Search results for

Host provider must delete semantically identical deep fakes – a legal milestone

SKW Schwarz has achieved a milestone in the fight against deep fakes on behalf of the renowned physician and TV moderator Dr. Eckart von Hirschhausen at the Higher Regional Court (OLG) in Frankfurt am Main. In an expedited proceeding, the OLG ruled that a provider who has been notified of an infringement, warned, or sued must proactively and actively address and delete other semantically identical infringements on its platform.

“Semantically identical,” the court stated in its now-published decision, refers to posts with identical text and image, but also those with different formatting (resolution, size/cropping, use of color filters, framing), including mere changes in typographic symbols or the addition of elements such as so-called captions that do not alter the overall meaning.

With the decision, the OLG Frankfurt continues its case law on the “Künast Meme,” while also taking into account the recently enacted Digital Services Act, and for the first time, formulates the so-called “active duty to monitor.”

“The active monitoring duties of the providers are now clearly, concretely, and predictably defined with this decision,” emphasizes Götz Schneider-Rothhaar, partner at SKW Schwarz, who represented Dr. Eckart von Hirschhausen together with counsel Fabian Bauer in the case. The OLG made it clear in its decision that the monitoring obligations imposed on the service provider are reasonable and that the provider is technically capable of implementing this monitoring. The court further noted that the service provider breaches its duty if it does not immediately, upon becoming aware of a concrete infringement, fulfill its obligation to identify all identical and essentially similar videos on its platform.

“This decision is a fantastic milestone and breakthrough, and it will most likely have far-reaching consequences for many celebrities and other rights holders across all creative industries,” says Götz Schneider-Rothhaar. “If a service provider is informed in the future about a deep fake or other potential infringements, they can be warned not only at cost for semantically identical content that they have not proactively deleted from their platform, but the affected parties can also directly sue, claim damages, and, if necessary, even seek compensation.”

According to Götz Schneider-Rothhaar, platforms will have to react. “Because there are significantly more opportunities to hold service providers accountable for infringements in a more concrete manner than before.”

The decision issued in the expedited proceedings is not subject to appeal.

Higher Regional Court of Frankfurt am Main, Decision of March 4, 2025, Case No. 16 W 10/25
(preceded by the Frankfurt am Main Regional Court decision of November 29, 2024, Case No. 2-03 O 393/24)

SKW Schwarz has been named Law Firm of the Year in Telecoms, Media & Entertainment at the Lexology European Awards 2025. The awards ceremony took place in London on March 13, 2025 and brought together over 200 legal professionals from across Europe to recognize excellence in the industry.

The selection is based on the Lexology Index (formerly Who's Who Legal), Client Choice and independent research. The assessment process includes nominations, peer reviews and client feedback.

This award underlines SKW Schwarz's position as one of the leading law firms in the Media & Entertainment sector and reflects our commitment to professional excellence and innovation. It confirms the quality of our daily work and the added value we offer our clients.

We congratulate all the winners of the Lexology European Awards 2025 and thank our clients for their trust and Lexology for this recognition.

SKW Schwarz receives nominations in the Trademark and Copyright & Design categories. Attorney Dr. Daniel Kendziur is nominated in the category Soft IP Practitioner of the Year. These nominations reflect our leading position in IP law and underline our ongoing commitment to effectively protecting and defending the interests of our clients.

The prestigious Managing IP Awards have been recognizing outstanding achievements in the field of IP law in over 50 jurisdictions for 20 years. The research and selection process is based on an independent analysis by experts who collect extensive data from law firms, IP practitioners and their clients by means of interviews, emails and online surveys. Publicly available information such as court and IP office files are also included in order to precisely assess the significance and relevance of the individual cases.

The ceremony will take place on April 10 at the Royal Lancaster in London. We would like to thank our clients for their continued trust and look forward to the announcement of the Managing IP EMEA Awards 2025.

The new Cannabis Act (CanG) came into force in Germany on April 1, 2024. Article 1 of the CanG contains the Consumer Cannabis Act (KCanG), which regulates the handling of cannabis for personal use, while Article 2 contains the Medical Cannabis Act (MedCanG), governing the supply of cannabis for medical and scientific purposes. 

As a result, cannabis has been removed from the scope of the Narcotic Drugs Act. The reclassification of cannabis from a narcotic drug to a regulated substance and its partial decriminalization mark a significant shift in German drug policy. The goal is to curb the black market and reduce health risks, such as contamination.

While the handling of cannabis was previously subject to a Europe-wide tender by the Federal Institute for Drugs and Medical Devices (BfArM), authorization is now granted through a licensing procedure. This is intended to create more flexible market conditions and expand production capacity in Germany.

Permit for the handling of medicinal cannabis under Section 4(1) MedCanG

Companies that intend to cultivate, produce, trade, import, export, dispense, retail, otherwise place on the market, obtain, or acquire cannabis for medical or medical-scientific purposes require a permit under Section 4 MedCanG. This permit is issued by the BfArM upon application.

Exceptions apply to the sale of medical cannabis by doctors and pharmacies, which fall under the supervision of the respective state authorities.

The costs incurred are regulated by a special fee ordinance and generally fall within the five-digit range (see BMGBGebV Chapter 15). Licenses issued under the BtMG before the CanG came into force remain valid. Pharmaceutical wholesalers holding a permit under Section 3 BtMG for domestic trade will also be granted a permit under Section 4 MedCanG. However, an application is required, though it does not need to specify the type of cannabis, as a full permit has already been issued.

Application and scope of the permit

The permit application must include details of the responsible person and supporting documents, such as a certificate of good conduct and proof of the required expertise in handling cannabis. The required proof of expertise is governed by Section 7(3) MedCanG. Depending on the intended activities, applicants must provide evidence of a medical license to practice as a pharmacist, a degree in biology, chemistry, pharmacy, human or veterinary medicine, or proof of training as a wholesale and foreign trade clerk, along with confirmation of at least one year of experience in the pharmaceutical trade.

The permit includes details about the location of the business premises, whether handling for medical or medical-scientific purposes is permitted, the specific activities allowed, and the type of cannabis with which these activities may be carried out. It should be noted that for cultivation, multiple business premises of a company can only be combined under a single permit if they are located in neighboring municipalities.

It is therefore important for companies to apply for a permit under Section 4 MedCanG and to comply with the documentation requirements (e.g., for business premises or the type of cannabis). Violations may result in fines of up to EUR 30,000.

Storage of cannabis products

According to Section 21 MedCanG, companies must take appropriate measures and safety precautions, such as storing cannabis in sealed containers or rooms. Logistics companies that transport, store, or hold cannabis on behalf of authorized participants do not require a permit under Section 4 MedCanG, but the shipments may not be stored for longer than necessary for onward transport. If longer storage is required, a separate permit must be obtained.

Distribution of medicinal cannabis

Medicinal cannabis may only be dispensed by pharmacies with a doctor's prescription, according to Section 3(2) MedCanG. Pharmacies are not subject to the licensing requirement (see Section 5(1) No. 1 MedCanG), as they are already regulated and monitored under pharmaceutical and pharmacy laws.

According to Section 3(1) MedCanG, medicinal cannabis may only be prescribed by doctors or administered as part of a medical treatment and is subject to the general requirements for prescription-only medicines. The prescription does not have to be linked to a specific diagnosis; rather, the doctor alone decides whether treatment with medicinal cannabis is necessary. Private prescriptions can be issued for self-payers, or reimbursable prescriptions can be issued through statutory health insurance in accordance with social insurance regulations.

