, minimising data risks and ensuring transparency towards data subjects. When it comes to granting loans or managing (tenant) applicants, the regulations on profiling under the GDPR must be observed.

c) Organisational challenges: The AI Act requires that high-risk systems may only be used under strict conditions. These include setting up a risk management system, documenting how the system works, human oversight, and continuous monitoring. Companies must therefore create internal compliance structures that combine both legal and technical expertise.

Solutions: A multi-stage approach is recommended to overcome these challenges:

1. Inventory: Identification of all AI systems used in the company.
2. Risk classification: Classification according to the categories of the AI Act.
3. Contract adjustment: Revision of existing and future contracts with AI providers.
4. Compliance integration: Establishment of an internal control and monitoring system.
5. Training and awareness: Employees must be trained in the legal requirements.
6. External consulting: Collaboration with specialist lawyers and IT security experts.

In this way, real estate companies can ensure that they minimise legal risks while taking advantage of the benefits of new technologies.

How can I Ensure Compliance when Using AI in my Company?

In order to successfully implement the legal requirements of the EU AI Act in practice, real estate companies should adopt a strategic approach. The following recommendations and best practices are particularly relevant:

1. Develop an early compliance strategy: Companies should not wait until the AI Act is fully applicable, but should start creating internal structures now. This includes setting up a compliance management system that is specifically tailored to dealing with AI.
2. Build interdisciplinary teams: The legal requirements affect not only the legal department, but also IT, data analysis, sales and facility management. It is therefore advisable to set up an interdisciplinary team that combines legal, technical and business expertise.
3. Systematically review and adapt contracts: Since many AI systems come from external providers, purchasing and licence agreements must be drafted in a legally compliant manner. It is particularly important to clarify liability issues and ensure contractually that providers meet the requirements of the AI Act.
4. Ensure transparency and documentation: Companies should implement processes to document the functioning of AI systems in a comprehensible manner. This is not only a legal requirement, but also strengthens the trust of investors, tenants and business partners.
5. Consider data protection and ethics: In addition to the minimum legal requirements, companies should introduce voluntary standards in the area of ethics and data protection. This creates competitive advantages and signals a sense of responsibility towards stakeholders.
6. Monitoring and continuous improvement: AI systems are evolving dynamically. Companies should therefore schedule regular audits and reviews to ensure that the systems they use continue to meet requirements in the long term.

Best practices therefore consist not only of legal implementation, but also of proactive, strategic use of the technology. Companies that see the AI Act as an opportunity can strengthen their market position while minimising legal risks.

Conclusion and Outlook

The EU AI Act marks a milestone in the regulation of AI and has significant implications for the real estate industry. The key findings are that real estate companies will in future be obliged to subject their AI systems to a risk assessment, ensure transparency and documentation, and carefully consider liability and data protection issues. The biggest challenges lie in the practical implementation of these requirements, especially for high-risk applications such as credit checks or biometric access systems.

It is crucial for companies to develop a clear compliance strategy in good time and to establish internal structures that combine both legal and technical expertise. Those who act early can not only minimise legal risks, but also strengthen the trust of investors, tenants and business partners.

The outlook shows that AI regulation will continue to increase. Companies must prepare for rising requirements in terms of transparency, responsibility and ethical standards. Those who prepare in good time can use the AI Act not only as a regulatory obligation, but also as an opportunity to position themselves in the market.

Will the planned changes to the German Building Code (BauGB) lead to sustainable housing construction?

When it comes to the term sustainability, people rarely question what it actually means. A simple Google search can be helpful here, and lo and behold, sustainability does not only refer to environmental protection and securing resources for the future. Rather, there is also social sustainability, which aims to prevent poverty and create humane living conditions. Housing construction has been at a standstill for many years. In the Federal Republic of Germany, there is an estimated shortage of 550,000 homes. Those that are available have become unaffordable for the majority of people, especially in metropolitan areas. What can the state do about this, especially the federal government itself, with only limited legislative powers in public building law? In fact, there have been various initiatives at the federal level to remedy the housing shortage. On the one hand, a draft bill on building type E was drawn up, which was intended to make construction cheaper by eliminating many so-called recognized rules of technology. In addition, there is an initiative to clarify what legally prevents simple and inexpensive construction, and most recently, the planned amendment to the Building Code in July 2025 under the keyword “Bau-Turbos” (construction turbo). Let's take a look at whether the changes can actually bring about social sustainability.

So far, only a draft bill to amend the Building Code has been presented, which was approved by the Federal Cabinet on June 18, 2025 (Act to Accelerate Housing Construction and Secure Housing). The legislative process is expected to be completed in fall 2025. The planned amendment has four objectives, namely

• to accelerate housing construction,
• to facilitate noise protection regulations,
• to extend conversion protection, and
• to extend the provision on areas with a tight housing market.

The new Section 246e of the Building Code is intended to serve as a kind of experimental clause allowing deviations from development plans if the deviation is compatible with public interests, taking into account the interests of neighbors. To this end, there will be an Annex 2 that sharpens public interests, among other things by stipulating that the projects must not cause any additional significant environmental impacts. The regulation is limited until December 31, 2030, and only applies to residential construction, the expansion or alteration of existing residential buildings, and changes of use for residential purposes. However, the municipality must agree to this (Section 36a BauGB). The outer area can also be included, provided that it is spatially connected to areas in accordance with Sections 30 ff BauGB (Section 246e (4)). Furthermore, the requirements for integration in Section 34 (1) BauGB are relaxed, but this also requires the approval of the municipality. Finally, Section 9 (1) No. 23 BauGB is amended. In future, deviations from the TA-Lärm values may be permitted in justified cases. Finally, the possibility for municipalities to designate areas with a tight housing market by means of a statutory order is extended until December 31, 2030 (Section 250 (1)). This will continue to make conversions difficult. 

