However, it soon became obvious that this statement could not be maintained in this form. On the one hand, for instance, the betandwin decision only applied to the „.com“ offers of the Austrian provider of sports bets and not to the sports betting site www.betandwin.de designed for Germany, which, as is well known, is based on a so-called GDR sports betting licence.
The state-owned provider Westlotto as the designated plaintiff among the Deutsche Lotto und Toto-Block (German association of state-run providers) applauded the „consistent continuation of the LG Köln’s legal practice“. However, there is more behind the decision by the 31st chamber for civil law of the LG Köln than just the judgement itself. This decision (which the LG Köln gave as the court of first instance in these proceedings) banned the Austrian provider of gaming and betting, Betandwin International Ltd., from offering and/or marketing games and/or bets via their domain www.betandwin.com in Germany (judgement of 2.2.2006 – ref. 31 O 605/04). However, this elation is premature, as the judgement will not hold water in various respects.
Cologne legal practise in criminal law cases was not considered
Among insiders of the sector, the Regional Court of Cologne is – just like the Regional Court of Hamburg – well known for its negative attitude towards private providers of sports betting and casino games. In so-called warning notice proceedings, where the stateowned providers of lotteries and sweepstakes accuse private providers at regular intervals of violating the Act against Unfair Competition (UWG) through their offers, the stateowned companies as a matter of principle win the cases. This decision-making demeanour has recently led to an embarrassing result which also is alarming as far as validity of the principle of the rule of law is concerned. This is because on the very same day, the 14.7.2005, criminal law judges of the LG Köln (ref. 105 Qs 80/05) came to a different conclusion than the civil law judges of the LG Köln (ref. 81 O 30/05), even though the two decisions were based on comparable facts from the sports betting law point of view. The Criminal Court of Cologne decided that § 284 StGB (German Criminal Code) does not comply with European Law, while the Civil Court of Cologne held that § 284 StGB was applicable and thus adjudged that the activities of the sports betting provider with a European licence represented a violation of fair trade. These contradicting results in spite of similar facts (EU cross-border provision of services from the sector of sports betting) cause even more uncertainty among people seeking legal advice and even more incredibility for the judiciary, noticeable in Germany in this sector for several years already.
Neither the civil courts in Cologne competent for decisions in cases of warning notices, nor those in Hamburg feel prompted to modify their position against the background of the well-known Gambelli decision (ECJ, Judgement of 6th November 2003 – ref. C-101/01), contrary to the practice of several other courts. In spite of this attitude by the Regional Court of Cologne being well known among providers and specialised lawyers, the new betandwin decision still is surprising for three reasons:
Judgement before decision by Constitutional Court
First of all the Regional Court saw no reason to wait for the pending decision of the Federal Constitutional Court (BVerfG) on the subject of sports betting. This is surprising, as the proceedings in this case concern the compatibility of § 284 StGB with the constitution. Furthermore, in the run-up to its decision the BVerfG has also instructed numerous administrative authorities not to execute interdiction orders. Even if the LG Köln’s view in this matter has been known for a long time, it still would have had to wait for the imminent decision by the BVerfG. This is because the decision also has direct influence on the facts in the case in hand, in which the LG held that an illegal operation of gaming and thus a violation of the provisions of the UWG was to be assumed.
Non-consideration of relevant BVerfG jurisdiction and defiance of ECJ guidelines
Another remarkable point is that the LG Köln has not brought the controversial questions from European Law before the ECJ. The first senate of the BVerfG (2nd chamber – ref. 1 BvR 223/05), for instance, regarded the consideration of the Gambelli jurisdiction to be essential for the evaluation of the facts in a similar case and commented as follows in this context: „In view of these remarks by the European Court of Justice, the conformity of the legal situation in Germany with community law could hardly be determined in the main administrative law proceedings without presenting the case to the European Court of Justice. Thus, it cannot be treated as sufficiently secure for the evaluation of the special enforcement interest in the administrative interlocutory proceedings, either.“
In this context, the renowned Professor Dr. Hans-Detlef Horn is even more explicit and comments in one of his numerous specialised essays in the Gewerbearchiv 2005: „As long as no final decision has been given with regard to the illegality of the private offers, marketing of such offers cannot be inhibited using the „detour“ of competition law in order to protect state-run offers.“
Thus, the judgement clearly seems to violate EU Law. In defying EU Law, the LG furthermore disregards clear guidelines set by the BVerfG in this context.
Regional Court forestalls decision by the German Patent and Trademark Office
The judgement by the LG Köln also was surprising with regard to its comments on trademark law. This is because Betandwin was banned from continuing to use the term „supertoto“ and „supertoto XXL“ respectively for the „area of the operation of gaming, in particular of sports bets“. It held that these names were likely to be confused with the registered trademark „TOTO“ of the state-owned plaintiff Westlotto.
In the reasons given for the decision, the court assumes that the term „TOTO“ does not represent a descriptive term, but a purely imaginary word coined by Westlotto. The fact that the term „TOTO“ is quite obviously an abbreviation of the gaming form Totalisor and has for some time no longer been offered exclusively by Westlotto, has apparently not been sufficiently considered by the court. Corresponding cancellation proceedings are already pending with the German Patent and Trademark Office. In spite of having knowledge of these proceedings, the LG did not consider this and has forestalled the decision by the Federal Office.
From our point of view, the Patent and Trademark Office will in all likelihood reach the result that Westlotto is to be denied the protection of trademark law for the trademark TOTO and that the registration is to be cancelled. We come to this conclusion, as the German Federal Court of Justice (BGH) has already decided a practically identical case. The highest German civil court held in its resolution of 19th January 2006 (decision of 19.1.2006, I ZB 11/04) for the case of the trademark „LOTTO“ that this trademark had to be cancelled. According to the BGH‘s view, the Federal Patent Court had, when answering the question whether the generic term „Lotto“ had been transformed into an indication of the operator of the respective game of lottery, justifiably not exclusively taken into account the comprehension of the players of the lottery, but of all consumers to whom the offers of such lottery games are directed. It also had to be considered that the word „Lotto“ is a term which describes the essential characteristics of the goods and services involved. For such product descriptions, a general acceptance in commerce as an indication of origin could only be considered, if a predominant part of the targeted commercial circles saw the term as an indication of the origin of the game from a certain provider and not as an indication of the provided game itself. Even if the consumer associated the term „Lotto“ with the state-run lottery companies, this would still not represent stringent proof of the transition of the meaning of the word from a descriptive statement to an indication of origin.
All in all, the jurisdiction with regard to the Act against Unfair Competition (UWG) is not convincing in many respects and will probably be overruled in one of the higher instances – even if this does not happen before a court of appeal in Cologne. Should the Federal Constitutional Court decide in favour of a partial opening of the German sports betting market in April, this would mean – at last also for the UWG judges in Cologne and Hamburg: Think again!