Accordingly, seriously ill health insurance policyholders are entitled to a supply of medicinal cannabis if no generally recognized treatment is available or cannot be used, based on the doctor's decision, and there is a (not entirely implausible) prospect of a positive effect. This must be assessed on a case-by-case basis. Until now, the prescription had to be approved by the health insurance fund. Since October 2024, exceptions have been made for doctors holding certain additional qualifications; initial approval by the health insurance fund is no longer required in these cases. This aims to reduce administrative hurdles and prevent delays, enabling patients to obtain cannabis for medical purposes more easily and quickly. However, the dispensing of medicinal cannabis for consumption purposes remains excluded.

Excursus: Telemedicine

Telemedical treatment refers to the prescription of medicines through remote treatment using audiovisual communication methods or video consultations. Section 3(1) MedCanG does not provide further detailed regulations on this matter; therefore, a physical separation between doctor and patient is not excluded and may be permissible depending on the individual case.

Caution should be exercised with business models where operators of an online platform offer cannabis while simultaneously connecting doctors and a mail-order pharmacy to the platform. Typically, after completing a questionnaire, the user is either offered a video consultation or a prescription for medicinal cannabis is immediately issued after submitting the data. This prescription is then forwarded to the connected mail-order pharmacy, which sends the medicinal cannabis to the patient.

It is doubtful whether the evaluation of a questionnaire without personal contact can truly be regarded as medical treatment. If there is no proper prescription, this does not legitimize the dispensing of medicinal cannabis. In such cases, both doctors and pharmacists may be liable to prosecution under Section 25(1) No. 2, (4) sentence 2 No. 1 MedCanG, while the operators of the platform may generally be liable for incitement. However, if a video consultation takes place, these risks do not typically arise, as it can be considered medical treatment, although this still depends on the individual case.

Berlin, February 28th, 2025

SKW Schwarz is once again strengthening its Berlin office: Christoph Conrad will join as a partner from Leinemann on the 1st of March 2025. He will work at SKW Schwarz in the Public Sector and Real Estate departments. Counsel Annett Hartwecker, who already joined SKW Schwarz in January, will become part of Christoph Conrad's team, also from Leinemann.

Christoph Conrad specialises in construction and architectural law and administrative law. He specialises in public construction and planning law as well as environmental and nature conservation law. He advises public clients as well as private investors on development plan and planning permission procedures and represents them in judicial review proceedings. In construction and architectural law, he advises and represents project developers, builders, property developers and construction companies both in contractual matters and in the enforcement and defence of claims. Christoph Conrad began his career as a legal adviser at Planungsgesellschaft Bahnbau Deutsche Einheit mbH, where he was responsible for the planning approval procedures for two German Unity rail transport projects. In 1995, he founded a supra-local law firm with other partners. From 2003 to 2007, he was a partner at the Berlin office of Heuking Kühn Lüer Wojtek and has been a partner at Leinemann Partner since 2007.

Annett Hartwecker advises both public clients and bidders on the implementation of and participation in procurement procedures in the areas of construction, supplies and services. She advises clients on the preparation of tender documents, supports them in the strategic planning and implementation of complex tenders and represents them in public procurement review proceedings.

‘With Christoph Conrad and Annett Hartwecker, we have gained two very experienced colleagues who will be an excellent addition to our team with their expertise, particularly at the interface between the real estate and public sector areas. We are very much looking forward to working with them,’ says Partner and Head of Real Estate Dr Klaus Jankowski.

Christoph Conrad says ‘I am very pleased to be able to support the two teams at SKW in a pleasant, collegial environment.’

The Real Estate and Public Sector departments at SKW Schwarz have a total of 15 lawyers at the Berlin, Hamburg, Frankfurt and Munich offices, including eight partners.

The press chamber of the Hamburg Regional Court has rejected the application by the Berlin gallery owner couple König for an injunction against the novel “Innerstädtischer Tod” by Christoph Peters.

Johann and Lena König had applied to the court for an injunction against the distribution of the novel because they believed they recognized themselves in the fictional gallery owner character Konrad Raspe and his wife. They claimed that their personal rights had been violated.

The decision means that distribution of the book by Luchterhand Literaturverlag, a member of the Random House publishing group, remains permitted for the time being.

The court followed SKW Schwarz's argument that artistic freedom outweighed the asserted personal rights in this case.

The decision is not yet final.

Munich, February 17, 2025

SKW Schwarz has advised Synapsion GmbH on the sale of its majority stake in bb-net media GmbH to Econocom Deutschland GmbH.

Econocom acquires 80 percent of the shares in bb-net media from the founder Michael Bleicher and the previous CEO Marco Kuhn. bb-net media GmbH will remain an independent company and will continue to be managed by Marco Kuhn as CEO. Michael Bleicher and his investment company Synapsion will remain shareholders.

bb-net media GmbH, founded in 1997 and based in Schweinfurt, is the market leader for IT refurbishment.

Econocom Deutschland, headquartered in Frankfurt am Main, is part of the internationally active Econocom Group and has been supporting medium-sized companies, corporations and the public sector in the field of IT procurement, financing and services for almost 40 years.

Consultant Synapsion GmbH: 
SKW Schwarz, Munich: Dr. Martin Böttger (Partner, Corporate M&A, lead), Christine Wärl (Associate, Corporate M&A), Dr. Johann Heyde (Partner, Media Law)

The British specialist publisher Chambers and Partners has published the Chambers Germany 2025 ranking. We are proud of the renewed recognition in our core areas, which further consolidates our position as one of the leading law firms in Germany.

Outstanding expertise in TMT: Media

SKW Schwarz was particularly highlighted in the area of TMT: Media, confirming its top position in Band 1/4. Our firm is characterized by comprehensive expertise in media law issues - from film production and licensing agreements to music law and gaming. Our ability to resolve complex media disputes and our in-depth understanding of the industry are highly valued by our clients.

Recognition in other core areas

SKW Schwarz was also ranked in the following areas:

• Corporate/M&A: Mid-Market in Band 6/6
• Intellectual Property: Trade Mark & Unfair Competition in Band 4/5
• TMT: Information Technology in Band 3/4

Individual awards for leading lawyers

In addition to the firm, one female lawyer and four male lawyers were also recognized for their outstanding achievements in their areas of expertise:

• Dr. Rembert Niebel in Intellectual Property with Band 5/5
• Sandra Sophia Redeker in the field of Intellectual Property with Band 5/5
• Prof. Dr. Mathias Schwarz, recognized as Senior Statespeople in the field of TMT: Media, for his many years of formative expertise
• Dr. Andreas Peschel-Mehner in the field of TMT: Media with volume 4/4
• Dr. Martin Böttger, recognized as a Notable Practitioner in the field of Corporate/M&A

Since 1989, Chambers and Partners has conducted thousands of interviews each year with a team of 130 editors to list the leading lawyers and law firms in 175 countries.

The current Legal 500 Ranking 2025 has been published. The law firm is recommended in a total of 13 practice areas. SKW Schwarz's inclusion in the Private Clients and Non-Profits category is particularly pleasing. We are also pleased about the firm's renewed top-tier rankings in the areas of media/entertainment, media/digital content and media/gaming.

We congratulate all lawyers recommended in the ranking:

IT-Transactions and Outsourcing:
Dr. Daniel Meßmer, Dr. Matthias Orthwein
“Daniel Meßmer acts as practice group head and is particularly in demand for IT law issues relating to contract drafting and negotiation. Data protection in the context of innovative business models is one of Matthias Orthwein's core areas.”

Trademark law:
Dr. Oliver Stöckel, Sandra Sophia Redeker
“The team is headed by Oliver Stöckel, who is primarily active in the life sciences and healthcare sectors and advises on the entire spectrum of soft IP. In addition to disputes, Sandra Sophia Redeker's core areas of expertise include the development of brand and design portfolios and acts at the interface with competition law.”

Competition law:
Dr. Markus Brock, Dr. Magnus Hirsch, Dr. Oliver Stöckel
“Oliver Stöckel is particularly active in the life sciences sector and heads the practice group, in which IP lawyers Markus Brock and Magnus Hirsch are among the other core contacts.”

