Spezi is not the same as Spezi
For all non-German readers, we must first explain what Spezi is. Back in the 1950s a popular refreshment in pubs and Biergärten in Germany or rather in Bavaria, was a mix of cola and orange lemonade. One day a brewery from Augsburg “Riegele” came up with the idea to produce a ready mixed version of that drink. Before that, the mixture had to be prepared on spot. Derived from the word “Spezial-Cola-Misch” (special cola mix), Riegele named that drink Spezi and got it trade mark protected. The first wordmark “Spezi” was filed in 1955 in class 32, interestingly only for “beer”. Additional “Spezi” trade marks followed over the years which also covered “non-alcoholic beverages and lemonades”. On a side note, Spezi is also a southern German colloquial term for buddy.
The Spezi vs. Spezi case
On 11 October 2022 the Munich Regional Court issued its decision on a lawsuit filed by the Paulaner brewery from Munich and allowed Paulaner to keep using the brand Spezi for its own version of the cola-mix. Wait what? To comprehend that decision, we must look at the relationship between the breweries Riegele and Paulaner. As said, Riegele invented the Spezi soft drink and registered several trademarks protecting the term Spezi. However, back then Spezi was popular not only in Augsburg but also in Munich and probably all over Bavaria. So Paulaner also introduced a cola-mix drink under the name Spezi. To avoid a lengthy and costly court proceeding, Riegele and Paulaner concluded an agreement in 1974 which gave Paulaner the right to produce and distribute a cola-mix drink under the name Spezi. Paulaner paid Riegele an one-off payment in the amount of DM 10.000 for this right. And this is where subject dispute started.
As you may know, Paulaner is today a huge beverage producer that apparently produces up to one million hectolitres Spezi a year (that is one hundred million litres of Spezi or two hundred half a litre Spezi bottles). It seems understandable that Riegele no longer considered the agreement concluded at the time to be suitable for today’s circumstances. Therefore, Riegele terminated the agreement, which in their view was a licence agreement, with the aim to conclude a new agreement with updated terms. Riegele requested an annual licence fee of around 4.5 to 5 million Euros, which shows how significant the difference may be between the amount agreed at the time and the sum calculated according to today’s circumstances.
Licence Agreement vs. Coexistence and Delimitation Agreement
However, the court ruled that a deal is a deal and upheld Paulaner’s claim that Riegele could not terminate the agreement. The court assessed that the agreement did not constitute a licence agreement but rather a coexistence and delimitation agreement, which could not be terminated without cause. The court pointed out that Paulaner has not given any cause for termination of the agreement and that the unexpected and extraordinary success of Paulaner’s Spezi is no legal reason for termination either. Therefore, Paulaner is allowed to continue to manufacture and distribute its cola-mix under the name Spezi. The decision is not yet final and Riegele can file an appeal.
What to take away from this case
This case shows impressively that one cannot be attentive enough when concluding contracts for the protection of intellectual property rights. Careful consideration must be given to whether to establish a cooperation with another party, whether to conclude a coexistence and delimitation agreement or if it is better to just grant a licence.
One should also think about how the respective markets could develop in the long term and whether the planned form of contract covers all eventualities. Sufficient termination options should not be forgotten.