The regulations are limited by the federal government's limited legislative powers in public building law. They are also subject to municipal approval, which stems from the municipalities' constitutional right to perform self-governing tasks under Article 28(2) of the Constitution. Nevertheless, they can be expected to have a significant impact on the expansion of the housing market. The construction of rental housing has so far failed not only because of the issue of profitability, which was mainly caused by the sometimes absurd regulations in the state building codes on fire protection, parking spaces, accessibility, etc., but also because of a lack of building land. Industrial estates were always too close, the land was already located in the outer area, the project did not fit into the unplanned inner area, or stipulations in the development plan, particularly regarding floor area ratio, did not allow for expansion. The legislature is now attempting to mitigate the latter obstacles. This should also provide an incentive for state legislators to “declutter” state building regulations. 

Investors should first start looking for suitable sites that meet the requirements of the amendment.

Since municipalities must grant approval for housing projects that do not yet fit in, do not comply with the provisions of the development plan, or are located in the adjacent outer area, the difficulties for housing construction are likely to be shifted from the legislative to the executive branch. An unlawfully refused approval refers investors – as has been the case up to now – to lengthy legal proceedings with an uncertain outcome, which makes almost every project unattractive. Furthermore, there are still a large number of legal regulations that make housing construction difficult. Particularly in adjacent rural areas, questions arise regarding environmental compatibility (UVPG), the existence of an impermissible encroachment on the natural and landscape features, or general and specific species protection (BNatSchG). In unplanned inner areas, it is still possible to argue whether a project fits in with the character of the immediate surroundings within a connected built-up district or not. Whether and which neighboring interests may be affected also remains in the usual unpredictable realm.

The draft law can only be the beginning of the solution to the rapid construction of affordable housing. The reduction of essential building standards, which the federal government is also striving for, lies largely outside its area of competence, namely in the state building regulations. Apart from building type E, which is to be implemented primarily through civil law measures, the biggest obstacles lie in excessive building code requirements for buildings and thus in the legislative competence of the states. In addition to the requirements of the state building regulations and the Model Administrative Regulations for Technical Building Regulations (MVV TB), which usually elaborate on them, there are countless so-called “generally accepted rules of technology” that have so far been regarded by the civil courts as always applicable, without the contracting parties having expressly regulated this. The problem with this is not only that some of these rules are published without any scientific basis, but also that there is no evaluation of their usefulness by government agencies. No one knows exactly what is included in the generally accepted rules of technology. If you ask the relevant trade circles, they will usually refer to DIN standards, and in most cases also to VDE standards. Regardless of the sheer number of DIN and VDE standards alone, even simple manufacturer or processing guidelines can be considered generally accepted rules of technology. This is despite the fact that they are by no means written by manufacturers with the aim of providing an objective representation of what is necessary or sensible in terms of construction technology, but exclusively in their own interests.

Companies that have already identified areas that are suitable for residential construction in accordance with the amendments to the BauGB should first contact the municipality and the building permit authority to determine whether and to what extent they share the same views on this matter. These planning law issues can be clarified in preliminary proceedings.

Another way of securing the requirements under building law is to conclude an urban development contract between the investor (project developer) and the planning municipality for the preparation of a so-called project-related development plan. Such a contract is commonly referred to as an implementation contract and is a contract under public law.

In the broadest sense, it is a mutual contract. However, the consideration provided by the municipality does not consist in the enactment of a corresponding project-related development plan (Section 1 (3) sentence 2 BauGB), but only in the fulfillment of obligations to cooperate in order to obtain a project-related development plan (drafting resolution, early and formal participation, weighing process, etc.).

Prerequisites for such a contract:

• Sovereignty of the project developer over the required land (§ 12 (1) BauGB),
• Feasibility of the project developer (§ 12 (1) BauGB),
• Coverage of development costs (§ 12 (1) BauGB).

In the case of a project-related development plan, the investor usually initiates the urban land-use planning procedure.  He presents his project to the municipality and suggests that a project and development plan be drawn up, which will later become the subject of the project-related development plan.

Conclusion and outlook

The amendments and additions proposed in the draft bill are a first step toward quickly creating affordable housing. They pave the way for new building land. The new coalition's approach of “simplifying” construction and, as a result, ensuring the creation of affordable housing must aim to lower legal building standards in addition to technical building standards. The former could be achieved by the federal government through an amendment to civil law, for which it has concurrent legislative power under Article 74(1)(1) of the Constitution. If the big push is to succeed, the federal government would have to commit to determining the technical standards itself. The small solution to the big challenge could be to draft a nomenclature of technical rules and classify them into the areas of “safety-relevant” and “comfort features.” The big solution would mean that the federal government, for example, through its Federal Institute for Materials Research and Testing, would set genuine, validated technical standards. Reducing the legal standards in state building codes, on the other hand, can only succeed if the federal government also convinces the states to remove excessive standards from their state building codes. Companies in the real estate industry should therefore work with their associations to develop legislative proposals aimed at streamlining building code requirements for residential buildings.