Media – Entertainment:
Dr. Johann Heyde, Moritz Mehner, Dr. Andreas Peschel-Mehner
“Practice head Johann Heyde primarily advises film and television clients on the financing of their productions, copyright and personality rights issues and the distribution of their media. He also advises clients on publishing and music law. Andreas Peschel-Mehner offers further expertise in the area of film financing and is also frequently mandated by video-on-demand platforms and other digital clients on issues relating to usage concepts, the protection of minors and age verification, while Moritz Mehner, partner since January 2024, is an expert in e-sports law.”

Media – press & publishing law:
Dr. Johann Heyde, Dr. Konstantin Wegner
“Konstantin Wegner focuses on advising publishers on the risk of legal challenges to upcoming publications and represents clients in court when lawsuits are filed. He heads the group together with Johann Heyde, a specialist in the film and television sector.”

Public law – public procurement law:
René M. Kieselmann, Dr. Karin Deichmann, Dr. Mathias Pajunk
“The expertise in the latter area was recently demonstrated in a successful case before the Higher Regional Court of Thuringia, which concerned a sector exception in the awarding of rescue services; here, practice group head René Kieselmann often acts as lead counsel.”

Client reference:
“The strength of the team around René Kieselmann, Mathias Pajunk and Karin Deichmann lies in their willingness and ability to penetrate and analyze the client's interests as well as the particular characteristics of the respective business model.”

Private clients and non-profits:
Dr Gerd Seeliger, Dr Christoph Philipp
“SKW Schwarz complements its advisory capacities in strategic succession planning, which routinely consists of corporate, inheritance, tax and foundation law matters as well as contentious issues, with family law expertise. Wealthy private individuals, foundations and family companies rely on these interface competences in both national and cross-border contexts. Gerd Seeliger (inheritance and inheritance tax law, reorganisations and transformations, succession planning) heads the team. In November 2024, a three-person team led by Christoph Philipp (asset structuring as well as national and international succession planning) joined POELLATH.”

Commercial Litigation:
Martin Himme, Franziska Ladiges, Dr. Ulrich Reber, Arndt Tetzlaff
“Practice group head Arndt Tetzlaff is the central point of contact, in particular for companies, banks and insurance companies in directors' and officers' liability and product liability cases in international commercial law as well as in the area of post-M&A litigation. Other practice areas include civil law and insolvency-related disputes, which are the focus of Ulrich Reber, who is experienced in international commercial law. Franziska Ladiges focuses on disputes in IT and data protection law, while counsel Martin Himme has expertise in contract law disputes, product liability proceedings and damages litigation.”

Special congratulations go to Dr Daniel Meßmer and Moritz Mehner for being nominated in the ‘Next Generation Partner’ category.

The Legal 500 Germany provides a comprehensive overview of around 400 commercial law firms and 2,700 lawyers in Germany. The evaluation is based on extensive research, law firm interviews and client surveys.

SKW Schwarz has been recognized by the British specialist publisher Chambers and Partners in the current Chambers Global 2025 ranking. We are delighted to have been recognized in the Corporate/M&A: Mid-Market category and again in the Intellectual Property: Trade Mark & Unfair Competition category.

Chambers Global lists the two partners Sandra Sophia Redeker and Dr. Rembert Niebel among the leading names in Intellectual Property: Trade Mark & Unfair Competition.

The British specialist publisher Chambers and Partners has been listing the leading lawyers and law firms in 175 countries since 1989. According to its own information, 130 editors conduct thousands of interviews with lawyers and clients every year in order to identify the best law firms and lawyers.

The Federal Ministry for Economic Affairs and Climate Protection and the Federal Ministry of Justice recently published the draft bill for a law to implement the European Regulation on the implementation of the Regulation on the protection of personal data. Although everyone is already talking about the AI Regulation and the first regulations are to be complied with from February of this year, various regulations still require implementation at national level. For example, each member state must appoint a notifying authority and a market surveillance authority. 

Like the regulation, the draft bill aims to create a standardised internal market for AI-based goods and services. Special attention is paid to promoting innovation, while at the same time ensuring a high level of protection in terms of health, safety and the fundamental rights enshrined in the Charter, including democracy, the rule of law and environmental protection.

Regulatory content of the planned implementation law

As part of the AI Implementation Act, the Federal Network Agency is to be established as the central market surveillance authority and contact point in accordance with Article 70 (para. 2 sentence 3) of the AI Regulation (KI-VO). The authority would then also function as a central complaints office. It would also operate the sandboxes referred to in Articles 57 and 58 of the AI Regulation and set up a coordination centre to support other competent authorities in their tasks. Furthermore, an independent body will be set up at the authority, which will also be responsible for market surveillance in the cases referred to in Article 74(8) of the AI Regulation. The Chamber will play a key role in monitoring the implementation of tests for high-risk AIs. The aim here is to pool expertise in relation to artificial intelligence (AI) and make it available to the existing authorities in a resource-efficient manner. 

Various implementation models were examined with regard to ensuring the independence of market surveillance. The decision in favour of the current solution, which is based on the principle of the existing Board of Appeal, should be the most appropriate solution based on a consideration of the legal requirements and practical feasibility.

Section 7 of the draft stipulates that those authorities that have been designated by federal or state law as market surveillance authorities for the implementation of the harmonisation legislation listed in Annex I Section A of the Regulation (e.g. Directive 2009/48/EC, Directive 2013/53/EU or Directive 2014/53/EU) are to be transferred to the competent authorities under national law or, for example, the Federal Office of Consumer Protection and Food Safety or the Federal Ministry of Food Safety. Directive 2009/48/EC, Directive 2013/53/EU or Directive 2014/53/EU, which apply to the competent authorities under national law or (such as the Federal Office of Consumer Protection and Food Safety or the Federal Ministry of Defence) should also perform the tasks as competent market surveillance authorities if AI systems are associated with products to which the provisions listed in Annex I Section A apply. This is intended to ensure a seamless integration of the existing regulatory structures into the implementation of the AI Regulation. 

The sanctioning provisions of the AI Regulation (Article 99 (3) to (5) AI Regulation) will be transposed into national law in that the provisions of the Act on Regulatory Offences (with the exception of Section 17 OWiG) will apply accordingly.

Open points and criticism

However, the draft bill raises various questions and concerns. At the centre of these are the selection of the authority and the practical implementation of the proposed responsibilities, which entail both legal problems and challenges related to the federal structure in Germany. 

1) Federal Network Agency as the central supervisory authority 

A key point of the draft is the decision to appoint the Federal Network Agency (BNetzA) as the central supervisory authority for the implementation of the AI Regulation. This choice is not uncontroversial and has led to discussions regarding practical feasibility and the legal framework. In the past, the Federal Data Protection Authority (the Federal Commissioner for Data Protection and Freedom of Information [BfDI]) has offered itself as an alternative for this task.

It is argued against the BfDI that its expertise is primarily focussed on data protection and not on the technical market surveillance of AI. Arguments in favour of the BNetzA, on the other hand, include technical expertise and the standardised interpretation of regulations. The BNetzA already has extensive expertise in the area of product safety, particularly with regard to AI models and how they work. In addition, the transfer of competences to a single authority would lead to a uniform interpretation and application of the requirements of the AI Regulation. Another aspect cited was that this would avoid sectoral fragmentation and ensure a practical, low-bureaucracy and innovation-friendly implementation of the AI Regulation. In particular, the fact that there was a lack of sufficient AI specialists argued against splitting the process between different authorities.

2) Compatibility with Article 74(8) of the AI Regulation 

However, there is uncertainty as to whether the requirements of Article 74(8) of the AI Regulation have been adequately observed. This stipulates that, with regard to the market surveillance of high-risk AI systems used in security-relevant areas such as law enforcement, border management, justice and democracy, the competent authority must implement the conditions of the JHA Data Protection Directive (EU) 2016/680, in particular Articles 41 to 44. This directive stipulates that the processing of personal data by the authorities must be lawful, purposeful and secure. It explicitly stipulates that independent supervisory authorities must be appointed to monitor the application of the directive.

According to the explanatory memorandum to the AI Implementation Act, the provision in Section 3 (5), according to which the Market Surveillance Chamber acts completely independently and is not subject to any direct or indirect influences or instructions, would guarantee the independence of the authority in accordance with the requirements of Article 41 (2) of the JHA Data Protection Directive. In this respect, the implementation of the requirements of Articles 41 - 44 of the JHA Data Protection Directive is guaranteed by Section 3 (3) and (4). The draft bill therefore takes the JHA Data Protection Directive into account, but consistent application and review of the high requirements would still be necessary in order to ensure the appropriate standard of data protection when monitoring high-risk AI.

3) Conflict with the federal structure 

Another challenge that the planned regulations will have to face concerns the federalist distribution of competences and the constitutionally guaranteed autonomy of the federal states in Germany. As the central market surveillance authority, the Federal Network Agency would have far-reaching powers of control over state authorities. In practice, this is usually implemented through a federally structured organisation of authorities that preserves the responsibilities at federal and state level, such as in data protection.

The high level of complexity and intricacy of AI regulation may stand in the way of an implementation similar to data protection. However, the planned establishment of joint AI supervision would require an international treaty between the government and the states in order to create a sufficient legal basis for breaking through the federal system. The federal and state governments can regulate and distribute competences and the coordination of task fulfilment by means of an international treaty. However, this would require a considerable amount of justification and administration, so it is questionable whether this would really be a sensible solution that could be implemented in a timely manner.

What happens next?

The implementation of the AI Implementation Act is urgent: The EU member states are obliged to complete the implementing legislation by 2 August 2025. In view of the upcoming change of government, it remains to be seen how the new government will deal with the draft and when it will come into force. It therefore remains exciting!

The renowned magazine World Trademark Review has once again published the WTR 1000 Germany ranking this year and awarded SKW Schwarz the coveted silver ranking for its excellent performance in the IP field.

The WTR editorial team comments on this recognition as follows:

“SKW Schwarz is the top address for advice in Germany and the EU.” The team continues to make inroads and has recently launched its Branded Content Focus Group, which covers new topics in IP, IT and entertainment and has been very well received by clients.

Also commended are Dorothee Altenburg (Bronze), Magnus Hirsch (Bronze), Margret Knitter (Gold) and Sandra Sophia Redeker (Silver).

The WTR writes:

“Sandra is extremely knowledgeable and highly regarded in the field of intellectual property. She is responsive, clear and her advice is easy to understand. Sandra is thoughtful, highly skilled and understands the business needs of her clients.

“Magnus is an excellent advisor. He is a very pragmatic litigator who is willing to settle but also fights hard to the end when necessary. Magnus is a vigorous advocate for his clients.”

“Margret is detail oriented, extremely professional and knowledgeable. Her timely, precise and immaculate business advice is invaluable. Margret is always realistic with her recommendations and maintains a commercial outlook at all times.”

Munich-based Altenburg excels in developing global trademark strategies for her domestic and international brands.

Rembert Niebel, the head of Baker McKenzie's German IP practice, joined the team in July 2023. Clients are enthusiastic about “his very high performance and high level of service.”

Daniel Kendziur, who joins the team from Simmons & Simmons, has a well-rounded practice covering unfair competition, trademark, design, copyright and plant variety matters. He has also diligently acquired expertise in the automotive industry, making him a go-to person for IP-related disputes in this sector.

The WTR 1000 remains the only publication to exclusively recommend experts and law firms in the trade mark sector and this year, for the thirteenth time, lists the leading players in over 80 key jurisdictions worldwide. Individuals and law firms are only included in the WTR 1000 if they receive sufficient positive feedback from market sources. The comprehensive selection and vetting process involved hundreds of in-person and telephone interviews with trademark professionals around the world and serves as a one-stop shop for those seeking trademark services.

Unlimited freedom for contracting authorities? 

The right to determine performance allows the contracting authority to independently define the requirements and criteria that a product or service to be procured must fulfil (see our ‘Drawer 1’). In recent years, the topic of ‘sustainability’ has also become considerably more important in the procurement processes of contracting authorities. This raises the question of the extent to which contracting authorities have a ‘free hand’ in defining sustainability requirements for the object of the contract.

Legal framework conditions

Contracting authorities can incorporate sustainability aspects into the subject matter of the contract via the specifications, among other things. In principle, contracting authorities have a great deal of room for manoeuvre in this regard, as they can generally define the requirements for the subject matter of the contract themselves. Section 31 VgV and Section 7a EU Para. 1 No. 2 Para. 6 No. 1 VOB/A and Section 121 GWB must be observed. § Section 31 (3) VgV clarifies in this respect that technical requirements can also be set for the object of procurement that have an environmental connection. However, the prerequisite is that there is a connection with the subject matter of the contract. In addition, the characteristics must be proportionate in relation to its value and the procurement objectives. 

In addition, public contracting authorities are in many cases obliged to take environmental aspects into account when procuring road vehicles. The law on the promotion of clean and energy-efficient road vehicles is decisive here. Among other things, the implementation of the specified minimum targets - in particular compliance with specified emission limits - must be observed. 

Furthermore, Section 67 (2) VgV stipulates that contracting authorities should include various energy efficiency requirements in the specifications for energy-related supplies and services.

Restrictions due to case law of the public procurement review bodies?

The decision-making practice of recent years also shows that public contracting authorities have a great deal of room for manoeuvre when determining the subject matter of the contract. This can significantly promote the implementation of sustainability aspects in procurement processes. 

In a decision from 2014 (B. v. 07.05.2014 - Verg 46/13), the Higher Regional Court of Düsseldorf ruled that the use of environmentally friendly vehicles can be required by public contracting authorities. The subject matter of the procurement was the conclusion of a framework agreement for the towing and storage of vehicles parked in violation of the law. In accordance with the specifications from the contract award notice and the service description, the tow trucks used must have a green environmental sticker or an exemption licence in accordance with Annex 3 to the 35th BImSchV. The OLG came to the conclusion that the requirements for the environmental compatibility of the towing vehicles could not be used as a suitability criterion. This would put the bidders at an unreasonable disadvantage, as the vehicles with the required sticker would not have to be available to the bidders when the competition was held, but only at the start of the execution of the contract.

However, the environmental requirements in the form of additional requirements for the execution of the contract were permissible in accordance with Section 97 (4) sentence 2 GWB (old version) (‘execution criteria’). The background to this is that these are materially related to the subject matter of the contract.

The OLG Munich (decision of 9 March 2018 - Verg 10/17) also confirmed that environmental criteria can be taken into account in award procedures if they are objective and comprehensible. The background to the proceedings was a tender for the thermal utilisation/disposal of road demolition waste containing tar and pitch. The applicant was of the opinion that the obligation to send 100% of the road demolition waste for thermal utilisation/treatment was in breach of the provisions of the Closed Substance Cycle Waste Management Act (KrWG). In this respect, other measures should also have been permissible. The OLG came to the conclusion that the requirements of the KrWG must also be taken into account when determining the subject matter of the contract. It is true that the contracting authority has a wide margin of manoeuvre when determining the subject matter of the contract. However, the right to determine performance could be restricted by mandatory statutory regulations. The OLG also emphasised that the determination of the subject matter of the contract must be objectively justified and there must be comprehensible, objective and contract-related reasons for this. The determination must be arbitrary and non-discriminatory and must be documented accordingly. The Higher Regional Court of Frankfurt came to a similar conclusion in a comparable case (OLG Frankfurt a.M. B. v. 21.07.2020 - 11 Verg 9/19).

Conclusion

As a result of the extensive right of contracting authorities to determine performance, it is already possible to integrate requirements for the sustainability of the respective procurement object into an award procedure in the so-called ‘drawer 1’. The public procurement review bodies confirm the admissibility of such criteria. However, they emphasise the need for transparency and non-discrimination. Of paramount importance in this context is comprehensive and complete documentation of the considerations that are decisive for determining the subject matter of the contract. 

The current draft of the Public Procurement Transformation Act (VergRTransfG) also stipulates that contracting authorities should take at least one social or environmental criterion into account in the specification of services or at other stages of the award procedure (see Section 120 a (1) GWB of the draft law). However, it is currently unclear whether and when the law will come into force.

In the case of innovative and complex procurement processes, a negotiated procedure with a call for competition or a competitive dialogue (see Section 119 GWB and Section 14 (3) VgV) is generally also a good option in order to finally determine the subject matter of the service, taking into account the technical expertise of the bidders. It must be noted that minimum specifications for the subject matter of the service cannot usually be changed in the negotiations after the start of the award procedure.

IP infringement is not a national phenomenon. Often infringing goods are produced abroad and imported into the European Union and into Germany, and often the owners of IP rights know neither about the infringers nor about the infringing action beforehand. Seizure of infringing goods by customs authorities is thus a powerful tool for IP right holders to stop infringing products from entering European markets.

However, it is necessary to understand the proceedings in order to determine the best strategy and to take the right decisions. And for trading companies whose goods are seized by customs for alleged IP infringement, knowing their rights and how to exercise them is vital to avoid loss of goods and business, in particular in case of misunderstandings and unjustified seizures. In this article we will therefore explain what both IP owners and traders should know about customs seizure for alleged IP right infringement.

A. EU and National Customs Seizure Procedures

The procedure for customs action allows rightsholders, intellectual property collective management bodies, professional defense organizations, groups of producers and, to some extent, licensees to submit applications if they suspect goods are infringing on their intellectual property rights (IP rights).

1. IP Rights subject to Customs Action

There are basically two types of customs seizure applications – Union applications and national applications. The key distinction between Union and national applications lies in their scope, both from a territorial perspective and concerning the IP rights and specific situations that may be subject to the application.

A national application is submitted within a single member state, seeking action from customs authorities solely in that state. Conversely, a Union application based on EU Regulation No. 608/2013 (hence force short “Regulation 608/2013”) is submitted in one-member state but requests customs authorities to act in that member state and at least one additional member state to take action in their respective member state. Union applications under the Regulation are possible only for IP rights based on Union law producing effects throughout the EU (Article 4).

For national IP rights, the laws of the member states provide additional national legal provisions. In Germany, national IP rights can be enforced through customs seizure on the basis of § 142a of the Patent Act (Patentgesetz), § 25a of the Utility Model Act (Gebrauchsmustergesetz), § 146 et seq of the Trademark Act (Markengesetz), § 111b Copyright Act (Gesetz über Urheberrecht und verwandte Schutzrechte), § 55 et seq of the Design Act (Designgesetz) and § 40a of the Plant Variety Act (Sortenschutzgesetz).

The following table shows which IP rights may be enforced in customs as Union applications or as national applications (either under the Regulation or based on national aw) only:

2. What may trigger Customs Seizures?

Under Regulation 608/2013, customs may seize goods that are suspected to infringe IP rights when they are declared for release for free circulation, export or re-export, when these goods enter or leave the customs territory of the EU or when they are placed under a suspensive procedure or in a free zone or free warehouse (Article 1 of the Regulation). Customs may act either on the basis of an application by the IP right owner or even without such application “ex officio”.

Contrary to customs action under Regulation 608/2013, seizure of infringing goods under German enforcement laws is only possible following a respective application by the IP right owner (no “ex officio” action) and, moreover, only if the infringement is obvious.

The latter is one of the most important differences between the EU and the national German seizure procedure in practice: While a mere suspicion of infringement is sufficient under Regulation 608/2013, the requirement of obviousness of IP right infringement under the national German customs enforcement laws is much harder to fulfill and often not considered to be met under the stricter German laws.

3. What happens once infringing Goods have been seized?

Both under Regulation 608/2013 and German enforcement laws, customs authorities will inform the declarant or holder of the goods (the person importing, exporting or in possession of the goods) and the IP right owner once goods are seized for IP right infringement. The notification details the suspension of customs release, information on the procedures for destruction and contains further information on the type and quantity of the seized goods as well as available images. Under Regulation 608/2013, this notification must be given within one working day; under national German laws, the notification must be made without any undue delay.

4. What can or should a person or company whose goods are seized do?

a) Rights and Options of the Declarant / Holder of the Goods under Regulation 608/2013

The declarant or holder of the goods has the right to inspect the detained goods (Article 19 (1)). He then needs to decide whether to consent to the destruction of the seized goods or to oppose it.

• If the declarant agrees to the destruction of the goods, the declarant must confirm this in writing within 10 working days (or 3 days for perishable goods).
• In the alternative, the declarant can also oppose the destruction.
• The declarant may also request the early release of goods in cases where proceedings have been initiated to determine infringement of specific intellectual property rights. However, early release is contingent on provision of a sufficient guarantee to protect the interests of the IP right holder, and on the absence of precautionary measures imposed by the relevant authority (Article 24 (2)).
• Remaining silent or ignoring the notification is usually not a good option. If no response is received within the 10 working days deadline (or 3 days for perishable goods), agreement to destruction is presumed, and the goods may be destroyed under customs supervision (Article 23 No. 1 (c) sentence 2). 

In particular due to Article 23 No. 1 (c) sentence 2 of the Regulation, it is highly recommended that the declarant or holder of the goods reviews the seizure immediately once notified by the customs authorities. Any lack of reaction within the 10 business days deadline will otherwise almost certainly result in the destruction of the goods by customs.

b) Rights and Options of the Declarant / Holder of the Goods under German laws

Similar to Regulation 608/2013, the customs authorities will inform the declarant or holder of the goods and the IP right owner of the seizure when acting under German national enforcement laws. The deadline for the declarant or holder of the goods to decide about consent or opposition is two weeks (which is similar, but not necessarily identical to the 10 working day deadline under Regulation 608/2013). Consent will lead to confiscation of the seized goods.

The declarant or holder of the goods may also apply for a court decision on the seizure under Sec. 67 of the German Administrative Offenses Act (Ordnungswidrigkeitengesetz) if he believes that the seizure is not justified.

5. What can or should the IP right owner do?

a) Rights and Options of the IP right owner under Regulation 608/2013

Once notified about the seizure, the IP right owner may request detailed information about the detained goods, including the consignor, consignee, and intended destination. Right holders are allowed to inspect the goods and obtain samples for analysis (Article 17(4)). Any information received from customs, including the nature or samples of the goods, must be used exclusively for initiating infringement proceedings, supporting criminal investigations, seeking compensation, agreeing on the destruction of goods, or determining guarantee amounts.

The further options of the IP right owner depend on how the declarant or holder of the goods has reacted to the seizure:

• If the declarant or holder of the goods has consented to the destruction or such consent is deemed to be given due to lack of response (see 4.a) above), the IP right owner must confirm in writing, within 10 working days (or 3 working days for perishable goods), to the customs authorities whether the goods are actually infringing and that he agrees with the destruction. If such confirmation is made, the customs authorities will destroy the seized goods accordingly. Failure to provide such confirmation within the stipulated timeline will lead to the release of the goods.
• If the declarant or holder of the goods has opposed the destruction, the IP right owner has 10 working days (or 3 days in case of perishable goods) after notification of the opposition to initiate court proceedings to determine infringement, and to notify the customs authorities of the initiation of these proceedings. Failure to notify customs of such proceedings within this time frame may result in the release of the goods.

Therefore, also the IP right owner should always keep track of the seizure proceedings and should act quickly because failure to adhere to the deadlines applying to the IP right owner may result in the (unintended) release of the goods.

In any case, in the event of a seizure the IP right owner must inform the competent customs authority if the IP rights covered by the application or decision have ceased to have effect in the meantime, if he has lost the right to make the application, or if any information provided in the application has changed. Failure to provide such updates, as required under Article 15, may result in the suspension of customs actions.

Finally, the IP right owner must exercise caution to avoid liability towards the declarant or the holder of the goods. Liability may arise if the IP right owner discontinues proceedings due to his own acts or omissions, fails to return or damages provided samples, or if the goods are later determined not to infringe IP rights, as stipulated in Article 28.

b) Rights and Options of the IP right owner under German laws

If the declarant opposes the seizure, the IP right owner must either withdraw the seizure application or provide a court decision confirming the seizure within two weeks after notification of the opposition. If the IP right owner can demonstrate within this deadline that he has applied for a court decision, but has not received the decision yet, the deadline will be extended by another two weeks in which the IP right owner must then produce the confirming court decision. These short deadlines can typically only be met with fast applications in interlocutory injunction proceedings. Any failure of the IP right owner to adhere to these requirements and deadlines in case of an opposition will result in the release of the seized goods.

6. Special Procedures for Goods in small Consignments under the Regulation

For goods transported in small consignments, a modified procedure applies under the Regulation. These goods must meet specific conditions: they must be suspected of infringement, must not be perishable, and must be covered by a decision granting an application. Additionally, the right holder must have requested this small consignment procedure expressly in his application (Article 26 of the Regulation).

7. What applies to goods in transit?

The same procedures outlined above generally also apply to goods in transit in Germany or in another EU member state if there is a suspicion of infringement of IP rights by these goods and the customs authorities have reason to believe that the goods declared to be in transit are actually intended to remain in the EU or to be reimported into the EU after transit. In case of trademark infringement, goods may even be seized in pure transit cases, i.e. even without any suspicion that they will remain in the internal market or will be reimported into the EU.

In addition, the Commission and customs authorities may share specific data and information with relevant authorities in third countries. This exchange may include details such as the nature and quantity of goods suspected of infringing IP rights, information on the IP rights potentially violated, and transport specifics, including vessel names, container numbers, freight documents, and transhipment locations, to facilitate tracking the movement of goods.

B. Preparing and Filing Customs Seizure Applications

1. Who can file applications?

At both the national and Union levels, eligible applicants include rightsholders, intellectual property collective management bodies, professional defense bodies, and groups of producers, as defined under point (2) of Article 3 of Regulation 608/2013 and Article 49 (1) of Regulation No. 115/2012.

For national applications, the right to initiate proceedings extends to persons or entities authorized by the rightsholder to use the intellectual property and act on their behalf, in particular licensees. For Union applications by licensees, stricter rules apply: Union applications can only be submitted by exclusive licensees whereas the license must cover the entire territory of at least two member states.

2. What must an application contain?

Applications for customs seizure due to infringement of IP rights can be filed with the relevant customs authorities, as outlined in Article 3 of the Regulation. In Germany, this is the “Zentralstelle Gewerblicher Rechtsschutz” (ZGR) of the German customs authorities (“Zoll”), also for national applications.

The filing is made electronically in a standardized form via “ZGR online”. The application must specify the IP rights to be enforced. Furthermore, the applicant must include details about the applicant’s identity, their status under Article 3 of the Regulation or the respective national rules and evidence of their entitlement to file the application. If the application is submitted via a representative, it must include information about the representative and evidence of the representative’s authority to act on the applicant’s behalf. For Union applications, applicants must identify the member states where customs action is requested.

In order to be successful in practice, the application should also indicate the relevant type of goods, technical or design data for identifying both original and counterfeit goods and a risk analysis. Since customs authorities can only make a summary assessment when examining goods, these data should be as precise and helpful in such summary assessment as possible. For example, features clearly identifying genuine products as well as typical features of fake products should be described in detail. Photos and other explanatory images can help customs staff to identify infringing products with their naturally limited examination possibilities as well. If the IP right owner is aware of certain known infringers, a specific origin of fake products or traders of infringing products, it is also advisable to pass this information on to the customs authorities.

In cases where goods have been detained without a pre-existing application under the Regulation, in particular because customs authorities suspect IP infringement by themselves, the rightsholder is required to file a valid application within four working days after being notified by customs. The competent customs authority will then decide on the application within two working days (Article 9 of the Regulation). Seizure without prior application, however, is only possible based on the Regulation, not on the basis of national German laws.

If an application is submitted after customs authorities have suspended the release or detain goods under Article 18 (3) and lacks specific information required under Article 6 (3) (g), (h), or (i), the application will only cover the suspension or detention of those goods. However, the missing information must be provided within 10 working days of the notification to expand the application’s scope. 

3. What are the further Proceedings after an Application is filed?

The customs authority has 30 working days to approve or reject applications under the Regulation.

If an application is incomplete, the competent customs authority is required to notify the applicant within 10 working days. This notification halts the 30-day timeframe for the authority’s decision until the missing information is provided. If the applicant fails to supply the required information within 10 working days, the application will be rejected.

Decisions granting customs action are valid for one year from the date on which the decision takes effect and may be renewed for an additional year if requested at least 30 working days before the initial period expires. To qualify for an extension, the rightsholder must ensure that any outstanding debts related to the decision are resolved (Article 12 of the Regulation). An IP right owner whose application has been granted is also called the “holder of the decision” by the Regulation.

In the case of rejection, the authority is obligated to provide a reason. The rejection is subject to legal review by competent courts.

Applicants must also undertake to notify customs authorities of any relevant changes, such as e.g. the expiration of their IP rights or amendments to their entitlement, assume liability as specified in Article 28, and bear costs as outlined in Article 29. They must agree to the processing of their data by the Commission and member states. If opting for procedures under Article 26, they must also agree to cover costs associated with the destruction of goods. The competent customs authorities may amend a decision to include additional intellectual property rights upon the request of the decision holder, provided the request includes the necessary information specified in Article 6 (3), and for Union applications, the additions are limited to rights covered by Article 4.

However, in cases where the IP right ceases to be effective or the applicant loses his entitlement to submit an application, customs authorities will no longer take action. The decision granting the application will then be revoked or amended by the competent customs authorities.

Applications under German national law are treated very similarly, with the difference that there are no specific timelines set forth in the law for the processing of applications. Decisions granted under German national law are also valid for one year and may be renewed. Rejections by customs authorities can be subject to legal remedies to the competent courts as well.

C. Conclusion

Both IP right owners and traders – irrespective of the nature of the goods – should acquaint themselves with at least the basic procedures of customs seizure for suspected IP right infringement. For IP right owners these procedures can be a very powerful and efficient tool to stop infringing goods from entering the EU or specific EU countries. And for traders it is important to be aware of their rights and in particular of the short deadlines and necessary reactions in order to avoid unwanted consequences of customs action, such as e.g. destruction of goods because a seizure has not been opposed within the short 10 working day deadline on the one hand, or unintended legal disputes about infringement on the other hand caused by unjustified oppositions in case of clear infringements. If in doubt about the details, it is therefore highly recommendable to seek expert legal advice in a timely manner.

Munich, 14. January 2025

SKW Schwarz has advised Airbus Defense and Space GmbH (Airbus) on the sale of UP42 GmbH (Up42), a next-generation earth observation platform, to National Space Company (NSC), Saudi Arabia's leading commercial space services provider.

The closing of the transaction is subject to customary closing conditions and regulatory approvals.

Airbus founded UP42 in Berlin in 2019. The company is considered a pioneer in facilitating access to satellite and aerial image data sources, as well as the use of geospatial data via the cloud. 

Established in 2024, NSC is a subsidiary of the Saudi Arabian Public Investment Fund (PIF). The company's mission is to meet Saudi Arabia's growing demand for EO and geospatial solutions in line with Saudi Arabia's Vision 2030. 

UP42 is to be integrated into NSC’s growing geospatial division.

Advisors to Airbus: 
SKW Schwarz, Munich: Dr Martin Böttger (lead), Stephan Neubauer (Hamburg; both Corporate/M&A,), Associate: Christine Wärl (Corporate/M&A)

As of January 1, 2025, the new Film Funding Act (“FFG”) has come into force. Since the collection of the film levy, which finances film funding, ended under the old FFG on December 31, 2024, a timely reform of the FFG was necessary. The new FFG continues the collection of the film levy for five years and comprehensively reforms film funding. We highlight the most significant changes.

Extensive Automation of Production and Distribution Funding

A major change in film funding under the new FFG is the elimination of selective project film funding on the one hand and project funding for distribution and sales companies on the other hand. The regulations regarding the composition and procedures of the funding commissions are also removed in the new FFG. The old funding instruments involved evaluative funding decisions by funding commissions based on an "overall assessments." Processing the associated funding applications by the German Federal Film Board (“FFA”) was time-consuming, especially the preparation of the film projects for the commissions and of the necessary documentation and forms. Project film funding was designed as top-tier funding with a minimum funding amount of EUR 200,000.

The new FFG fully transitions production and distribution funding to an automatic reference-based system. This makes film funding significantly more predictable and transparent for applicants and rewards those involved in the economic and cultural success of a film even more. Financial resources freed up from the previous project film funding will benefit reference film funding. With the threshold for participation in production funding lowered to 25,000 points per reference film, the FFA predicts that 42 more full-length reference films will qualify for production funding than before. Additionally, funding assistance will now also be granted to the directors and screenwriters of the reference film.

Clear Structures – German Federal Film Board becomes central Institution for Federal Film Funding

The organization of film funding under the FFG is now clearer than before. Starting in 2025, all federal film funding will be consolidated and managed under the FFA. The FFA will also take over the tasks of the Federal Government's film and media funding, including jury-based film funding financed by taxes and other media funding, such as in the area of games. The FFA will remain responsible for handling script development funding, even though this will be transferred to the tax-financed federal film funding under the reform.

The new FFG equips the FFA with comprehensive regulatory competence in line with its new role in film funding, thereby strengthening the FFA's self-governing autonomy. This allows the FFA to respond more flexibly and quickly to technological developments and changing market conditions. For example, it can establish additional funding requirements through guidelines and independently determine the festivals and awards that qualify for reference points. Specific references to awards (such as the Oscars) or festivals (such as the Berlin, Cannes, or Venice Film Festivals) are absent in the new FFG.

Further Changes

Change from Cinema Funding to partially Automated Project Funding 

The new FFG changes from cinema funding to a partially automated project funding model. The reference-based cinema funding is eliminated in the new FFG. Funding is granted when the funding requirements are met and funding is available. The final evaluative funding decision by the relevant funding commission is no longer required. Under the new FFG, individuals who have not previously operated a cinema are also eligible to apply, provided they intend to operate a cinema in Germany.

Cinema-Based Calculation of the Film Levy

Under the new FFG, the FFA calculates the film levy based on cinemas (not on screens anymore). The film levy is calculated based on the annual net revenue of a cinema as a whole. Cinema operators are exempt from the film levy if the net revenue per cinema does not exceed EUR 150,000 annually. By raising the threshold from EUR 100,000 to EUR 150,000, the legislature further protects operators of lower-revenue cinemas.

Unchanged Aspects

No Elimination of Media Services

Television broadcasters remain entitled to replace part of their contributions to film funding with media services in the form of advertising time for cinema films. However, the maximum percentage of media services for obligated contributors is significantly reduced from 40 percent to 15 percent. The initial draft of the new FFG had proposed eliminating media services altogether. Additionally, under the new FFG, video-on-demand services are also entitled to provide media services. This acknowledges the growing importance of video-on-demand services and their substantial reach.

No Establishment of a Diversity Advisory Board

Contrary to previous plans, the new FFG does not include provisions for establishing a Diversity Advisory Board. The board was intended to advise the FFA on issues related to diversity, gender equality, inclusion, and anti-discrimination and was to be involved by the FFA in a timely manner on these issues, but without directly or indirectly influencing artistic decisions. The federal parliament´s Committee on Cultural Affairs removed these provisions from the draft law a day before the third (final) reading in the federal parliament to secure the necessary majority for the law.

Conclusion

With the reform of the FFG, the legislature makes film funding more transparent and predictable for eligible applicants and significantly strengthens the competencies and powers of the FFA. Nevertheless, the FFG reform remains only one component of the Federal Government's announced comprehensive film funding reform. The tax incentive model and an investment obligation for streamers and media library providers did not make it through the legislative process before the end of the current legislative period. It remains to be seen whether and to what extent the legal status quo, with which the film industry will start in 2025, will change after the federal elections in February.

The legal dispute over the estate of Tut Schlemmer, widow of the internationally renowned Bauhaus artist Oskar Schlemmer, has been settled. The artist's grandchildren reached a settlement before the 19th Civil Senate of the Higher Regional Court of Stuttgart in just under two months (case no. 19 U 61/23). 

Oskar Schlemmer, painter, sculptor, stage and costume designer, dancer, choreographer, composer, teacher and author, is the creator of a universal complete work of art that focuses on people in space. Oskar Schlemmer is internationally renowned for his painting “Bauhaustreppe” and his dance creations “Das Triadische Ballett” and „Bauhaustänze”

The legal dispute over the estate of Oskar Schlemmer, who died in 1943, lasted more than 20 years. As part of the settlement, the parties have now agreed that granddaughter Janine Schlemmer will leave the community of heirs in exchange for compensation. C. Raman Schlemmer thus becomes the sole legal successor to his grandmother Tut Schlemmer. As a result of the settlement, he was able to save a substantial part of Oskar Schlemmer's artistic oeuvre from being auctioned off, ensure its long-term preservation and make it accessible to the public in future exhibitions. In addition, he will donate a significant cycle of works by his grandfather to the public.

19th Civil Senate of the Higher Regional Court of Stuttgart, chaired by the Vice President of the Higher Regional Court Christoph Haiß

Advisors to C. Raman Schlemmer: Dr. Christoph Philipp (SKW Schwarz), attorney Marita Oertel

Advisor Janine Schlemmer: Hanno Jerling. Prof. Dr. Mark Binz

Berlin, December 23, 2024

SKW Schwarz is further expanding its Real Estate department. On January 1, 2025, Fahri Firat will join the firm's Berlin office as a partner.

Fahri Firat has been admitted to the bar since 2011 and initially worked as legal counsel in a project development company specializing in hotel and commercial real estate. He has worked for Pietschmann Legal since 2014, most recently as managing partner. His main areas of practice include both real estate law and private construction law. He is particularly experienced with project developments, especially in the hotel real estate sector.

“With Fahri Firat, we are gaining a highly experienced and well-connected colleague in the real estate industry who will be an excellent addition to our team, both professionally and personally. We are looking forward to working with him,” says Partner and Head of Real Estate Dr. Klaus Jankowski.

Fahri Firat adds: “I am very much looking forward to being part of SKW Schwarz's real estate practice in the future, which, with its broad expertise in this area and as a genuine full-service law firm, will also be an excellent platform for my clients and me.”

The Real Estate department at SKW Schwarz comprises twelve lawyers at the Berlin, Hamburg, Frankfurt and Munich offices, including six partners.

SKW Schwarz advised the shareholders of PAQATO GmbH on the merger of PAQATO with easybill GmbH, a portfolio company of technology investor LEA Partners.

PAQATO is a leading German provider of after-sales software in e-commerce. Easybill is the market leader for e-invoicing. The merger of the two companies will create a platform for a leading SaaS solution for e-invoicing and after-sales.

Advisor PAQATO GmbH:
SKW Schwarz, Munich: Dr. Stephan Morsch (corporate law/M&A, lead), Alexander Möller (employment law), Dr. Matthias Orthwein (IT), Dr. Angela Poschenrieder (corporate law/M&A); Associates: Henrik Hofmeister (IT), Tamara Ulm (employment law)

After reporting on the AI literacy required under the AI Act in our last KI Flash, we would like to continue to provide you with legal impulses at regular intervals.

Today's topic: AI and (product) liability - entry into force of the new EU Product Liability Directive 

On August 1, 2024, a comprehensive set of regulations for AI came into force with the European AI Act. However, the AI Act does not conclusively regulate all legal issues relating to AI systems. For example, liability for defective AI systems is not explicitly regulated in the AI Act. 

While the planned AI Liability Directive (on which we reported) is still awaited, the new Product Liability Directive (EU) 2024/2853 came into force on December 9, 2024. The directive must now be transposed into national law by the member states within 24 months. It contains new rules on the strict liability of product manufacturers (and possibly also importers, authorized representatives, suppliers and so-called fulfilment service providers). The products covered by the new Product Liability Directive include, in particular, AI systems. 

Background and application of the new Product Liability Directive to AI

According to the German Product Liability Act (“ProdHaftG”) currently in force in Germany, manufacturers of products in Germany are liable, regardless of fault, for injury to life, limb or health of a person and for damage to property that is attributable to a defect in their product. However, the extent to which the ProdHaftG also applies to software products and AI systems, for example, has not yet been conclusively clarified. 

The European legislator is now finally putting an end to this ambiguity with the new Product Liability Directive. According to Art. 4 No. 1 of the Product Liability Directive, a product now also expressly includes software. Recital 13 of the Product Liability Directive specifies the forms in which software is covered and explicitly mentions AI: “e.g. operating systems, firmware, computer programs, applications or AI systems”. This applies regardless of how the software or AI is provided or used - i.e. regardless of whether it is stored on a device, accessed via a cloud or provided through a software-(AI)-as-a-service model.

Providers of AI systems within the meaning of the AI Act are also considered product manufacturers within the meaning of the Product Liability Directive. Deployers of AI systems who significantly redesign an AI system or an AI model of a third party through extensive training (e.g. as part of fine-tuning) can quickly become a product manufacturer. According to Art. 8 para. 2 of the Product Liability Directive, any company that substantially modifies a product outside the manufacturer's control and subsequently makes it available on the market or puts it into service is considered a manufacturer. Recital 14 clarifies that a substantial modification can also occur through the continuous learning of an AI system. A substantial modification can therefore also take place in the course of major updates and upgrades of the AI system. 

However, “naked” information is explicitly not covered. The Product Liability Direction therefore generally does not apply to the content of digital files or the pure source code of software. However, the developer / Provider of an AI model may also fall within the scope of the Product Liability Directive if the model is integrated into a product as a “component”. 

Free and open source software that is provided outside of a business activity is also excluded. However, this threshold could also be quickly exceeded in individual cases, as the Product Liability Directive can also lead to the provision of software “in exchange for data” being classified as a business activity. 

Consequences of applicability

As under current German product liability law, manufacturers are also liable under the new Product Liability Directive for damage to certain legal interests (e.g., life or personal injury) causally caused by defective products.

In principle, the injured party must demonstrate and prove these conditions. However, the Product Liability Directive does provide for a number of lighter burdens of proof for the injured party. Against the backdrop of increasingly complex technologies, including AI, the legislator saw an unequal information gap between the manufacturer and the injured party. The manufacturer should therefore be obliged to disclose evidence, among other things. There is a presumption that a product is defective if it would be excessively difficult for the injured party to prove this due to the technical complexity of the case. This also applies to the causal link between damage and defectiveness. Recital 48 of the Product Liability Directive lists machine learning and the functioning of an AI system as examples of this. 

Product liability generally expires ten years after the (AI) product has been placed on the market or put into service. The period begins newly by applying substantial modifications to the product.  This is particularly important in the case of (further) training of AI.

Conclusion and practical advice

The Product Liability Directive contains the first general provisions for the liability of AI as a software product. However, it will only apply to products that are placed on the market or put into service after December 9, 2026. Existing products are therefore not covered. Product manufacturers are primarily affected. Only in exceptional cases can suppliers also be held liable under the reformed product liability law.

The planned AI Liability Directive will further expand the rules on liability for AI, in particular high-risk AI systems, and extend them to other market participants. 

However, it should not be forgotten that both manufacturers and users of AI are already liable for breaches of contractual obligations in connection with AI under the general rules of German civil law. Manufacturers and dealers who offer AI systems or models on the market are liable to their customers under the law on warranties for defects and must take particular care to ensure that they only contractually promise AI functionalities that the application can actually deliver. The mere user of an AI can also be held liable for breaches of contractual obligations resulting from the use of the AI-generated output in accordance with the general rules of Sections 280 et seq.  and 823 et seq. of the German Civil Code (“BGB”). A blanket exclusion of liability for AI in general terms and conditions is ineffective, although it is often found in practice. 

A recent decision by the Regional Court of Kiel (decision of 29.02.2024 - 6 O 151/23) shows that companies will have to deal more intensively with the possible liability scenarios in connection with the use of AI in the future. The court affirmed the defect-based liability of an information service for the inaccuracy of information generated with the help of AI. These diverse liability scenarios should be carefully analyzed before implementing an AI project in order to ensure compliance with all relevant requirements for the specific product. Please contact us if we can assist you with this.

In 2025, the German-Austrian-Swiss league in the game VALORANT from publisher Riot Games, one of the five largest esports titles in the world, will be completely redesigned. For the first time, Riot Games is entrusting the Tier 2 scene to a conglomerate of a tournament organizer (TakeTV) and four esports organizations (MOUZ, SK Gaming, FOKUS and Eintracht Frankfurt). This applies to both the VALORANT Challenger DACH: Evolution (open to all genders) and to Project Queens (female/diversity league), which will be organized later in 2025.

Due to the fact that – comparable to the outgoing ESL Pro League construct – clubs also act in the role of league partners, the organizers have decided to appoint a four-member Selection Committee that is independent of the clubs to oversee the application process and make the final decision regarding the eight clubs participating in the VALORANT Challenger DACH: Evolution. It is worth noting that the four partner organizations must also take part in this application process and have neither insight into the process nor influence on the decision of the committee.

This committee consists of Dennis Gehlen (CEO of TakeTV), Marvin “headshinsky” Wild (Caster of VALORANT Challenger DACH: Evolution) and Marius Löwe (1st Vice President of the State Esports Federation North-Rhine Westphalia), as well as our expert Dr. Nepomuk Nothelfer.

We warmly congratulate Dr. Nothelfer on his appointment to this responsible position!

December 7, 2024, Hannover

As in previous years, Dreamhack returned to Hannover under the Gamevasion brand. The event at the Hannover Messe, organized by Freaks 4U Gaming GmbH, took place from December 5-8 and featured a variety of great booths and events. One of these events was the GERMAN ESPORTS SUMMIT (GES) of the eSport-Bund Deutschland (ESBD).

One of the speakers at the GES was our expert Dr. Nepomuk Nothelfer, who gave a keynote speech on Saturday, December 7, 2024, on the topic “E-Sport-Definition reloaded - Background and Methodology for the New Federation Definition”Held. The topic resulted from the revision of the current federation definition, which the ESBD had initiated in cooperation with its scientific advisory board, of which Dr. Nothelfer is a member, in recent months. The ESBD general assembly will vote on the proposed definition resulting from this process on December 13, 2024.